2020 will be remembered as a year of extremes

Businesses the world over saw forecasts of growth be replaced with a struggle to survive, while others – predominantly e-commerce businesses had to cope with a surge in demand.

Globally, as we slowly adjust to the new normal of 2021, CPG companies, e-commerce platforms and retailers, to name but a few of the segments affected – need to reassess how they cater to these changes in consumer behavior.

What we learned in 2020 from talking to our customers, colleagues and peers, was that:

• End-consumer habits have changed, due to different motivations and requirements.
• CPG companies need to develop a comprehensive plan to address the shift in consumer behavior to protect top-line revenues.
• E-commerce companies need to up their game to be more consumer-centric and customer experience focused.
  

What were the CPG product and packaging challenges? 

It’s no surprise that COVID-19 has had a drastic impact on the work landscape, just how many of these changes will remain for the foreseeable future is yet to be seen.

But if there is one change that will remain after the recovery it’s remote working. With companies such as Facebook, Google and Amazon leading the way by allowing their workforce to work remotely, there will no doubt be others who will follow their lead.

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Working from home

Working remotely during the pandemic has not been easy for everybody, but for some it has been a time to relish. Swapping your office for what has become the new “Zoom room”, has had major consequences on how we live our lives.

What was once a home, a place of refuge from the rigors of daily work life, has been recast as a workplace, gym, restaurant, venue for impromptu Broadway shows, a place of worship and coffee shop, all rolled into one.

With such drastic changes to our daily routine, combined with the pandemic restrictions, there has been an explosion in the use of digital services – from online shopping to entertainment to the omnipresent Zoom video call.

Such an unprecedented shift to in-home activities has also meant that as end consumers we have adapted our shopping and consumption habits.

Shopping and consumption

CPG companies have seen a reduction in shopping frequency and a drop in the overall basket size as consumers adopt a thriftier spending pattern. The pandemic, the effects of self-isolation and the consequences of economic uncertainty have all had an impact on the way consumers behave.

Customers have prioritized on buying the essentials, such as groceries and household supplies and cut back on luxury items during this period of uncertainty. There has also been a discernible shift by consumers from household-name brands to private label products, switching also choice of retailers, to curb spending and as a result of breakdowns in the supply chain.

Trying out new brands or stores has important implications for retailers and CPG companies. At this point in time, it’s difficult to assess if these are temporary changes or that customers will stick with their new choices.

The pressure on CPG performance

Product and packaging innovation helps CPG’s win shelf space, boost customer satisfaction and capture sales growth. And in the wake of the pandemic, CPGs need this moment of transition, to realign and reassess their product portfolios. Looking at ways to capture the changing consumer demands.

An impactful way to re-imagine “value for money” for a price conscious audience or convey “premium quality” for a more discerning crowd is through CPG product packaging. A change in packaging can re-position a brand and support new features such as hygiene or enhanced ergonomic comfort.

Renovating or refreshing a CPG product packaging can benefit the consumer and the CPG. Upgrading for example to a recyclable paper handle for a bag-in-a-box wine container:

• Reinforces sustainability credibility by replacing plastic with paper.
• Reduces the amount of packaging materials needed as voids are not needed for a protruding handle to sit in.
• With no voids, hygiene and product integrity can be secured.
• Makes for an impactful display on the shelf.
• Makes logistics in the supply chain easier, without extruding handles to manage, pallets easier to stack and transport, etc.
• Improves the overall customer experience through better ergonomics.
• Offers a point of brand differentiation in a crowded marketplace

One of the most critical changes in consumer behavior has been the demand for products in various sizes, from the very small to the very large. Packaging needs to recognize these different consumer needs, especially for heavier / bulkier shopping items.

CPG companies are looking to tap into consumer pressure on sustainability, which the choice of sustainable packaging materials can reinforce. Using high quality materials in packaging promotes product durability and extends potential shelf life.

There has been a noticeable shift by consumers to shop closer to home and be more mindful, making buying choices on the basis of sustainability.

CPG companies realize that they do need to be more innovative with their packaging to stand-out against competitors, address pressure from retailers and the growing e-commerce forces.

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E-commerce and CPG packaging

Fast-growing niche markets such as e-commerce require an alternative approach to packaging and delivery.

Just as CPG companies are looking for less product returns, happy and satisfied customers, and an overall positive brand experience – the e-commerce players also need to compete on service, not just price to win customers.

To accelerate their efforts to grow market share, e-commerce retailers are reinventing the customer experience by providing easy-to-handle, e-commerce-specific packaging.

A shift to paper handles on bulkier items has been based on positive customer research and user experience feedback.

Subscription services

Subscription e-commerce continues to go from strength to strength.  Driven by brands such as The Gentlemen’s Box, leading the way for this fast-growing e-commerce segment.

Signing up to subscription services offers subscribers access to curated collections with exclusive deals and offers. However, this e-commerce segment is particularly prone to subscriber churn. So, many brands really try to focus not just on their products, but also the customer experience to develop positive word-of-mouth recommendations.

Many players in this segment see packaging as a way to stand out (think of the number of un-boxing videos on YouTube) but also because it reinforces a great end-to-end experience.

With a target audience known to be fickle when it comes to assessing a brands performance, packaging can make all the difference between churn or a devoted follower.

The new wants and needs of consumers for CPG products and packaging

The COVID-19 pandemic has directly impacted the hierarchy of  consumer needs, shaking up the buying habits to get food, drink and other essential supplies. The end consumer priority now is to remain healthy, to live within their means and achieve a balance with their new work / life bubble.

As a result of the restrictions on dining out, grocery purchases have increased and so to the demands made on product packaging. Because consumers are shopping less frequently, there has been a demand for CPG products and packaging to be available in larger volumes and weights.

CPG product owners have needed to strike the right balance between meeting the needs for bulkier product packaging and the ergonomics of customers carrying the items home and workers filling shelves.

Persson Innovation – CPG packaging, a global company with strong local roots

Today, our dedicated team at Persson Innovation are responsible for everything from production and development to ensuring all employees focus on keeping sustainability at the core of our business.

Persson’s extensive global experience puts us in a strong position to refine and develop our sustainable paper handles. We without fail meet the demands of millions of end-customers all around the world as they carry products using our handles.

We offer alternative materials to plastic and  provide packaging concepts that are well regarded by the CPG supply chain. Focusing on high quality materials and production values.

Read more our Persson products.

Personal thoughts

When I look back at my 20+ years in the packaging business, the one thing that has always struct me about those in the packaging community, is how disruption has been the fuel for innovation.

We have faced many times over these years what seems like insurmountable obstacles, that from what I have seen coax the best from my peers, colleagues and network.

The pandemic has taught us many things, one of which is that we need to take care of those around us, those less fortunate and those that sometimes struggle to convey what they need or want – especially when they are not sure what the problem is, or how to ask for help.

So, what I have learned is to listen rather than tell, to smile rather than frown, and you never know, maybe Broadway is looking for the next “big thing” from Minnesota.

At Persson our product focus is always to ask how we can make the end-consumer’s life easier, listen to our customer’s needs to make sure we keep them happy and satisfied.

Let me know if you to want to discover the impact packaging really has on your organization’s bottom line. Book a no obligation call with me and the sales team at Persson to help you realize and protect your profit margins as we head into a new year.

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Author: Nancy Woodrich. Director of Sales, North America