Box clever

30 July 2019



Global ecommerce growth is predicted to keep going year on year, and the evolution of the industry has huge potential for the packaging industry, with brands, manufacturers and designers all presented with incredible opportunities... as long as it is done right. Emma-Jane Batey reports.


While people may bemoan the death of the High Street, retail is not dead. Consumers are buying as much as ever before, but they are doing it online. So rather than see this as a troubled time for retail brands and their packaging partners, it is actually a gloriously colourful time – literally. By engaging consumers right from the first moment they interact with a product online, their expectations can be managed, and even exceeded, with packaging playing an integral role.

Plenty of ecommerce providers don't have any kind of real life retail presence anymore and, with the right branding and digital tools, this works in their favour. Consumers buy into the experience of aligning themselves with a particular ecommerce provider and, especially if they use their app, will quickly be loyal.

For online-only personalised cards and gifts company Funky Pigeon, its focus since it started in 2009 has been to 'make every occasion more personal', which seems to be at the heart of successful ecommerce across industry sectors.

Sophie Millard, Funky Pigeon's PR & social media executive, tells Packaging Today, “Our range of distinctive personalised cards and gifts has grown quickly, along with our loyal client base. Choosing the correct packaging is a crucial part of our process when introducing new lines. As many of our products are fragile and personalised for the customer, it is essential that they arrive in the best possible condition.”

Buying into the brand

There are clearly three key areas of ecommerce where packaging has a part to play – the instant online appeal, the product protection in transit and the consumers' impression when they receive the product.

“Sustainability also plays a huge role; we are now changing a lot of our product packaging to be made of 75% recycled material, to be fully recyclable after use, and to be made from a single print process,” Millard continues. “It all needs to represent the distinctly quirky aspect of our brand, but security is also key, so the packaging is designed for the product to fit as safely as possible.”

Naked Wines is an online-only wine retailer that has also captured the spirit of the ecommerce trend through clever branding and a well-curated offer. Launched in 2008 as a direct-to-consumer business and now part of the UK's largest specialist wine retailer Majestic Wine, Naked Wines was perfectly positioned to grow with the ecommerce trend. Hailed as an innovative disruptor in the wine sector, its subscriber model has focused on allowing customers to 'get better wine for their money'.

Both Funky Pigeon and Naked Wines offer products from the incredibly fast-growing flat wine bottle brand Garcon Wines. Ideally suited to the ecommerce trend, the 100% post-consumer rPET bottles conform to traditional wine bottle shapes but are 40% spatially smaller and 87% lighter than round glass bottles of the same volume. Before Garcon Wines, wine was not a practical 'through the letterbox' gift or purchase, so while buying wine online has been steadily growing, this innovation has opened up incredible opportunities.

Naked Wines COO Eamon FitzGerald says, “We are excited to partner with Garcon Wines. With Garcon's letterbox-friendly bottles, we can now offer our customers a new way to send gifts and introduce their friends to Naked with a bottle direct to their doormat.”

The charismatic CEO and co-founder of Garcon Wines Santiago Navarro tells Packaging Today, “As the UK's most successful wine club in the last decade, and with this success having been fueled by business model innovation, Naked Wines makes for the ideal partner with whom to further grow the adoption of our innovative wine bottles in the UK by introducing their delicious wines in our bottles to wine drinkers who do not yet buy from them.

“We believe this is the next step up from the immensely successful voucher campaigns they have run to date. We will also help to grow the gifting side of their business through a seamless, quality offering.  Furthermore, we feel that our eco wine bottles will make for a perfect fit with the caring, sustainability values of Naked Wines' Angel community.”

Opportunity to be authentic

For fresh-thinking brands that are doing it all themselves, the ecommerce appeal of packaging offers an excellent way to create an army of ambassadors that buy into the products, simply because they want to. After all, isn't the most powerful recommendation unprompted? For inspiring skincare brand Rock Rose, the packaging manages to represent the brand spirit – and that of its uniquely cool founders – while being the ideal counterpoint to its efficacy.

With highly unusual, masculine/feminine packaging, Rock Rose utilises bespoke matt black glass bottles with gloss gold branding, echoing the fabulous rockabilly style of the women behind the brand.  

“Our packaging is an integral part of the brand,” says Rock Rose co-founder Raquel Le Bron. “We feel we have created an exceptional product and we wanted the packaging to reflect its quality. The glass jars are weighted and feel luxurious to the touch, our logo and text are screen printed gold ink on a matt black background that will not lose its lustre or flake.

“As the brand developed we all realised the bold lines and impactful fonts of Art Deco were a perfect fit for us; we all love Art Deco. We just knew we wanted to create a range that would be different from the usual natural packaging and would appeal to both men and women.”

The ecommerce aspect of the Rock Rose experience compounds its unusual appeal, with online customers being treated to extras including a little black velvet pouch and a handwritten note.

“We knew we wanted to use recycled and environmentally-friendly packaging while keeping that 'unusual luxury' element,” Le Bron adds. “The black velvet pouch actually allows us to limit excessive packaging as well as promoting personalisation, which sits well with our approach.”

Global print and packaging partner Flint Group is active in supporting its customers in utilising the ecommerce trend. Driven by a group-wide desire to 'make our products and services better, faster and easier to use', its  Flint Group Flexographic division provides digital flexographic printing plates that have gained fans worldwide thanks to its appreciation of the added value role of packaging for ecommerce customers.

