Packaging Design: The e-commerce difference

by | Nov 16, 2017 | Blog

The e-commerce difference

Guest Post: SARAH KNEEBONE – Research and Marketing Executive PLAY Market Research

E-commerce has shifted the way that people shop and overhauled the customer journeys we once knew so well.

Packaging is just one touch point in this journey but it is arguably the most important… we are all guilty of judging books by their covers. So, how is the growth of e-commerce changing the customer journey (and experience), and the role of packaging? What should you consider in order to optimise your product’s packaging for the online shopping environment? How could you go about doing this? Read on to find out…

Growth

Australian e-commerce is growing five times faster than traditional retail and now accounts for roughly 7% of total bricks and mortar sales (and the grocery industry is heading this way too… for more on the future of Australian grocery, read our free report ‘Fresher Food Faster: Does Amazon spell the end for Coles and Woolworth’s? HERE).

“The prospect of the online retail industry equalling the FMCG industry in size globally represents a massive shift in consumer habits from the perspective of manufacturers and retailers. It’s the biggest change we will see in our lifetime. Any FMCG strategy that’s not already factoring in e-commerce is missing a big part of the growth story.” Nielsen.

According to NAB, Australians spent a whopping $22B online in 2016, that’s over 7% of total bricks and mortar spend and Amazon have only been selling books for the most part. Australia’s online retail sales penetration is consistent with other developed economies such as Canada and Japan.So, where does the power of packaging come into this e-commerce revolution?

“Packaging innovation plays an important role for brands to make the transition from the past retail relationship into this new world of e-commerce” Phil Hague.

e-commerce-2.png

The e-commerce difference

The online buying experience is wildly different to that of a traditional store, and this means that every aspect of the customer’s experience and journey must be reconsidered. There are learned behaviours that shoppers have developed over many years of shopping in-store, and these are being turned upside down by e-commerce.

“The customer makes the selection in a 2D world and doesn’t have the ability to touch or feel the product before making the purchasing decision. Add to that the considerable wear and tear a product endures before it ever arrives and the experience is turned upside down.” Jabil. This creates a new challenge for the consumer and for the retailer to make the process more intuitive.

The role of packaging changes

In a physical store, your product’s packaging is heavily relied upon to sell the product. However online, there are alternative cues that you can use to your advantage.

In an e-commerce setting, product descriptions and other visual assets mean that packaging isn’t the full package’ as it would most likely be, on a cluttered supermarket shelf.

There is space for a product description, customer reviews, and you can often include multiple images of the product to grab attention (and showcase key features more effectively – in and out of packaging). In the online space, there are more strings to your proverbial bow.

 Getting lost in a crowd

Typically, a bricks and mortar superstore will carry anything from 20,000 to 30,000 products and there are only 1,000 to 5,000 products in your average convenience store.  In comparison, upon the launch of Amazon Fresh in London, the business promised UK consumers over 120,000 products to add to their grocery baskets.

In this case, choice overload gets very real. Shoppers may not find your product and they might even (virtually speaking) walk away when they can’t find what they need. Your product has got to grab the shopper’s attention amongst double, triple or even quadruple the competition.

Aiming for that ‘top 3’ or ‘first page’ position becomes so much more important, as scanning around a shelf in-store is much less of a psychological burden than scrolling through pages and pages of products online.

One advantage of all this noise for smaller brands, is that big brands can’t billboard as effectively by taking over the shelf display and drowning other products out. E-commerce provides niche, specialist and small companies with an opportunity to make their mark.

 The search

In-store, shoppers can pick up and handle your product. They can make quick product comparisons. In-store it is much easier for them to evaluate the size of the product but on a smart phone screen, shoppers have to do much more analysis. It is difficult to differentiate between a 500g and 1kg box of tea or different cuts of meat. Images can be misleading, so pack sizing is problematic.

What about if you wanted to break into a saturated category, like tea? Think about loyal customers’ behaviour… price promotions in-store might grab their attention and cause them to take a chance on a new brand, but online, they could skip straight to typing in a search for their ‘go to’ product, therefore leaving no opportunity to be distracted by a competing brand.

e-commerce3.png

Winning online

So the online environment seems pretty different and slightly scary. Here are a few of our top tips to make your online mark, using just your product’s packaging:

  • Grab attention with the visualsWhen rapidly scanning the thousands of choices, your product needs to catch the shopper’s eye. Prioritise pack visuals and the quality of your imagery. It’s also worth remembering that the majority of online stores are suited to square shaped images. Additionally, make sure you provide reassurance on quantity/volume if you are not able to showcase this visually.
  • Consider the ‘unboxing’ experienceThis is an opportunity to create loyalty and repeat purchase. If the parcel that arrives makes your shopper feel special and like they’ve received a gift in the post, rather than just another brown parcel, they’re more likely to remember your brand and come back to you again.You could also add to the customer experience by making sure the packaging fits in a typical mail slot, so your customer has the comfort of knowing it will be delivered. Many shoppers are hesitant to buy online, so you must exceed their expectations and prioritise their experience in order to keep them coming back for more (this extends to the whole buying experience).
  • Lose the extra weightProducts with a high price-to-weight ratio are more likely to get buy in from retailers, as they’ll cost  less for them to deliver. Consider simplifying packaging or changing materials to reduce weight – even introducing sustainable or recyclable packaging to reduce waste.
  • Re-evaluate the role of your product’s packagingWhen it comes to fresh groceries, for example, shoppers want to be able to see the product – and there are no sensory cues online. Think about the fresh, ‘farmers market’ experience that many shoppers look for today.Imagery which incorporates packaging is a barrier to this experience, and as many shoppers already lack confidence in the freshness of online purchases, it might be worth going bare.

e-commerce-4.png

Your action plan

For the reasons we’ve highlighted, to be confident that your packaging will be successful, it must be tested in both environments (online and in-store). Don’t have the resources or time to do both? It is possible to do virtual shelf mock ups which replicate both environments in order to analyse your shopper’s decision-making process in each case.

You can have respondents go through different paths-to-purchase as they typically would in each environment, navigating around the store or website, scanning, choosing and putting products into their basket (virtual or otherwise). This way you can find out whether your product’s packaging is performing well in both, or whether alterations need to be made which differentiate the pack and optimise performance.

You can also use eye tracking to explore search behaviour and process, viewing patterns and where shoppers’ attention is focused. When it comes to your packaging design, it might be worth considering if it is even appropriate to have aone size fits all’ approach. It’s likely that in time, a dual approach will need to be adopted, as technology and consumer demands further differentiate the customer journey and experience.

e-commerce-5.png

 Over to you

Packaging research is the essential first step in the pack design (or redesign) process. You can read the original article and more HERE