The packaging industry is going through a transformation in the 2020s toward goals in achieving greater efficiency. At the core of this transformation is an emphasis on technology and systems that save time and money. Here are five important trends in packaging that are expected to have long-term impact on consumers.
1. Sustainable Packaging
A recurring packaging trend that doesn't appear to be going away is emphasis on sustainability. Consumers are steadily becoming more aware of how mass production leads to packaging waste. Many people want to play a role in reducing waste through various eco-friendly methods such as greener materials, recycling and reusable packaging. Manufacturers have sought to improve the substrate of packaging with more flexible corrugated paper designs.
Leading the sustainability movement in packaging is metal from tinplate to aluminum. These materials provide long-term air-tight protection to foods and other perishable items. Durability and safety are two of the most important issues surrounding sustainability.
According to Matthew Seidner, a packaging expert who works for business consulting firm McKinsey, the perfect substrate for packaging has yet to be found. In the meantime, metal packaging is both eco-friendly and cost-effective considering the protection it provides compared with other common packaging materials.
Another aspect to sustainability as it pertains to packaging involves sourcing materials that do not produce harmful effects on human health or the environment. Designers should not overlook recycled aluminum as a viable eco-friendly substrate that can be shaped in numerous ways. Aluminum will survive the current wave of abandoning certain packaging materials in the path to sustainability.
2. Growing Adoption of IoT and Digitization
The use of Internet of Things (IoT) technology is fueling the steady adoption of digitization across many industries. Retail shops have invested in IoT-based apps that track customer data following a purchase. The fact that smart apps can correspond with digital print on packaging has set the stage for an interactive marketplace of closer connections between brands and customers.
One of the main reasons for manufacturers and retailers going more digital is to implement automated solutions. Providing online interactive tools for customers has helped brands move a step ahead of competitors that resist digital transformation. The use of IoT sensors interacting with quick response codes is contributing to a new digital ecosystem that identifies inefficiencies in products and packaging. The data generated from the sensors helps analysts refine processes including packaging.
The use of RFID tags has prepared many large brands for the digitization that has followed. Product packaging can now be embedded with codes that track the specific unit. It's reducing theft within supply chains and helping move items from warehouse to retail shelves faster. It's important to understand IoT is not just a tech fad, as it's part of an emerging digitally-connected ecosystem that encompasses many elements of sustainability.
Another advantage to digitization is that it can be used to lower production and packaging costs. The combination of machine learning software and access to broad sources of data helps producers and packaging designers learn quickly what options are available for more affordable packaging. Paper and board are among the most affordable packaging materials that also facilitate e-commerce and IoT solutions.
3. Maximizing E-commerce Opportunities
For over a decade now, e-commerce has become a significant mainstay element in the mass marketing of products. Advancements in e-commerce point to a more omnipresent marketplace for any given brand that allows consumers to purchase items online. The items are then shipped directly to buyers, who can monitor the delivery process on their smartphones. Brands are placing a growing focus on accelerating the last-mile delivery phase with the help of digital communication methods to ensure customer satisfaction.
The impact of e-commerce on product packaging has been subtle, as it has quietly raised the bar on packaging requirements. Part of the efficiency of e-commerce is that it provides an automated order flow that generates real-time customer data. Analysis of the data via machine learning programs can give more accurate counts for future inventory and shipping purposes than traditional forecasts.
The more warehouse managers improve inventory management, thanks to e-commerce data, the less waste there will be in supply chains. Many companies have figured out by now that e-commerce allows a business to expand to a 24/7 global sales model. Packaging products on an on-demand basis triggered by e-commerce orders is one of the various avenues firms are exploring to cut packaging waste.
4. Inflation Fighting with Strategic Category Management
Products that sell at a high turnover rate at a low cost are called fast moving consumer goods (FMCGs). These products can be highly profitable during economic booms but can lead to shrinking profit margins during periods of high inflation and budget tightening. The packaging of nondurable FMCGs can play a role in boosting profit margins if focus is placed on low-cost solutions that reduce waste.
Cutting costs on packaging allows the manufacturer to devote more of its budget toward digital marketing, which is closely associated with e-commerce. Online promotion is now a major driver of sales for a wide range of products, especially food items. Retailers can fight inflation in various ways, such as strategically categorizing products by niche market segments with appropriate packaging to increase sales.
Investing in Research & Development (R&D) is another key to beating inflation, as building a vast knowledge base on innovative design opens many possibilities to greater efficiency. One of the keys to a successful R&D program is to analyze current market participants and find out where consumer pain points exist. Brainstorming new ideas for more efficient packaging design needs to be part of this exploration.
5. Shifting Consumer Demands
The one-size-fits-all model of product packaging has largely fallen by the wayside the past few decades, thanks to the internet. Consumers have become fixated with online shopping since effortless clicks on a smartphone are free instead of paying for expensive gas to drive from store to store researching products. E-commerce has made shopping in general more convenient for consumers, who now expect other conveniences such as speedy delivery.
Consumer sentiments are always changing, although it's clear the internet is helping people find more of what they want faster than the traditional brick-and-mortar route. The conveniences the internet provides are reshaping consumer expectations and demands. A growing number of consumers want to establish personal relationships directly with brands.
More and more businesses are turning to personalization as a way to build closer and more emotional bonds with consumers. One of the keys to personalization is offering enough product diversity to meet the needs and tastes of different market segments. These segments can be categorized based on how much revenue they bring to a business. Both active and casual market segments can be distinguished by the degree to which consumers demand certain levels of quality.
Keeping up with the latest packaging trends is crucial for brands to stay competitive. Developments in digital technology are merging with packaging ideals to make deliveries more convenient for customers. The more brands focus on sustainability and stay on top of advancements in AI and IoT, the better they will position themselves for the future. Many consumers are now in the mode of choosing products to purchase based on packaging.
References and Further Reading
[ 1 ] Winning with new models in packaging (2023), by David Feber, Daniel Nordigården, and Shekhar Varanasi
[ 2 ] Five Packaging Megatrends & How to Address Them (2023), by packworld.com