The Challenging Journey Ahead For Packaging & Retailers
Posted on 26 January 2021

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With COVID-19, retailers have had to navigate the disrupted 2020 landscape with newfound challenges and trends. The pandemic closed economies and encouraged consumers to leverage creative ways to continue shopping, accelerating the rise of e-commerce. This was already a growing trend pre-COVID, only to be heightened due to local lockdowns. Now, virtual shopping and curb-side pickup or delivery is the norm, even for items that were primarily sold in-store such as toothpaste. In an increasingly digital world, adopting new technologies to engage with current trends is critical to retailer success.

 

THE CHALLENGES RETAILERS FACE

In this section, we do a deeper dive into the 3 biggest challenges facing the retail community today, from speed to low visibility and margins. We will look in depth at the digital tools available to address these challenges and support retailers in 2021 and beyond.

Speed

Whether it is the speed of internal processes or speed to market, time is a critical factor for retailers. Improving the efficiency of internal processes must be top of mind before focusing on successful product launches and speed to market. What slows them down?

Lack of Visibility into the Workflow

A retailer’s workflow has many moving parts, from product design to packaging and shelf placement, various teams work on each aspect. Managing workflow is a complex process with siloed teams and disconnected ecosystems that make it hard to keep track of project lifecycles, feedback, and artwork. Without a centralized location for the team’s projects, approvals, artwork, etc., managers have reduced visibility of their entire workflow, which negatively impacts collaboration and productivity. In this situation, managers run the risk of miscommunication, missed deadlines, lengthy speed to market, and time-consuming approval processes.

Increasing Costs and Decreasing Margins

Retailers consistently prioritize cost effective strategies and focus on reducing costs, especially during the 2020 global pandemic. Margins have been significantly impacted and retailers are experiencing unforeseen changes in the way they get their products to market. With margins being slim-to-none, many have created private labels to reclaim their revenue. Private labels can help retailers capture more profit by offering lower prices to their shoppers and driving more traffic.

Expenses have been driven up to maintain brick and mortar stores with fewer in-store shoppers. Many consumers are looking to e-commerce to fulfill their shopping needs, creating pressure on retailers to ensure an enjoyable digital experience. They now need to put time, energy, and money into positioning themselves in the e-commerce space, and the competition is fierce.

 

 

THE CHALLENGES PACKAGING FACES – An Expert’s Opinion

Esko, a GBR community member, spoke with Gino Van Ossel, Professor and Retail Expert from the Vlerick Business School in Belgium about the newest packaging trends specific to e-commerce retailers. Let’s take a look at what Gino had to say and dive into the newest trends.

 

E-Commerce Ready Packaging

Due to the pandemic, the rise of e-commerce has been accelerated by 4-6 years according to Forbes. E-commerce retailers are reimagining the way they design their packaging using e-commerce ready packaging, which means the brand simply labels their package and uses secondary packaging that can withstand the conditions of shipping the product.

Products sold in-stores need to have all the necessary information on the package so the consumer can pick it up and find the information they need to make the decision to purchase.

In e-commerce ready packaging, most of the information is provided or featured online so it’s not necessary to include it all on the physical packaging, since the consumer can’t pick up and examine the product. In other words, businesses utilizing a direct to consumer model focus on e-commerce ready packaging. Their target market is consumers who will receive products directly from manufacturers, thereby eliminating third party distributors and physical stores.

When consumers buy multiple products via e-commerce, they may not be shipped individually. Rather, they are oftentimes shipped in a single box which, according to Gino, emphasizes the use of reusable as opposed to one-time or single use packaging.

As he went on to explain, e-commerce ready packaging calls for designs that are different than the traditional design for products sold in brick and mortar stores. Leaders using a direct to consumer model stand out from their competition by creating new, and more sustainable, package designs to entice and excite their customers when they receive the product.

 

 

Personalization

Who doesn’t love to see their name printed across their favorite products?

Brands want to treat people personally and differentiate themselves by creating personal connections between the consumer and the brand. For example, Nutella will personalize their products by printing people’s names on their labels.

Another example is Duvel, a brewery based in Belgium, that offers engraved beer glasses that come in boxes with varying types of Duvel beer. The box is neatly designed to reflect the originality of the product inside.

Innovative retailers incorporate their packaging into the emotional experience of the product, as Gino states, “The packaging should be part of the emotional experience. Excellent packaging supports the brand personality in a holistic manner: by its looks, its on-pack communication, by the convenience it offers when carrying, opening and using the product.”

 

Sustainable Packaging

Sustainability continues to rise in popularity with consumers. People care about where their products come from, how the workers who made them are treated, and specifically with respect to cosmetics, whether their development entailed the ethical treatment of animals.

According to Gino, the emphasis of sustainability tends to be on the packaging, which is why retailers are shifting from plastic to paper, as paper cartons are inherently more sustainable because they can be reused and recycled.

Gino firmly believes the market will head in this direction. He gave the specific example of Barilla Pasta, which he explained is packaged in “carton boxes, with a little strip of plastic so you can look inside. I don’t think that will exist five years from now. It will be 100% recyclable, easy to use by the consumer…” This trend towards better sustainable packing “is going to be very clear.”