“Specifically for the ecommerce sector, we provide digital flexographic printing plates, which enables brand owners and printers to design transport packaging that matches their brand equity,” explains Friedrich von Rechteren, global commercial VP at Flint Group. “We see opportunities specifically in the ecommerce sphere for companies to distinguish themselves from other ecommerce stores; our nyloflex FTC Digital for example allows high-quality prints on low-quality liners. For brand owners, compelling designs on low-cost liners with excellent print quality is a great advantage. Our nyloflex FTC Digital is proven to dramatically reduce fluting effects, even when printing on low-cost liners.”

Von Rechteren explains how Flint appreciates its role in ensuring that 'customers are not experiencing a negative brand association when their purchases are delivered' by discussing the whole of the ecommerce value chain.

“As a leading flexographic plate provider, we are one part of a larger chain, with our products playing an important role in the whole chain,” he says. “Through print trials in collaboration with cliche makers and printers, we highlight what kind of print results can be achieved when a printer uses Flint Group flexographic plates, which can then be communicated to brand owners.”   

 Aligning ambassadors                                                                                                                                                                                                                             

The 'whole of the ecommerce chain' is a rich place for understanding the complementary roles of the players within it. For multinational brand design agency Stormbrands, understanding how to 'delight' customers is at the heart of excellent ecommerce. Stormbrands managing director Jonny Westcar explains how this goes beyond the all-important look and feel of the packaging and the product, and into the territory of data.

“In my opinion, a lot of the ecommerce trend is about data, not just the product; it is about understanding customer preferences, delighting them and then sharing the experience,” he says. “The data this generates is critical to future marketing efficiency and effectiveness, plus any direct-to-consumer model is built on a lifetime customer value, and the ability for that consumer to advocate and/or social sell the brand. Part of this is the physical product, of course; some companies get it right and some don't.”

By engaging with consumers and potential consumers right from the very first moment they find your product online, not only are you creating a valuable opportunity to exceed their expectations; you're also creating an army of ambassadors that will promote your product in a far more authentic way than any paid method ever could.

BOXOUT

 Ecommerce growth

The nature of ecommerce packaging favours the use of corrugated board as a major medium and it is now estimated that upwards of $20 billion worth of corrugated materials are used in this sector as a whole. The major sectors making use of e-sales systems include consumer electronics, books and media products, fashion, and toys, hobby, and sports equipment.

And there is room for major growth in this market too. According to 2017 data from eMarketer, ecommerce is currently responsible for 10% of all retail sales, and will grow to nearly 15% by 2020.

Smithers Pira forecasts that the overall market for e-commerce packaging will grow rapidly in the coming years – expanding at a compound annual growth rate of 14.3% from 2017 to 2022. This growth will see ecommerce packaging – including corrugated packaging, as well as flexible packaging, and protective and transit packaging – reaching almost $55 billion in 2022. This remarkable growth rate compares to an overall growth rate for the packaging industry of 2.9% in 2017–2022.

 

 Challenges

Addressing this fast-changing market will require corrugated packaging suppliers, and the overall packaging supply chain, to meet new (and in some cases, still developing) requirements.

With an increasingly complex logistics chain, ecommerce packages are expected to be handled up to 20 times or more during a standard delivery. Added to the scale of the necessary warehousing and delivery systems for ecommerce, there is therefore considerable demand for robust, cost-effective packaging solutions in this sector.

Additional demands from brand owners are now being felt by the converting industry, as many brands now require the secondary pack to carry their image into the home, not just the retail outlet. This increases the need for converters to produce high-quality graphic designs on the shippers themselves.

Meanwhile, the advent of ecommerce – especially in the grocery sector – is likely to have a slight negative impact on retail-ready packaging (RRP) usage, as e-sales do not require any RRP systems. Furthermore, the innovation in ecommerce systems such as subscription box services and meal kits that offer direct-to-consumer delivery of specialist food using a weekly or monthly subscription model will have an additional, though slight, impact on the RRP market.

Sustainability

Furthermore, all the sustainability issues facing the corrugated market as a whole come into play even more emphatically in the ecommerce sector, with consumers demanding ease of recycling and returns for their ecommerce purchases.

While lightweighting of board has long affected the corrugated industry, rightweighting and rightsizing are playing an increasingly important role in this market too. This is not only in response to consumer demand for efficient packaging, but also in response to the logistics chain’s adoption of dimensional weight (DIM) pricing.

Up until 2014, retailers were charged freight costs on the basis of package weight, but since then many carriers have introduced DIM weight pricing based on the dimensions of the package, and including a ‘dimensional factor’ (typically 166 (in3/lb)) to determine the DIM weight. The major carriers, UPS and FedEx, currently use the same calculation, which is the cubic size of a package divided by 166 for domestic shipments, and 139 for international shipments. This DIM weight is then used to determine the cost of shipment.

In some instances this has led to significant cost increases, such as a 32-pack of toilet rolls costing 37% more to ship using DIM weight, and similarly a large box of disposable nappies costing nearly 10% more to ship with DIM weight. Similar examples can be found in many lightweight or low-value products, especially in the growing grocery e-sales market.

 

 



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