Online retail - a new era for packaging
It has been exactly two years since Allianz Blue Box Partners and its members were FFP certified. A lot has changed since then. More than a year into the pandemic, the world of mail order packaging has seen major changes that no one could have foreseen. Below, we look at the key trends and implications presented at the latest E-pack Europe event.
Online retail - the customer journey is becoming more complex
Before we take a look at the current situation, it is important to consider the background and developments in online retail and the most important trends. Digitalisation has led to more complexity in the customer journey, multiplied potential touchpoints and created a new sales channel - e-commerce1.
1 Source: Packaging Engineer - FMCG
Multi-channel shopping
The internet has changed the way we make decisions and what we buy. In bricks-and-mortar stores, we are guided more by impulses and visual stimuli. Online, on the other hand, there are more variables and research and comparisons play a far greater role in the purchasing decision. Google coined the term Zero Moment of Truth, or ZMOT for short, to describe the part of purchasing behaviour in which the consumer first researches before actually making a purchase. This is followed by further "moments of truth" that influence the purchase decision:
The exemplary online user journey
The shipping packaging plays a key role in this customer journey as it replaces the first moment of truth, i.e. the moment when a customer sees the product in real life for the first time. It therefore also becomes a brand asset and the packaging design is one of the success factors that will be analysed in more detail later on.
Shipping packaging - the challenges in supply and value chains
Every manufactured product can reach the customer via many different routes. The challenge lies in recognising what the value chain actually looks like and dealing with it correctly. The way in which a product is transported is very different in online channels than in traditional bricks-and-mortar retail as a sales channel. With online purchases, parcels can be handled up to twenty times more frequently. This means that the packaging design for mail order packaging is far more complicated than that of the traditional retail model.
Online retail - the pandemic and the forecast for the "new normality"
On 21 January 2021, at the CES (Consumer Electronic Show), which was held completely digitally, a study was presented that showed that COVID-19 caused online trade to grow as much in just eight weeks as it normally does in ten years. The global market for shipping packaging is currently estimated to be worth around $43.1 billion. With a forecast annual growth rate of 12%, this figure could reach $75.1 billion by 2025 (source: Smithers Pira).
The changes in consumer behaviour due to COVID-19 have had a significant impact on all CPG segments / consumer goods segments.
At E-Pack Europe in December, Google's Head of Commerce Product Marketing & Digital Acceleration Programme, Miguel M. Alavos, presented some of the most important search trends from the past year:
Enormous acceleration of e-commerce, although a return to traditional, brick-and-mortar retail is expected as soon as the effects of the pandemic subside.
Increase in own online shops to provide customers with a better brand experience.
The "Endless Aisle" concept allows retail customers to browse or order a whole range of products online that are either out of stock, sold out or not sold in-store, and have them delivered either to the shop or directly to their home. During the pandemic, curation in the form of targeted searches has increased, putting more focus on niche offerings as opposed to mass offerings.
While personalisation was an important trend and brought great added value to the end customer, search behaviour shifted primarily to local searches in order to provide greater support for businesses in the buyer's immediate vicinity.
Online retail - key stakeholder profiles and expectations
At E-Pack Europe, moderator Jim Chrzan (VP Content and Brand Strategy at PMMI Media Group) made some interesting observations in his opening speech:
- 75% of brand manufacturers are making changes to their secondary packaging
- 40% of brand manufacturers are considering changes to their primary packaging
It is also important to note that the term shipment packaging has different meanings for the three profiles in the value chain:
Focus on the unboxing experience and the "ultimate moment of truth" as a wow effect
New view of secondary packaging as primary packaging
Increase efficiency in fulfilment
Minimise transport damage
Reduce waste
Fulfilling the expectations of e-customers and e-retailers
Incorporate intelligent packaging solutions
Expand omni-channel solutions
One of the success factors is to harmonise primary, secondary and tertiary packaging so that the customer is not disappointed and there are no negative effects on the brand.
In addition to the logistical functionalities (safe transport and protection of the product) and the function as an information carrier (branding, advertising, product information), the packaging design must take new "must-have" attributes into account:
Sustainability first
Studies throughout Europe have come to the same conclusion, for example a study from France shows the following:
Designs for online retail
Shipping packaging must fit perfectly, be securely sealed and have been checked using special methods and tests. The packaging prevents damage and theft, for example through special security seals that make unauthorised access visible.
To optimise efficiency and speed at e-retailers.
Packaging designs should have functionalities that enable the shipping packaging to be reused - and thus extend its life cycle.
The entire supply chain in online retail should be rethought and optimised to avoid unnecessary journeys and / or incorrect shipments. The aim is to move away from "palletisation logic/logistics" towards "parcel logic".
New omni-channel options help to connect primary and secondary shipping packaging, offering brands new ways to communicate their branding and marketing messages.
For brand owners and brands that have emerged with the internet boom, so-called Digital Native Vertical Brands (DNVB), the competitive advantage lies in a packaging design that provides a great customer experience.
Even if many of these points are not new, the winners in the shipping packaging market will be those who have recognised these opportunities. Especially in view of the imminent increase in smart track and trace solutions in online retail, these are becoming increasingly important.
These success factors lie in a holistic approach that fulfils the requirements and wishes of all stakeholders.
E-Commerce
Our shipping packaging for e-commerce is designed to ship your products safely and efficiently and to create an unforgettable unpacking experience for your customers.
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