The Package Deal: What Online Grocery Consumers Want
Study Reveals Consumer Sentiment
In an effort to understand global online grocery trends and the correlating opportunities for food and beverage brands, Tetra Pak commissioned consumer research in five countries, as well as market segmentation studies and e-tailer interviews in North America, Europe, and China. The information has culminated in the 11th annual Tetra Pak Index titled “Online Grocery: Insights and Opportunities.”
The comprehensive research also achieved another goal: offering insight into what online shoppers expect from product packaging.
As online grocery purchases rise, food and beverage brands that capture and retain market share are the ones that package their products in ways that align with what consumers demand. The Index reveals several data-driven insights.
- Protect, Preserve, Reuse: More consumers shop online today than ever before, with convenience as the driving factor. In fact, consumers are so pressed for time and efficiency that online grocery shopping has realized a 30 percent increase in sales from March 2016 to 2017, leading experts to forecast a 4.6 percent annual category growth globally.
With more product being shipped around the globe, there’s increased pressure to ensure the products make it to their destination on time—and intact. Consumers expect packaging to protect and preserve the product, so safe, secure delivery is the top priority for brands.
But with growing environmental concerns and a social narrative prioritizing sustainability, consumers also want their packages to be recyclable and space-efficient, the latter of which can also reduce transport costs by 30 to 50 percent, helping to shrink the brand’s overall carbon footprint.
- Small Is the New Big Deal: People shop more frequently, thereby purchasing items in smaller or fewer quantities and reducing basket sizes. To stay competitive, food and beverage brands must pivot to different product amounts or sizes and correlate packaging accordingly.
- Introducing New Products: Advances in packaging also pave the way for new online products. With the right packaging solutions, products that were once required to be chilled (such as milk) are available for ambient distribution, bringing new and different grocery products to consumers through the e-commerce channel.
Like any industry, online grocery defines, and is defined by, trends. The Tetra Pak Index analyzed the data and mapped many of these to packaging. From space-efficient cartons to smart printing options, online grocery shoppers around the world expect packaging to deliver more than the product. They want value, too.
All Paths Converge on Convenience
The quest for convenience is the No. 1 factor driving online grocery shopping around the globe. Consumers want quick, frictionless ordering and delivery of products. As such, value-adds like easy/auto replenishment capabilities (think Amazon’s Dash Button) or flash deliveries (which foster impulse buying) can be a competitive differentiator.
Packaging plays a critical role in the quest for convenience. Space-efficient, easy-to-store packaging is sought after by many customers today and will evolve from an amenity to a marketplace requirement by 2025. “Frustration-free” packaging, which is defined as being easy to cleanly open, is also key to delivering convenience.
Packaging Must Perform
One of the biggest brand busts is packaging that doesn’t stand up to transport or the weight of the product. Packaging that isn’t robust can also cause items to shift and damage one another. This is why many food and beverage brands have turned to cartons as the answer for the product packaging. Cartons are lightweight, stable, and sturdy. They can also function as a marketing touchpoint with the right branding and design.
Smart packaging—made possible by printing a digital code on the package exterior—enables the brand to track and monitor each item from filling to doorstep. The digital code can also be scanned by a consumer’s smartphone, providing opportunities for brand engagement.
Smart packaging fosters an array of benefits for the brand, including end-to-end traceability, sharing of specific product information, and customer programs that require a unique identifier (think loyalty programs).
Sustainability is really more than a trend. For many brands, environmental awareness is a core belief in their operations. Brands can demonstrate their commitment to protecting the environment by choosing to use recyclable packaging, as well as packaging made from renewable sources.
As more products become available in the e-commerce channel, the number of deliveries will only increase. This reality means brands must have a robust supply chain and fulfillment strategy because increased deliveries put pressure on transportation and logistics. As a result, brands must find ways to reduce their carbon footprint. Eco-friendly packaging that requires less space and weight can help to promote sustainability.
And what about secondary packaging? Tetra Pak’s research revealed that an overwhelming majority of online grocery consumers dislike it and will opt to buy from a brand that uses less packaging in order to promote sustainability.
Personalized and Smart Packaging
Opening a package is a moment of excitement for many customers. As such, the research reveals that unboxing the product is an important part of the e-commerce customer experience. This is why printing and design are important marketing tools. Personalized packaging is another.
By interacting with customers through smart packaging, brands can create personalized, relevant relationships that help solidify customer commitment in the moment and for the long term.
Packaging for Tomorrow
What will tomorrow’s packages look like? By 2025, we can expect to see brands leverage augmented reality in their smart packaging to entertain or inform about product or company information. Superfast delivery (milk in 15 minutes!) will be available, and companies will focus on boosting the unboxing experience with more personalized packaging and tactile technology (high-end papers and finishes) that signal luxury or quality.
Technology, innovation, and a global online customer base empower brands to leverage packaging in new and exciting ways. As the competitive landscape heats up, packaging will have to evolve to enable brands to ship new or different products to meet customer demand.
With each package, a brand has the chance to influence the online shopper. As the online grocery channel grows, packaging will continue to play an important role in e-commerce, helping to foster brand engagement, customer commitment, and most importantly, the bottom line.