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FlexForum Insights: Bridging the Gap in E-commerce Sustainability Actions and Promises


The digital marketplace is constantly changing, and with it, the requirements for packaging that ensures products reach customers effectively. Daniel Arnold, a leading expert from Trifecta Research, shared insights at the PLASTICS Industry Association's FlexForum on what customers look for in e-commerce packaging. His insights are key to understanding consumer loyalty and happiness in the era of online shopping.


Arnold pointed out the impressive growth of e-commerce, noting that it expanded significantly over the past two decades. Last year, e-commerce sales in the U.S. hit a milestone, surpassing $1.1 trillion. Looking ahead to 2027, he predicts a surge of $600 billion more, reaching $1.7 trillion with an annual growth rate of 10 to 11% over the next few years.


So, what does this mean for the world of packaging? By 2027, online sales will represent one-fifth of all U.S. retail sales dollars. Consequently, the market for e-commerce-specific packaging is expected to soar, doubling in value from $9 billion to nearly $20 billion. This growth underscores the critical role packaging plays in the expanding landscape of digital retail.


Packaging Influences Choices of Deliberate Consumers


In times of economic uncertainty, consumers are becoming more cautious with their spending. Despite record highs in the stock market, inflation, particularly in areas such as food, has proven to be more persistent than anticipated. This has led to shoppers becoming more deliberate in their buying choices, according to Arnold.


This shift in consumer behavior is evident in the consumer packaged goods (CPG) sector, where brand loyalty is diminishing. Consumers, concerned about the economy and inflation, are increasingly open to exploring alternative brands. This trend highlights a significant change in purchasing patterns, driven by economic factors and the desire for better value.


·     5% of consumers say they've changed their shopping habits, citing inflation as the reason
·     58% Say that inflationary concerns have made them less loyal to brands
·     28% of consumers have postponed major purchases
·     37% have switched to cheaper products, especially in highly commoditized categories like food and clothing


Arnold highlighted that beyond just being cautious with their spending, consumers are becoming increasingly selective, setting stricter budgets for themselves. They are looking for a deeper connection between their personal values and the brands they choose, especially when shopping online. This search for alignment is driving a more purposeful approach to shopping. According to Arnold, every aspect of a product, from its content and packaging material to its overall design, plays a crucial role in demonstrating the product's quality. These elements can significantly enhance the perceived value of a product to consumers, making packaging an integral part of their intentional purchasing decisions.

Sustainability stands out as a top priority among the younger generations today.


Arnold emphasizes the enduring nature of sustainability in the marketplace, noting that a staggering 82% of consumers desire brands that commit to sustainable practices. The push towards sustainability is largely propelled by Gen Z, with over half of consumers recently opting for sustainable products, and a significant portion willing to pay more for these choices. Moreover, they're patient enough to wait longer for their sustainable purchases to arrive.


In a world where shoppers aim to align their purchases with their personal values, yet find the concept of "sustainability" somewhat nebulous, they look for clear guidance. This is where third-party endorsements become crucial, offering "social proof" through reviews, ratings, media mentions, and official recognitions. This external validation not only supports the thoughtful approach consumers take to shopping but also provides a socially endorsed rationale for their purchasing decisions. Additionally, user-generated content, like unboxing videos, leans heavily on packaging to validate and enhance these decisions. The design and material of packaging communicate directly to consumers and third-party validators alike, underlining the importance of sustainable choices.


·      38% of all US shoppers make monthly purchases through social media, where others can view and comment on the shopping behavior

·      50% of younger consumers 24 and under (Gen Z) look to social platforms like Facebook, Instagram, and TikTok for their purchases

·      40% of Americans ages 18 to 24 use TikTok and Instagram as their search engines of choice

·      International brands gain prominence as international social media formats unlock nearly equal footing via these  democratizing channels. As long as delivery, quality, and cost are near parity or better to traditional domestic brands, internationals represent new challengers.


Arnold pointed out that these considerations are paramount for brand managers at major companies and beyond as they strive to enhance the relevance and appeal of their products, even within the realm of social media.


