By Becky Donner
SVP, Marketing, Design and Engineering, TricorBraun
You have an ecommerce packaging strategy, of course. Yes?
No? You’re not alone.
With online sales of consumer packaged goods (CPG) growing at a rate of more than 50% year over year1, an ecommerce packaging strategy is a necessity. Yet, while we know CPG brand teams have thoroughly explored the shift from brick-and-mortar to ecommerce, most brands tell us they are repurposing packaging from the shelf to ecommerce channels with little change.
This is a risky move.
Possible threats to brand engagement, an increased number of supply chain touch points and the potential for shipping damaged or leaking product can results in a negative consumer experience. A frustrating or annoying experience and the consumer may not give your company a second chance.
Packaging for ecommerce is more than protecting and preserving the product. It starts with a deeper understanding of the consumer lifestyle trends and behaviors and retail shifts that influence and impact the consumer experience – an understanding that will provide the insight needed to propel growth for your brand and products.
In this paper, we’ll examine several trends that will have an influence on your ecommerce packaging strategy. With decades of packaging design experience, we know there’s an important connection between packaging design and functionality and the consumer’s evolving lifestyle and needs. We make it a priority to understand consumer behavior and preferences and industry shifts influencing consumer behavior so that your packaging not only connects with consumers but also outperforms their expectations. A positive consumer experience will lead to repeat purchases and ultimately, brand loyalty.
“We’re not thinking about how packaging design needs to evolve. We’re trying to catch up, we felt like we were so behind.”
- Packaging and Brand Manager, Grocery Store Chain
1. We live in an omnichannel world with micro-moments transforming the way we shop.
For the consumer, the distinction between brick and mortar retail and ecommerce is increasingly blurred. Shoppers are not always taking a direct path to purchase. A coupon might send the shopper to the store or website, while a visit to the store might invoke a price check online and a web banner ad might inspire a shopper to go to the store for a high touch experience.
Meanwhile, with micro-moments (turning to a device to act on something) impacting the way consumers shop, smartphones are increasingly important to consumers’ shopping journeys. According to a Harvard Business Review Analytic Services Report on micro-moments and the shopper journey, “what starts as a micro-moment often leads to engagement and even consummation with other channels; comScore’s Local Search Study, for example, found the majority of purchases following a mobile search happened not online, but in a physical store (73%) or on the phone (16%).”
In this blurred retail world, retailers and brand owners have an opportunity to make the consumer’s purchasing and repurchasing experience as seamless, convenient and easy as possible. But remember that blurred and changing channels impacts packaging, and if the packaging fails, that affects the consumer’s positive seamless shopping experience and puts brands at risk.
2. We lead nomadic lives.
With consumers traveling more, online retailers and brands are responding to their needs by offering beauty products that meet airport security requirements and offer dispensing ease for on-the-go application.
For example, Glossier products ship in its popular pink pouches, but the pouch is also sold separately. Glossier fans use the pouch as an easy way to keep things organized and a good way to transport liquids in carry-on luggage. Tide’s three-pack of liquid detergent is a convenient option for traveling consumers, allowing them to wash clothing while staying at a hotel or somewhere without access to laundry machines.
In addition to their desire for on-the-go packaging, many consumers prefer to try before they buy. Amazon’s new Prime Samples program, where Prime members can purchase various CPG products in trial size, allows consumers to test the product before committing to the cost of a full-size purchase. For each sample consumers buy (prices ranging from $2 to $4), they receive a credit equal to the price of the sample, which can be used toward a future purchase of select products from the category sampled.
When developing an ecommerce packaging plan, CPG companies might consider a proprietary packaging system that optimizes the space of an airport security-approved, quart-sized plastic bag and other opportunities for trial and travel-size packaging.
“We have tried putting existing products and just put them on eComm, but have run into issues...Wipes leaking...One specific cap developed damage in one-off [single-parcel] shipping, breaking of trigger heads...”
- Packaging and Product Development Scientist, Household Products
3. Consumers are increasingly turning to subscription services for their CPG purchases.
A Hitwise analysis shows that subscription commerce has grown exponentially in recent years – over 3,000%! Retailers like Target (subscription service for everyday essentials) and Amazon (Subscribe & Save) are offering subscription services based on reduced prices and convenience.
