Keeping Up with E-commerce Expansion
By Tom Egan
As consumers demand greater convenience, e-commerce sales continue to rise. According to the 2019 Internet Retailer Top 1000 Report, consumers spent $517.36 billion online with U.S. merchants in 2018, up from $449.88 billion spent the year prior. Even when the final sales takes place in a store rather than online, the first step to most purchase decisions starts at the search bar.
As e-commerce platforms continue to grow, brands face the prospect of SKU proliferation and the challenges of ensuring products reach consumers in excellent condition. As manufacturers and brand owners take on increasingly complex supply chains with fast-changing needs and opportunities, it is critical for them to understand and equip themselves with the right solutions to remain competitive.
Different Solutions for Different Channels
Whether companies sell to consumers through their own online channels or through third parties, flexibility is critical to meet market shifts. Without the right tools and infrastructure to enable faster changeovers, diverse batch runs, and fluctuating volumes, brands may not be adequately prepared to meet product demand surges in a less predictable marketplace. This means investing in solutions like digital printing presses that can handle changeover and small volume needs—or automated packaging equipment that handles different package formats, sizes, and shapes.
Additionally, companies are updating packaging to better suit e-commerce needs, sometimes offering two iterations of a product’s package: one for store shelves and another for e-commerce. This dual approach to package design is evidence that traditional retail is still very much alive despite the growth and change that e-commerce has brought. In fact, according to the TimeTrade 2017 State of Retail survey report, more than 70 percent of consumers say they prefer to shop in a brick-and-mortar store compared to an online retailer. This attitude drives brands to consider adopting omnichannel distribution and, rather than creating variations of packaging for the same product, commit to one package design that meets all their needs from shelf appeal to lightweighting.
Combatting Counterfeiters and Challenging Environments
While e-commerce affords consumers a convenient purchase experience and provides brands the opportunity to reach target geographies far and wide, it also creates vulnerabilities to counterfeiting—especially when retailing through third-party channels. When consumers receive a knock-off instead of the true product, disparities in quality, performance, or even product safety are detrimental to brand integrity.
To mitigate counterfeiting, brands maintain authenticity by implementing overt security features into their packaging. For example, companies have begun to include tamper-evident labels that allow consumers to distinguish the true product from an imitation. This includes the use of hologram films to create packaging that can differentiate a product at the point of sale. Additionally, manufacturers can include visual effects to the hologram such as emerging images, microletters, or other microscopic symbols. Consumers can discern the true product from the imitation by inspecting the label for distinctive marks that were imbedded by the original equipment manufacturer. Brands can also alter the product beyond the label by incorporating symbols onto the product.
In e-commerce, shipping product through challenging environments—where the brands have little control—can result in damaged products as well as displeased consumers. When selecting materials and containers, it is crucial to account for durability in the face of tough conditions such as friction or impact from other loose goods contained in the same package, moisture, fluctuating temperatures, and even vibration. Increasingly, companies have utilized both rigid and flexible plastic packaging to better protect their products. This is because plastic packaging is durable enough to prevent product damage without the risk of breakage that comes with glass.
These issues must be carefully considered to ensure the authenticity and safety of the foods contained within the packages. E-commerce presents some challenges, but the industry is well positioned to overcome them.
Tom Egan is vice president, industry services, at PMMI.