Precision in Delivery and Hassle-Free Returns: The Modern Unboxing Experience


The rise of e-commerce brought the unboxing experience to the forefront, especially with the advent of subscription services. It has become a fundamental aspect of the consumer journey, uniquely occurring after the purchase. Brands now use unboxing and the design of their packaging as a means to convey their values, incorporating creative designs, messages, and innovative opening methods.


Arnold further notes that delivery has assumed a critical role in the online shopping experience. According to surveys of global shoppers, fast and reliable delivery tops the list of priorities when shopping online. Additionally, clear communication about delivery times is crucial in determining whether customers complete their purchases.


·      86% of consumers make a point of checking your retailer's return policy before making a purchase

·      56% of abandoned shopping carts online or abandoned because of concerns related to delivery

·      76% say that a poor delivery experience affects their decision to order from that company or from that retailer again


Arnold highlights that the convenience of returns has become a critical aspect of the online shopping experience. Consumers now prioritize seamless, effortless, and free return policies even before making a purchase.


Packaging is a crucial factor in influencing both initial and repeat purchases, serving to communicate brand values, enhance the unboxing experience, and contribute to the "porch appeal" that captures the attention of third-party influencers. Furthermore, the aspect of easy returns and efficient return logistics showcases where flexible packaging can excel, proving its value in the consumer's purchasing journey.


Consumer Confusion on Sustainable Packaging


Sustainable or "eco-friendly" e-commerce packaging is especially appealing to younger consumers, who are generally more familiar with online shopping and direct-to-consumer (D2C) models than older generations. However, there's a notable gap in understanding what sustainability in packaging truly entails.


Arnold shared that two-thirds of consumers admit they're not confident in identifying recyclable packaging. This lack of clarity is becoming more pronounced; in 2015, 69% of consumers felt they understood what made packaging recyclable and the concept of recycled content. That figure has since dropped to 61%. This decline is unexpected, particularly in an era where sustainability is a major concern. Despite expressing a strong preference for eco-friendly packaging solutions, many consumers are unsure about the specifics of recyclability or the use of recycled materials in packaging. This contradiction suggests a kind of "sustainability schizophrenia" among shoppers, indicating a disconnect between their environmental aspirations and their understanding of sustainability practices.


Eco-friendly and sustainable packaging is increasingly popular among younger consumers, who are generally more engaged with e-commerce and direct-to-consumer (D2C) models than older generations. However, there's a gap in understanding what "sustainable" truly entails.


Arnold points out a concerning trend: two-thirds of consumers admit to being unsure about which packaging materials are recyclable. This confusion is growing, as awareness of sustainability issues does not match understanding. In 2015, 69% of consumers felt they had a grasp on what made packaging recyclable and what didn’t. That number has since dropped to 61%. This discrepancy highlights a paradox: while there's a strong declared interest in eco-friendly packaging and sustainable shipping options, there's also a significant lack of clarity about what recyclability means or how to identify packaging made from recycled content. This situation suggests a sort of "sustainability confusion" among consumers, where the desire for sustainability is clear, but the understanding of it is not.


·      61% said they understand recycled content, and

·      57% claim it’s meaningful, and

·      56% claim that  it reflects a good brand or a good company. But,

·      only 57% understand what it means or believe when a package claims it’s made from PCR


Arnold highlights a significant opportunity for the packaging sector to enhance consumer understanding. However, he stresses the importance of pairing this with a robust campaign focused on educating consumers about sustainable packaging options.


Brands' Own Contradictory Behavior


Large global consumer packaged goods (CPG) companies thrive on their ability to produce at scale, utilizing highly optimized equipment and materials across vast, intricate supply chains. However, the adoption of truly innovative, sustainable packaging alternatives hasn't quite reached this level of scale and efficiency.


The question then arises: Are brands prepared to invest more in eco-friendly packaging for e-commerce?