Millennials think of the products they use as extensions of their values. They want to know the beliefs and principles of the places they shop. Several online subscription services are offering strong points of view combined with convenience, giving them license to upcharge. According to Nielsen, 66% of shoppers are willing to pay more if the company is dedicated to social or environmental change. For example, The Honest Company’s non-toxic approach to products combined with Honest “bundles” offer convenience for consumers willing to pay a markup for products that give them peace of mind.
4. With smart home assistants, the future of retail has arrived.
From Amazon Echo to Google Home and Apple’s upcoming HomePod, sales of smart speakers and digital home assistants have exploded. Forrester Research forecasts that smart home devices in the U.S. will reach 244 million in 2022, up from 24 million in 2016.
These connected home devices have made digital shopping easier and day-by-day, they are more integrated in consumers’ everyday lives. According to Walker Sands Future of Retail Study 2017, one in five consumers have made a voice purchase through Amazon Echo or another digital home assistant, and another third plan to do so in the next year.
How these devices shift the way consumers interact with brands will be exciting to watch. As Dunhumby Ventures suggests in VentureBeat, “at what point does ‘Siri, tell me the weather’ or ‘Alexa, play music’ become...‘What aisle can I find the peanut butter on?’ or ‘Does this shirt come in small’?”
As more consumers accept purchasing integration via smart home assistants as the norm, there will be tremendous opportunities for brands to personalize consumers’ experiences and with it, more complex supply chain challenges.
Additionally, retailers and brand owners have another opportunity to make the consumer’s purchasing and repurchasing experience (think Amazon Dash buttons which serve as shortcuts for Amazon Prime members to reorder their favorite products) as seamless, convenient and easy as possible.
5. Consumers’ desire for availability and speed pave the way for self-service innovations.
Consumers show a desire for constant availability and speed of service, leading to innovative developments in kiosks and vending machines. According to Kiosk Marketplace, a variety of creative brands have entered the vending machine market, selling products such as freshly-baked cupcakes, gourmet coffee, organic food, burritos and freshly-squeezed juice. Retail Systems Research expects the trend of innovative vending to continue to grow, and cites the success of Best Buy kiosks in airports as permission from consumers to sell more expensive products via self-service.
As brands feel pressure to deliver fast, easy, personalized and intuitive self-service, it’s important to consider how the packaging will be received through new channels.
6. Unboxing: Product delivery turned social occasion.
As consumers continue to shop online, their standards have been elevated. Consumers expect retailers of all types to be delivering the same level of service that a major e-retailer would deliver. You are no longer competing with the best experience in your retail categories, you are competing with the best experience a consumer has ever had. Brands need to stand out by providing an experience that extends beyond the actual product.
When it comes to packaging for online shopping (in particular subscriptions), an enjoyable unboxing experience—where consumers experience receiving, opening, and engaging with primary and secondary packaging—can help drive consumer engagement, which ultimately drives brand loyalty. Apple was at the forefront of the delightful, memorable unboxing experience (search “Apple unboxing” online and you’ll see what we mean) and other brands, including CPG companies, are working to duplicate the unboxing magic that has been achieved in other categories.
Retailers who demonstrate that care and thought has been considered (versus the easiest and cheapest packaging solution), guide consumers through the unboxing process with structured boxes, acknowledge appreciation for customers, add samples or offers enjoy positive customer feedback. Dollar Shave Club, Birchbox and Thrive Market are a few of the retailers who use eye-catching packaging to evoke these surprise and delight moments.
“We’ve talked about it, but never taken steps to specifically design a package to perform online.”
- Director of Design and Packaging, Pet Food Retailer
7. Consumers search for peace.
In self-care, some online brands are appealing to a consumer desire for peace. In this case, peace is about giving consumers fewer but better choices, creating a safe environment for decision making without complicated guesswork.
For example, Oh Skin, a pared down, unisex cosmetics and hair care brand, takes a no-nonsense approach to packaging design. Amber bottles, black and white labels and a sleek, modern sans serif font make choosing the right project simple – and peaceful.
