Demand for Retail E-Commerce Packaging Expands
U.S. demand for retail e-commerce packaging is projected to expand, due to online shopping growth for its convenience and ability to provide a wider selection than brick and mortar stores, according to a study by The Freedonia Group (freedoniagroup.com). The ease of viewing and comparing products via computers and mobile devices will continue to boost growth for e-commerce retail sales, as will the added spending power of millennials, the largest demographic of online shoppers.
Through 2020, the fastest growth is expected for boxes, labels and mailers. Opportunities for boxes will be boosted by package volume increases coupled with the presence of custom boxes used to differentiate brands, promote a premium image and create excitement for “unboxing.” However, the use of dimensional weight to calculate shipping costs will moderate gains for corrugated boxes, leading some firms to downsize boxes or use mailers for smaller items or products that are not fragile. Gains for labels will reflect package volume expansion and the increasing prevalence of value added product types, particularly integrated labels. Advantages of light weight and low cost will fuel strong advances for mailers, with poly mailers expected to enjoy the best prospects.
The largest market for e-commerce packaging is traditional e-commerce retailers. Gains will be similar to the overall average, propelled by continued robust prospects for e-commerce retail sales. Competition from third-party fulfillment and logistics firms (3PLs) and an increased web presence among brick and mortar retailers will prevent faster advances. 3PLs will represent the fastest growing e-commerce packaging market through 2020 and beyond. Opportunities will be helped by the growing trend of outsourcing fulfillment processes to firms with expertise in supply chain functions and to limit additional costs associated with warehousing, staffing, and other fulfillment functions. In the brick and mortar retailer market, increases will be aided by the growing share of company sales generated via e-commerce and the focus on developing infrastructures for an omnichannel approach.
Food and beverages, an area in which consumers have so far been slow to adopt online shopping, will represent one of the fastest growing applications for e-commerce packaging, reflecting changes in shopping patterns, especially among younger consumers, and the need for specialty packaging with perishable items. Robust gains are anticipated in areas in which e-commerce purchases have not had much of a foothold until relatively recently, such as pet food and household items.