Arnold sheds light on the misconception that brand owners resist the higher costs associated with sustainable packaging. Findings from Trifecta Research reveal a different story. According to their data, a significant 69% of brand managers reported they are willing to, and have, paid up to 20% more for sustainability features in packaging. While they may not always choose the pricier option, many have indeed opted to spend extra for eco-friendly packaging solutions when available. This willingness has led to a notable premium of up to 20% per unit cost compared to conventional e-commerce packaging.


The key insight is that the worlds of durable, heavy-duty packaging and lightweight, eco-friendly packaging are merging. What used to be separate goals—creating packaging that's either strong or sustainable—are now becoming unified objectives. And brands are investing in this shift.


Arnold notes the growing demand from consumers for sustainable e-commerce packaging, matched by brand managers' willingness, as indicated in surveys, to invest more in these solutions. Despite this readiness to spend on sustainability, the main strategies brands adopted last year, especially for products sold online, tended to be more inward-looking.


·      39% of redesigned packaging for automated handling applications

·      33% introduced new formats like multipacks

·      37% updated their labeling


Arnold highlights a misalignment between consumer expectations and brand actions regarding sustainable packaging. Despite consumers emphasizing the importance of sustainability, recycled materials, and ethically sourced packaging, these priorities aren't reflected in the top actions taken by brand managers for e-commerce packaging.


This situation mirrors the gap between what consumers claim and their understanding of sustainability. While sustainability captures the interest of both consumers and brand managers, leading to a shared focus, there's a noticeable gap between intentions and actual practices. The alignment between what's said and what's done in terms of sustainable packaging is still in the process of fully materializing.


Layered Specialization in Packaging Trends


Arnold from Trifecta Research has pinpointed six key trends in the specific area of sustainable, flexible e-commerce packaging. This focus falls within a highly specialized segment of the packaging industry, highlighting sustainability within the realms of flexible and direct-to-consumer (D2C) e-commerce packaging.


The leading trend among these is sustainability, with a staggering 90% of those responsible for packaging procurement recognizing it as a crucial factor in their decision-making process. Additionally, 55% of these decision-makers report progress towards their carbon emission targets by adopting lighter, flexible packaging options.


Arnold emphasizes the significant link between sustainability and consumer loyalty, pointing out that a brand's commitment to sustainable practices greatly influences customers' willingness to continue shopping with them.


He also discusses the concepts of returnability and reusability, underscoring the importance of durable packaging that can be reused by the brand. This approach aligns returnability with the goal of reusability, showcasing how flexible packaging can be both sturdy for multiple uses and maintain its benefit of being lighter than traditional packaging options like kraft corrugated. Among the various returnable packaging options, plastic returnable packaging is forecasted to experience the most rapid growth, with a projected increase of 63% from 2022 to 2029, with companies like RePack and no-boxx leading the way in this trend.


Historically, efforts to cut costs were often viewed as being at odds with sustainable practices. However, the concept of source reduction is emerging as a strategy that serves both cost efficiency and sustainability objectives. This trend is particularly noticeable in the realm of retail packaging, where significant progress has been made in reducing the weight of items like bottled water containers. Yet, the journey towards lighter flexible e-commerce packaging is still unfolding.


Arnold observes an increasing convergence between cost-saving measures and sustainability initiatives. Innovative strategies are being developed that manage to serve both goals, representing a fusion of process and material innovations aimed at minimizing costs while enhancing sustainability.


He also points to a visual connection between eco-friendly packaging and minimalist design, noting that consumers tend to perceive smaller, less intrusive packaging as more sustainable. This perception is bolstered by the trend towards right-sized, on-demand packaging, which is tailored to fit specific product orders, reducing waste and the impression of excess packaging—for example, the excessive scenario of a toothbrush shipped in a large box.


Furthermore, the advent of smart and connected packaging, which uses QR codes, RFID, or NFC tags, offers a way to convey a product's sustainability credentials directly to consumers. This technology not only reinforces the sustainable image of the packaging but also aligns with the preferences of consumers who are increasingly making purchases based on intentional choices and values. Smart packaging, therefore, represents a significant step forward in utilizing packaging as a medium to communicate a product's environmental friendliness to discerning shoppers.

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