Using color, form factor, or texture, consider how primary packaging may help bring calm and ease to consumer decision-making – often through an abundance of options and choices.
Brand owners developing their ecommerce packaging strategy should consider developing primary packaging that can be repurposed as a measurable dispenser or daily reminder to encourage product compliance (and avoid a stressful pantry overload).
8. Made for me.
Companies offer quizzes and personalization options to meet consumers’ desires for products that meet their individual needs and requirements. High levels of customization offer the added benefits of creating a sense of intimacy with the brand.
For example, the OREO colorfilled experience offers fans the opportunity to customize their OREO packaging. Users choose a design, which they color in. Function of Beauty, offers personalized hair care based customers hair type, goals and preferences. Customers take a quiz to determine their hair care formula from 12 billion combinations. The result is “made for you” with the customer’s name on the bottle. Or Care/of, which allows consumers to customize vitamin packs that provide a blend of vitamins based on the consumer’s lifestyle and goals in a personalized, monthly “made for you” pack.
Consider developing post-production capabilities that allow retailers to add simple personalization to primary packaging, such as adding a name or changing the bottle color.
9. Concept stores elevate the retail experience.
As Pamela Danziger offers in her December 2017 Forbes article, in the new experience economy, retailers are moving from a product-centric to a consumer-centric retail model through storytelling. Consumers look to engage in shopping experiences of discovery and delight.
Timberland’s TreeLab store is made over every six to eight weeks to tell a new story with a curated selection of Timberland products as elements in the story. The 2,000 square foot STORY Store in New York City describes itself as a “retail concept that takes the point of view of a magazine, changes like a gallery and sells things like a store.” Every four-to-eight weeks, STORY reinvents itself — from the design to the merchandise — with the goal of bringing to light a new theme, trend or issue.
Or consider the store that comes to you. Wheelys Moby Mart, under testing in Shanghai, is a solar-powered, drone-equipped, mobile and autonomous supermarket that you order up via your app 24/7.
10. Packaging with visual appeal is valuable.
The visual appeal of packaging pays off. In a Shorr Packaging survey, half (51%) of respondents said specially printed or customized packaging made them feel like the product inside was more valuable. Thirty-two percent said there was “no difference” and less than one-quarter (18%) said “no.” High-end shoppers were more likely to respond affirmatively; 61% said special packaging made them feel like the product inside was more valuable.
With ecommerce, visual engagement occurs in a different manner. Unlike conventional retail, where consumers hold a product as part of the purchase decision process, online consumers first experience a physical product and its packaging after it arrives in their homes. The product must meet the expectation of the consumer, and the brand connection through visual representation takes place in a different manner than if the consumer picked up the product off the shelf. When delivered, the product must meet the consumer’s expectation – the expectation they formed from viewing the product online, perhaps in an online photo or video story.
Visual packaging trends support this role. With Minimalism, primary packaging is more about reaffirming how it fits into consumers’ homes. With an always-on, urban lifestyle, people are feeling an increasing need to “cut through the noise” and minimal packaging (You & Oil, Hello Toothpaste and Luxury Skin Cells are good examples of this approach) is a direct response to this need. Another visual trend, Inspired by Nature, offers the aesthetic of the natural world (consider Tåpped Birchwater) and serves as a contrast to the crowded aisles of the supermarket, working to pull the consumer to another place.
“There has been 90% similarity in packaging online versus offline. But now there’s enough volume [of eComm consumers/sales] to invest in different packaging. The pendulum will swing.”
- Director of Packaging Development for Household Products
In-store packaging strategies can’t simply be replicated for ecommerce; they need to be reviewed and reexamined. A well-developed ecommerce packaging plan starts with an understanding of consumer behaviors and trends. The holy grail of an ecommerce solution is found in achieving the benefit of product protection, visual appeal and optimization for pack out and shipping efficiency.
At TricorBraun, we can help you get there. We know how to navigate the intricacies and challenges associated with ecommerce packaging and can guide you through the myriad of options and solutions at each stage of your packaging development journey. We can optimize your packaging, accelerate your readiness and increase your opportunities through ecommerce growth and brand loyalty. We develop meaningful packaging solutions that deliver the desired consumer experience.
11010Data, Online CPG Industry Report, 2016