 

Frustration Free Packaging

No one goes out of their way to be frustrated, including when it comes to packaging. Gino noted that “Frustration free means you start from the unboxing experience and end with the cradle to cradle concept that [the packaging is] easy to recycle and so on. This is a very clear trend, and we see that coming also to all other circumstances.”.

According to Sustainability Guide, “Cradle to Cradle (C2C) is about seeing garbage as an eternal resource and doing the right thing from the beginning. It is about making community and product development function in the same way as a healthy ecological system where all resources are used effectively, and in a cyclical way…”.

With this idea of producing and designing products that are sustainable, this type of packaging is easy to unpack and satisfies consumers’ needs for both increased sustainability and convenience.

 

 

EXAMPLES OF E-COMMERCE RETAILERS AND THEIR PACKAGING

 

 

Pact Coffee is a subscription coffee service based in the U.K. What’s special about this company is their emphasis on not only the best coffee possible, but also the ethical treatment of farmers.

According to their website, they use a direct trade sourcing model rather than Fairtrade, believing Fairtrade doesn’t adequately cover the cost of coffee production. Their website highlights they have as few people as possible “getting a piece of the pie,” meaning they’ve eliminated distributors and sell directly to consumers. They ship their coffee in flat packs that fit in the mailbox and are much cheaper to ship. The package was designed from scratch and meant to increase the convenience of home delivery.

Chewy is a pet delivery service with the mission of being “the most trusted and convenient online destination for pet parents (and partners), everywhere.” Similar to Pact Coffee, they interact and ship their pet products directly to consumers, including themed and personalized pet packs. By engaging in these practices, Chewy greatly enhances its connection with its consumers.

Wandering Bear Coffee is another coffee company with the ability to create a personalized coffee subscription and deliver it directly to the door. Just as Pact focused on the ethical payment of farmers, Wandering Bear Coffee focuses on sustainability, with recycled packaging materials.

They’ve eliminated plastic from single serve coffee caps, which are made out of sugarcane instead. Their packaging is specifically designed to be shipped online.

 

CONCLUSION – PACKING IT ALL UP

“Retailers and brands still think [brick and mortar] store first,” says Gino, which is a mindset both ineffective and non-sustainable in an online retail landscape continuing to evolve. The e-commerce retailers are setting the trends, especially in the area of packaging, and the examples above demonstrate their willingness to have their brands meet their consumers’ needs with due regard for each new trend encountered.

When discussing the rise of e-commerce and e-commerce ready packaging, Gino opined, “Of course, digital has been transforming our world, our economy, and buying behavior at a very steep pace. But covid-19 has accelerated this digital revolution even further, as well as many other sometimes conflicting trends. The cocktail of speed, uncertainty and volatility shapes a future where success will need you to be agile and flexible…. And – of course – that also applies to everything related to packaging.”. This is very good advice for any company wishing to succeed in today’s rocket-paced market.

 

ABOUT ESKO

Retailers are navigating a complex, unexpected environment, creating the necessity to strategically transform their packaging, artwork and workflow management processes. Using the right technology, retailers stay connected to customers and meet them at the precipice of any new trend. A digital toolkit from Esko ׀ Brand Solutions enables retailers to adapt to consumer needs, launch products efficiently, and deliver the omnichannel retail strategy imperative in today’s changing economy.

Esko ׀ Brand Solutions offers a fully integrated suite of software solutions to help companies manage their packaging process. From workflow and digital asset management to 3D design tools, Esko ׀ Brand Solutions has you covered.

Learn more about Esko ׀ Brand Solutions here or contact hello@esko.com.

Category: Reports

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Francois Germain

Francois Germain holds a Masters’ degree in General Engineering. His career spans power generation, chemicals, refining and offshore. In 2014 he joined Total Refining and Chemicals as VP Health & Safety where he leads global Safety Culture transformation programs for several Business Unit’s within Total. Francois is now leading Digital Innovation within Total Refining and Chemicals

Ron Wissenburg

Ron his main experience is redesigning and implementation of the changes in supply chain processes and organization by leveraging IT solutions. He started his career in consulting at Deloitte where he supported business transformations with SAP in various industries. He Joined Alstom Power in March 2010 which in 2016 Alstom became General E. At Alstom/GE he had various IT leadership roles and the past 3 years he has been working on driving Digital Technology programs within Quality and EHS for Gas Power.

Pierluigi Petrali

Pierluigi Petrali has been working Whirlpool Europe since 1989. He started his career in Information Technology, working at introduction in Whirlpool of CIM, MES and Fault Tolerant Networks. He has then worked in innovation projects, contributing to the spread and growth of TRIZ methodology in Italy and Europe and to the development of product/process design support approaches. Presently he coordinates manufacturing research and development activities for EMEA region. Directly involved as technical and main partner in more than 10 funded research projects under FP7 and H2020 program in the last five years, he’s currently working in definition and implementation of Whirlpool Industry 4.0 strategy. He’s the inventor of five patents and author several technical papers and public speech on TRIZ, Technology Forecasting, Manufacturing Quality, Internet of Things and Industry 4.0.

