With the growing competition in the eCommerce market and high customer expectations, it has become imperative for brands to provide a seamless shopping experience across channels. Brands are adopting the omnichannel retail approach to offer a consistent shopping experience to the customers irrespective of the channel of purchase.
One of the many effective methods applied by modern D2C brands to offer an omnichannel buying experience is product packaging. One could also argue that efficient product packaging is not just an experience-enhancing option but a necessity to maintain brand rep.
If you are incorporating an omnichannel approach into your marketing and sales strategy and still missing the customer satisfaction mark, this article is for you. However, if you are still unaware of the concept and benefits of an omnichannel retail approach, we will quickly walk you through it.
What is an Omnichannel Retail Approach?
The omnichannel retail approach ensures that customers have a consistent shopping experience whether they are buying from a physical store or shopping online through any of your sales channels using their mobile, laptop, or via Voice Commerce devices like Amazon Alexa, Google Home, etc.
So, what differentiates the omnichannel approach from the multi-channel selling approach? The former connects all sales channels seamlessly and focuses on the customer experience in its entirety across multiple channels.
Now, a lot of brands are inclining and even successfully implementing an omnichannel strategy for their products, some are taking it a step further to provide an incredible customer experience.
Target integrated Pinterest’s Lens into their app to offer customers a quick method for shopping.
Customers can click photos of items that they like and the Target app will show them similar items available for purchase. Teaming up with a social media platform, they are enabling users to select products from any available channel that ultimately encourages them to order online.
How does this help? Whenever a customer sees something they want to buy, they can easily identify if Target sells that product and order it right away. This saves a lot of time in searching for the right product and not to mention, the entire process is so seamless. This strategy has helped Target increase its sales by almost 10% right away.
Why is packaging important for omnichannel retail?
Put simply, your product packaging is at the center of the customer’s attention. Your package’s design and utility go a long way in displaying customer-centricity in business decisions and creating a good omnichannel brand experience.
Here we have listed the major reasons for packaging importance in omnichannel retail.
1. Creates Brand Identity
For all businesses, irrespective of their size or market segment they cater to, creating a distinct brand identity is important for maintaining strong long-term relationships with customers.
The right packaging can help you pave your own way in the market by creating a unique brand image.
Right product packaging ensures:
- It is unique and fits product requirements
- Customers believe that the product is packaged specially for them
- Does the job of last salesmen
By getting their product packaging right many brands have created a strong brand identity and encouraged people to buy. One such example is Sony Walkman’s product packaging.
Sony Walkman claims that their product is waterproof, and to make people believe in this they packed their product in water.
Another interesting example is Thelma’s product packaging.
Thelma, a warm cookie delivery company, designed their product packaging having a stove image as a part of global branding strategy. This helped the company create customer perception that they sell “warm cookies”.
2. Influences Purchase Decision
As mentioned earlier, the right product packaging does the job of a salesman and stimulates purchase decisions.
- Product information displayed on packages prompts customer purchase
- Increases customer retention, hence the likelihood of repeat purchases
- Modern customers make conscious environment-friendly purchases. Showcasing that your product packaging is recyclable can influence the final purchase decision.
Selling young girl’s clothing for special occasions British eCommerce brand, Monday’s Child has a very interesting packaging style that is fully recyclable and sustainable.
The packaging box apart from a shipping solution constitutes a toy on its own. It can be used as a dollhouse by its target audience. This not only extends life of packaging, but also provides customers with more value for money.
One more interesting example is of UK -based sportswear brand Origin X Performance
Their products are shipped in completely sustainable branded mailing bags or custom jiffy bags.
3. Improve Supply Chain Efficiency
Broadly speaking, your product packaging strongly influences the efficiency of your supply chain, in turn, affecting the company’s overall growth.
How does product packaging influence the supply chain?
Effective product packaging reveals the current inventory of products and helps warehouse staff easily identify damaged or expiry products before the packets leave the warehouse. This improves warehouse efficiency and drives organizational growth.
4. Optimize Shipping Cost
Optimized packaging can help you maintain consistent brand performance across channels and ensure you ship products at a minimal cost.
Many logistics partners claim that the shipping cost levied by them will be different if the products are packaged differently.
Besides this, packaging if not done correctly, can lead to damaged shipping and order returns, an extra cost that you have to pay off.
A classic example of optimized packaging helping in cost reduction is DHL.
The company implemented a carton set optimization technique to reduce costs and save approximately 5-7% on annual shipping costs. This technique helps operation managers determine the multiple container sizes they should have and in what quantity.
The practice of carton set optimization has become increasingly important, as carriers charge shippers based on dimensional weight, according to the paper.
Here’s a graph that explains to you how carton utilization has helped companies across sectors save money.
5. Improves Product Rating
Improving your product’s design and ensuring that correct packaging sizes are used to ship your products go a long way in improving product ratings. With the rise in green consumerism, customers prefer buying from brands that do not “over-pack” their products leading to material wastage.
How does improved product rating help?
- eCommerce platforms like Amazon sort products based on the rating given to them
- A high product rating increases product visibility, eventually boosting sales.
Omnichannel Packaging Strategy
In alignment with omnichannel retail, an omnichannel packaging strategy focuses on delivering the same performance on the shelf, online, and throughout the supply chain.
The primary reasons for shifting to this approach are:
- Offering uniformed customer experience
- Brand consistency
- Operational efficiency
Here’s how you can implement omnichannel packaging and enjoy the perks it offers:
Store fulfillment and Shipping
Instead of shipping orders from a distant warehouse, you can ship them directly from your retail store. Your packaging should be the same for both offline and online orders. This is the first step towards offering consistent omnichannel packaging.
