Industries like cosmetics, pharmaceuticals, and food and beverages have rapidly embraced smart packaging, which offers significant benefits within these sectors.
Utilizing technologies such as QR codes, RFID, and NFC, intelligent packaging enables quick and cost-effective access to data about the product and its environmental conditions.
As competition fosters innovation, brands recognize the pivotal role of packaging in the customer experience and are leveraging technology to stand out in this highly competitive landscape.
While we are still in the early stages of connected and smart packaging, the surge in online shopping has introduced two new demands for brands to address.
The first requirement involves brands providing memorable unboxing experiences that can replicate the sense of excitement customers once experienced in-store.
Brands must deliver distinctive and unique packaging as the online space becomes increasingly crowded, making it extremely important to differentiate their brand.
Technology-driven Competition in Packaging Innovation
Customers find smart packaging appealing because it meets their needs by providing additional benefits and an improved customer experience through the integration of various technologies and features. This is how it works.
In the traditional retail experience, customers engage with multiple physical touchpoints before deciding to make a purchase. However, the dynamics change in e-commerce, where the package often serves as the initial physical interaction between customers and a brand.
The pandemic has expedited the transition toward online shopping, with projections indicating that online sales will surpass in-store point-of-sale transactions within three years.
The cost-effectiveness of online sales enables new brands and retailers to allocate resources more efficiently to online channels rather than traditional brick-and-mortar stores. Consequently, packaging plays an increasingly significant role in this context.
The package must make a lasting impression on the customer from the moment it is delivered, even before it is opened.
This impression should accurately reflect your brand and the desired customer experience. This is the key to winning customer loyalty, encouraging repeat purchases, and generating organic online marketing through consumer unboxing videos, reviews, and product recommendations.
Smart packaging provides brands with the means to deliver this impactful experience. It offers additional benefits and enhances the customer experience by integrating technological features.
Revolutionizing The Online Shopping Experience With Smart Packaging
Online retail sales are experiencing faster growth compared to physical retail locations. A recent report from comScore Inc. highlights that the convenience of checkout, the variety of products and brands, and the ability to create store accounts are driving this trend.
As online shopping becomes more prevalent, the impact of product packaging on purchasing decisions may diminish. This raises questions about how the growth of online retail can influence the design and functionality of product packaging.
In the realm of online retail, ensuring product protection and efficient delivery is crucial. A 2011 white paper by Shikatani Lacroix examined survey responses from 1,000 participants and revealed that online buyers place greater value on the functional aspects of packaging, such as ease of opening, recyclability, and reusability for storage, rather than the aesthetic or branding elements of the package.
Differentiating Functional Demands of Online Retail Packaging
Packaging plays a significant role in both online retail and traditional in-store purchases, although there are specific functional differences between the two.
In brick-and-mortar stores, packaging needs to address safety and security issues, including protecting against theft and tampering.
In contrast, online retail presents its own unique security challenges. It offers a profitable and easily accessible marketplace for the illicit sale and distribution of stolen or counterfeit products.
This situation creates an opportunity for advancements in packaging and product design that can authenticate genuine items and empower consumers to track their purchases from production all the way to delivery.
Examples of Packaging Solutions for Online Retail
Amazon's "Frustration-Free Packaging": Amazon collaborates with manufacturers to create packaging that is easy to open, fully recyclable, and eliminates the need for additional secondary packaging.
Innovative Smart Packaging: Some packaging features illuminations, sounds, and aromas to appeal to customers' senses. An example is Danone's collaboration with Font Vella, where a 'smart cap' allows customers to track their hydration and monitor water intake through a connected app.
Connectivity and Augmentation Features: Brands can enhance the communication and functionality of products by integrating scannable QR codes, sensors, or microchips. QR codes on packaging enable customers to access product information, including ingredients, origins, styling advice, and recipe tutorials. They can also provide marketing content such as competitions, product recommendations, and virtual brand experiences.
Gucci Live: Gucci offers a virtual shopping experience through a video link-up called Gucci Live. Customers can access this experience by scanning QR codes on the packaging. The service replicates the excitement and discovery of physical shopping, featuring a dedicated service center with staff and a replica of a flagship store.
QR Codes for New Shopping Opportunities: With declining footfall, QR codes on packaging can redirect customers to new shopping opportunities, simulating the allure of the traditional high-street experience.
Addressing Over-Packaging and Custom-Fit Delivery Boxes
Staples and Packsize are collaborating to tackle the issue of over-packaging in shipments that require secondary packaging. Their "Smart-size" packaging initiatives aim to create custom-fit delivery boxes on demand.
The objectives of these efforts are to decrease the amount of warehouse shelf space required for storing transport packaging, minimize the use of secondary packaging material (leading to an average box size reduction of approximately 20 percent), and reduce the need for void fill, resulting in a 60 percent decrease in the use of air pillows.
The ability to customize box sizes also enables more orders to be accommodated per delivery truck, leading to estimated carbon footprint reductions of approximately 30,000 tons.
Conclusion
The rise of online shopping presents an opportunity for the recovery of valuable products and packaging materials.
Including return labels in product, shipments enables the efficient return of high-quality materials to appropriate recycling facilities. This approach can enhance recycling accessibility and provide recovery options for materials that are often disposed of in landfills or incinerated.
While it is unlikely that retail locations and traditional packaging will be completely replaced, the unique in-store service cannot be replicated by the online experience.
Building a brand's reputation and maintaining strong consumer relationships will continue to rely on a certain level of familiarity to establish trust.
The influence of online retail on packaging is already evident through the efforts of companies like Amazon, Staples, and Packsize, among others.
As online retail sales become further ingrained in consumer shopping behavior, we can expect ongoing packaging advancements driven by the influence of online retail.