Henrik Fransson

Henrik Fransson is a Swedish manager with an aeronautics and computer science background working for Airbus in Hamburg, where he has held various management positions. He is passionate about finding new ways of working and influencing the lives of others by making their daily life easier.

“Use my data to serve me, do it wisely and with care”

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Bjoern Neal Kirchner, a graduated economist from Munich and London universities, has almost 20 years’ experience in logistics and supply chain management at senior level. Shifting twice between China and Europe, he has worked in 5 countries moving along the entire supply chain. He gained experience in emerging markets and led teams through challenging SAP-implementations and post-merger integration projects. With the focus on building high performance teams, Bjoern has been engaged in various business process optimization and organizational transformation projects. Currently, he is leading the Global Supply Chain team in Amsterdam for Adhesive Technologies of HENKEL.

Stefan Schrauf

Dynamic, self motivated and results-oriented cross-cultural team player with a proven track record of digital operations and supply chain strategy, excellence and transformations across several industries including industrial products, automotive, consumer goods and chemicals.

Dr. Stefan Kluge

• Education: Chemistry, Information Technology, General and Environmental Law, Toxicology

• Companies: DASA, General Electric Capital/ BMW, Siemens, Infineon, Intel

• Functions: R&D, Systems Engineering, Factory Automation, Strategic Planning, Manufacturing Strategy, Business Planning, Outsourcing Strategy, Supplier Development, External Manufacturing Management

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Mr. Toni Sirviö has been working at Konecranes Plc. since 2005 with various responsibilities within Sales development, Commercial Excellence and Supply Chain Management including Project Management, Global Order Management, Pricing, Planning and ERP Tool process and conceptual development/deployment. Mr. Sirviö has also been working in the Commercial Excellence program as a project director for the sales lead
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Sean Garoghan

An experienced and results orientated Sustainability and Compliance senior manager with a background of 10 years working within the service and energy sector with strong leadership and people management skills and specialising in Sustainability and Compliance. A professional buyer with a wealth of experience in stakeholder management and developing supplier compliance frameworks. Pro-efficiently experienced in various procurement and supplier systems such as; ORACLE 11i & R12, SAP, Proactis and Avetta. Experienced within all Microsoft and Google packages, highly proficient in Excel and highly experienced in data analysis and commercial intelligence with extensive knowledge within OHSAS and ISO audits and accreditation's and CDM regulations.

Vera Bartsch

Vera Bartsch is the Sustainability Manager for UPM Raflatac’s EMEIA region. She leads the self-adhesive label company’s sustainability efforts in the market. Vera’s activities include providing expert sustainability consultancy for sales, stakeholder and partnership development, management of eco-design, life cycle assessment with UPM Raflatac’s Label Life tool, recycling of label waste through the company’s RafCycle program as well as sustainability marketing and communications.

Vera has a background in sales of label material with regards to sustainability in Central Europe, working with both label printers and brand owners. She coordinates the cooperation with other UPM business units for UPM Raflatac and has worked on several international projects for the development of UPM Raflatac.

Rebekah Bell

Rebekah currently serves as the Work Management & Planning Manager for Southern Company’s Fleet Performance & Reliability organization. Rebekah was the leader in the integration and implementation of CiM Visual Planner for daily work scheduling and has spent the last seven years of her career as a subject matter expert on work management, maintenance strategy, and process improvement across the Southern Company fossil, hydro, and renewables fleet.
Rebekah began her career with Southern Company in 2006, and over the last 16 years Rebekah has served in a variety of maintenance roles, including experience additionally in contractor relations, fleet outage optimization, and reporting and analytics.


Rebekah holds a Bachelor of Science in Chemistry from the University of South Alabama and a Master of Engineering in Construction Engineering Management from the University of Alabama at Birmingham. She is the proud mother of Kimberly Grace, 17.

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Dynamic, entrepreneurial business strategist with over 30 years of professional experience in organizational and business development in the segments of Digital Transformation, IIoT, Artificial Intelligence, Cyber Security, automation of enterprise processes, sales of innovative SW solutions and services, portfolio management, consulting, system integration services, outsourcing as well as business transformation, change management, product management and product development.

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I currently lead Reliability Engineering for Amazon Europe, which includes robotics, reliability programs, learning and information services, predictive analytics (machine learning), computerized maintenance management systems, new technology introduction and new site launches. Previously, I was Head of Central Programs and Capability for Amazon Engineering Services Europe, where I led several teams that supported the growth of Amazon's warehousing capacity. Prior to this I was responsible for manufacturing performance measurement and operational excellence for SABMiller (FTSE-10), who were the world’s second largest brewer by volume with over 100 operations worldwide in Africa, Asia Pacific, Europe, Latin America and the USA. Before this I led a team delivering a portfolio of product change initiatives from project initiation through to implementation and launch at Cadbury. I have spent three years living in Poland, where I worked on the design, construction and commissioning of two new-build confectionery factories.