Additionally, ship-from-store ensures:
- Lower shipping costs
- Turns over store inventory faster
- Reduces markdowns
As discussed earlier, it is also imperative to ensure that the right product boxes are used to ship products. You do not want to ship a small product like a USB memory stick in a shoe-box-sized package. This not only is a material wastage but puts a negative customer perception, hence affecting sales.
To prevent product damage or theft, many products have strong secondary packaging, however, this makes it difficult to open the packaging and use the product.
An unpleasant unboxing experience can eventually affect future sales. To avoid this, many brands are now actively focusing on providing a pleasant “unboxing experience”. The added benefit of this is UGC since many customers post unboxing videos on their social media channels.
Apple has championed product unboxing long back before it became a trend. Their product packaging was high quality, fun to open and there was always a sense of excitement around it.
Sheyn, a Vienna-based jewelry design studio uses a kraft mailer box (made up of 80% recycled material) for product packaging. This takes their unique product design onto their packaging also, and in turn, elevates the customer experience by providing them a memorable unboxing experience.
Omnichannel Packaging should be Sustainable
With the rise in green consumerism, brands are opting for more eco-friendly and sustainable methods of doing business. Sustainable packaging is one aspect of the business that is becoming increasingly popular.
One perfect example of sustainable packaging is Terracycle’s “Loop” concept. This concept enables customers to receive their products in durable, reusing packaging. By creating a circular reusable packaging model they have created a “Loop” on eCommerce packaging.
Repack, a Finnish-based company, enables brands to sell products in resistant bags that can be used several times. They also offer return service via regular mailboxes.
Engaging Product Packaging
As discussed earlier, product packaging strongly influences buying decisions. Now, while designing these engaging product packaging for omnichannel businesses it is important to balance out product safety, function, aesthetics, and sustainability. Your product packaging should be able to communicate the product benefits or utility and needs to have a great design that requires minimal packaging material requirements to reduce waste.
While creating omnichannel packaging, brands need to ensure that the packaging is as simple as possible. Why?
In most cases, manufacturers have no influence on the retail channel. Retailers sell products both online and offline, along with resellers and major platforms in between the brand and customer. Therefore, for easy distribution, the packaging needs to be simple and flexible.
So, that’s a wrap on the importance of packaging in omnichannel retail and how you can go about implementing the best strategies for improved customer experience. However, there’s a lot to packaging than just this. A lot of brands that have recently started out on digital commerce can’t implement an omnichannel strategy right away. They need to come up with ideas and experiments to keep their customer base intact and acquire new ones. And, that’s when channel-specific packaging comes into play.
Let’s take a look at that.
Omnichannel Packaging Vs Channel-Specific Packaging: Which One Should You Prefer?
A lot of brands are struggling with a dilemma: whether to optimize their packaging and keep the experience consistent for all channels or experiment at a channel level. Some brands are creating specific packaging formats based on the type of channel they are serving, delivering different and more customized experiences. Others prefer a unified packing design that works in both online and offline capacity and maximizes efficiencies across the supply chain.
There is no right approach to address this dilemma. As a growing brand, you have to gauge the potential of your ideas and efforts based on your own and not based on what works for others.
Here, we have explained the difference between channel-specific and omnichannel packaging and how the former has worked for some brands. It might not necessarily work for your brand but you can always take some inspiration and be experimental.
In the channel-specific packaging approach, brands create specific packaging for each channel to deliver different and customized experiences.
One key advantage of this approach is faster experimentation. eCommerce is the ideal testing ground for product development, thanks to the short-run printing technology.
Short-run printing technologies like digital and offset printing enable pre-launch testing and reduce the speed to market from 2 years to 3-6 months.
A real-life example of a brand using the channel-specific strategy for experimentation is “Mars”. Using this strategy, the brand identifies customer demands and makes improvements in their product packaging before stocking products in physical retail outlets.
Another advantage of this approach is streamlined supply chain management and sustainable packaging. Here’s how.
eCommerce packaging requirements differ from brick-n-mortar stores packaging. The glass and aluminum can packaging can be replaced with flexible environmental-friendly pouches and boxes for eCommerce shipments. This reduces the need for extra protective wrapping, thereby cutting costs significantly. Channel-specific packaging allows brands to have different packaging shapes and sizes that are optimized for shipping efficiency and in-home use versus shelf presence.
Recycling-ready primary containers minimize excess packaging, improve recycling rates and reduce overall waste.
Many prominent brands like Hello Fresh and Goby have successfully implemented channel-specific packaging strategies. Besides this, Procter & Gamble also launched a Tide laundry detergent version only for eCommerce, swapping their 96-load PET jug for a lighter weight bag-in-box.
The packaging for the eCommerce-exclusive product uses around 60% less plastic and is also 4 pounds lighter than bottle versions sold at the retail stores.
Another product category where package designers can significantly reduce eCommerce packaging material cost without risking product damage is computer hardware. Approximately, 80% of hardware products are sold online and do not require package crating.
Besides this, rise of ready-to-ship packaging in consumer staples like diaper eliminates the requirement of secondary packaging. This reduces both packaging and warehouse costs.
Now, back to our conundrum, omnichannel or channel-specific packaging?
We will keep it simple. Consider omnichannel packaging if:
- Your brand deals with high volumes (both offline as well as online)
- Brand consistency across all channels is a requirement
- You can implement smart packaging to make omnichannel packaging more eCommerce friendly.
Consider channel-specific packaging if:
- Disruption from competing brands and new businesses in your niche market is high
- You need to experiment and capture growth quickly
- Customizing packaging to the specific needs of each channel would benefit your consumers, i.e. eCommerce packaging that reduces breakage or leaks and comes in post-box-friendly sizes.
We have discussed all your packaging options here and leave it to you to pick an approach that works for your business and goes with an omnichannel strategy. We will take up channel-specific packaging and its benefits in our upcoming article.