E-commerce - a new era for packaging

It has been exactly two years since VPK and the other members of the Alliance were FFP certified. A lot has changed in that time. More than a year on from the start of the pandemic, there has been a seismic shift in e-commerce packaging that no-one could have predicted. Here, we will look at the key trends and impacts that were released at the last E-pack Europe event.

E-commerce business – adding complexity in the customer journey

Before addressing the current situation, it is important to look at the background and evolution of e-commerce business and examine the key features. Digitisation has led to more complexity during the customer journey, multiplying potential touchpoints and creating a new distribution channel – e-commerce.

The Internet has changed how we decide what to buy. In a physical shop, we are more governed by impulse and visual stimulation. Online, there are more variables, and research plays a much bigger role in purchase decisions. Google coined the term Zero Moment of Truth, or ZMOT, to describe the part of the buying process when the consumer researches a product prior to purchase. After that, there are multiple further “moments of truth” that move a consumer closer to buying.

In this journey, e-commerce packaging plays a substantial role, since it is replacing the First Moment of Truth where a consumer sees a product for the first time. As such, it becomes one of the key brand assets, and box design is one of the success factors that we will explore later in this piece.

E-commerce packaging – the challenges in supply and value chains

Every manufactured product can travel across many paths. The challenge is to understand and tackle where the value is.

ecommerce_manufactured product value chain

The way a product is transported is very different for online channels than for standard ‘bricks & mortar’ distribution channels. For e-commerce purchases, each parcel can be handled up to 20 times more often! This means box design for e-commerce packaging solutions is considerably more complicated than the traditional retail model:

E-commerce business – the pandemic and the forecast of the “next normal”

At the E-pack Europe event in December, Google’s Miguel M. Avalos (Head of Commerce Product Marketing & Digital Acceleration Program), discussed some of the major search trends of the last year:

e-commerce vs. physical - huge acceleration of ecommerce but we can expect a move back to "brick & mortar” retail as the effects of the pandemic recede
brand vs. marketplace - increase in owned ecommerce to allow better brand experience
curation vs. endless aisle - ‘endless aisle’ refers to the concept of enabling customers in the stores to virtually browse or order a wide range of products that are either out of stock or not sold in-store and have them shipped to the store or their home. During the pandemic, curation increased which allowed niche offering more than mass-offers
privacy vs. personalisation – while personalisation was a key trend and brought value to the customer, it has shifted to more “local” search in order to support business continuity close to people’s location

Nowadays, we can raise the following question: will this unprecedented growth in e-commerce sectors continue beyond the pandemic? Predictions of what the “next normal” will look like show some megatrends for the future. These will have to be integrated into the next e-commerce packaging and box design initiatives.

E-commerce business – main stakeholder profiles and expectations

At the E-pack Europe event, moderator Jim Chrzan (VP Content and Brand Strategy at PMMI Media Group) made some interesting observations in his opening remarks:

75% of brand manufacturers are making changes to the secondary packaging
40% of brand manufacturers are considering changes to the primary pack

We also need to consider that the term ‘e-commerce packaging’ has different meaning for the three profiles in the value chain:

E-consumer

Focus on unboxing and Ultimate Moment Of Truth as “wow” effect
Rethink secondary packaging as primary packaging

E-retailer/Logistician

Increase fulfilment efficiency
Reduce incidence of shipment damage
Minimise waste

Brand owner

Meet e-consumer and e-retailer requirements
Include smart packaging solutions
Increase omnichannel solutions

The trigger is to align interest on primary, secondary, and tertiary packaging so that brands are not affected and customers are not disappointed.

As well as the logistics functionalities (containing, preserving and protecting) and information vehicle (branding, usage and promotion), box design should integrate new “must-have” attributes:

Sustainability first

All around Europe, studies are aligned. As an example, a recent French study revealed:

98% of the population wants e-commerce packaging that will protect the product(s) from any damage
92% is concerned that the right volume of packaging should be used to reduce waste
89% demand recyclable packaging – knowing that mono-material box designs help to increase the recycle rate
85% wish to have reusable packaging options

These figures can be extrapolated to any European country.

Design for e-commerce business

The success factors for a smooth, homogenous and omnichannel experience have to be identified and implemented according to the needs of all the various stakeholders. There are many factors to consider when it comes to ecommerce packaging. Optimising packaging design for brand owners, e-retailers and end consumers is now more important than ever. They can be sum-up in 6 criteria:

Protection and security of your product(s): E-commerce packaging has to be fit to size, securely closed and tested with dedicated methods. It will prevent damage and also thefts thanks to temper evidence.
Easiness to erect and fill: To optimise efficiency and speed at the e-retailers
Reclosing and reducing the environmental impact: box design should include “easy to return” features that allow reuse of the box – therefore enhancing its life cycle
Optimisation: The entire e-commerce supply chain should be rethought and optimised to minimise void shipment – it is about moving from a palletisation logic to a “parcel” logic
Ship-ready branded opportunity: Omnichannel options help merging primary and secondary ecommerce packaging, allowing brands to have a new territory to express their assets
Increasing and facilitating the unboxing experience: For brand owners and brands born on the Internet - so called Digital Native Vertical Brands (DNVB) - the differentiating criteria will be in a box design with a great consumer experience

Even though most of these elements are not new, tomorrow’s e-commerce packaging winners will be the ones that have identified these opportunities, with the upcoming increase of track and trace / smart e-commerce solutions. The success factors will be in working with a holistic approach to meet the demands of each stakeholder.

Interested in more information?

Contact us with any questions. We are happy to work with you, listen to you and present our extensive range of e-commerce packaging solutions. See you soon?

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