E-commerce offers brands an opportunity to bolster consumer loyalty online during the current global health crisis
As consumers around the world navigate life while social distancing, e-commerce is becoming the new normal for many shoppers.
In January, Statista published key figures on retail e-commerce sales in the United States, projecting that online retail sales of physical goods will reach close to US$600 billion in 2024 from US$365.2 billion in 2019.
In Canada, revenue from online sales will climb from US$25.4 billion to US$33.3 billion. At this time, it is difficult to know for certain the full impact COVID-19 and related safety measures will have on consumer behavior.
When Canadian Packaging initiated this Q&A with Brian Techter, director of packaging design and engineering at integrated communication services group R.R. Donnelley (RRD) in Chicago, coronavirus was not yet a global pandemic.
However, in the spirit of seeing the forest through the trees—and providing readers with the insight necessary to help their companies endure, Techter sheds some light on ways that brands can secure and retain consumer loyalty when the only points of engagement available are some screen time and packaging.
What are some of the biggest e-commerce trends we can expect to see through the remainder of 2020?
Subscription services continue to be extremely popular. Whether it’s personal care brands such as Dollar Shave Club and Harry’s Razors, pet product supplier Chewy, or meal delivery kits such as Blue Apron, this category continues to grow.
The subscription service model is not only a convenient way for consumers to try new products and refill necessities, it also enables brands to leverage subscribers’ digital activity to inform the contents. For example, some brands enable subscribers to select the type of products they’d like to receive while others may take hints from customer product views online.
And of course, internet searches are also a key indicator for product interest. However, the ‘gift box’ presentation doesn’t have to be limited to just subscription services. Companies can offer products in well-appointed brand experience kits to reward loyal customers or offer a premium unboxing experience.
Product customization and personalization also represent a significant trend. By offering these services, brands can better understand consumer preferences. Customization and personalization also provide a special and unique experience for the customer.
In one example, Oreo’s ‘design your own package promotion’ allowed consumers to add their personal touches to a package of cookies. Activities that allow shoppers to exercise a little creativity and make a product theirs go a long way to strengthen the connection between individuals and a brand.
What has been the biggest impact of this trend on product packaging?
The one really big trend that stands to accelerate is the development of specific e-commerce packaging SKUs (stock-keeping units).
We’re all accustomed to seeing the Amazon box on our doorstep. However, we’re increasingly seeing packaging that is better designed for shipping. Less and less, we receive a brown corrugated Amazon box, inside of which is a smaller box, maybe some dunnage or airbags, and finally, the primary package containing your product.
Increasingly, brands are rightsizing, redesigning and reinforcing packaging to minimize space and material while resisting damage from other, heavier items. This approach enables packaging and supply chain professionals to greatly reduce waste—and subsequently costs— while addressing consumer concerns about the environmental impact of so much packaging material winding up in a landfill.
We also continue to see Ships In Own Container (SIOC) packaging. Since Amazon put into place initiatives to minimize handling at its distribution centers, more brands have adopted this shipping container style package, which also reduces shipping costs.
It feels like everyone nowadays is more conscientious about sustainability. How can brands better respond to consumer concerns about the environment and the impact of discarded packaging?
Specifying the right package design for the application can go a long way in saving material. RRD enables brands to manage two types of SKUs. As more brands adopt an omnichannel business model, the immediate tendency can be to just ship the packaging designed for shelf allocation at a brick-and-mortar retailer.
However, that sizing, design and even material gauge may not work for e-commerce. This approach can lead to greater waste, and hence unnecessary costs. However, managing both a traditional retail and e-commerce SKU offers the best of both worlds. Other brands may opt for “omnichannel” packaging that strikes the perfect marriage of attributes to perform in traditional retail spaces as well as along the e-commerce supply chain. It is a balance of the additional complexity of multiple packaging SKUs versus cost and performance, and in this example cost and performance trump the additional complexity.
On the material front, we are also seeing brands opt out of some petrol-based substrates like foams. Some companies adopt plant plastics, and among fragile products molded pulp is a growing alternative. Importantly, any sustainable alternative must adequately protect the product. There is nothing more wasteful than eco-friendly packaging that underperforms, arrives damaged, disappoints the consumer, gets thrown away or, even worse, is shipped back to the brand and then thrown away. That’s why brands should work with suppliers they can trust to provide guidance on design and material specification.
Why should businesses go digital and how can brands really benefit from digitized engagement?
Eventually, the world will have an answer to COVID-19 and we’ll see life return to “normal.” I’m sure when that day comes, people will be eager to get out of their homes and back, safely, into stores.
However, many communities in the U.S. and Canada are still adhering to stay-at-home orders. Others may be required to follow social distancing restrictions, and some may just be exercising a lot of caution when out and about. The virus will likely have reverberations for years to come. For the foreseeable future, however, it’s fueling more e-commerce activity. Companies that can manufacture at this time must make the most of the e-tail channels available to them.
The good news is that e-commerce provides excellent opportunities for personalization, customization, and customer engagement, so consumers can better know the Bian Techter, brands they love and brands can better serve consumers.