As more and more consumers embrace online shopping, packaging continues to play a pivotal role in the e-commerce experience. In a recent study conducted by Danaher’s Product Identification platform, of shoppers who had purchased food and beverage products online, 75% of them stated that they plan to purchase more snacks online and 63% of shoppers planned to purchase more health, beauty and personal care products online in the next 18 months. The continuity of brand and product across channels is increasingly important too, as 61% of shoppers expect the product packaging they see online to be the same as what they see in their local retailer, and 47% expect the product image online to exactly match the packaging that arrives on their doorstep. Even more shockingly, one-third of e-commerce shoppers return health and beauty products because of the packaging.
Online purchasing requires consumer packaged goods (CPG) companies to adapt quickly to growing consumer desires and with the cut-throat, competitive environment of e-commerce, retailers are battling it out to meet the consumer demand as efficiently and profitably as possible. With all of these rapidly shifting dynamics, the relationship between CPG and the retailer is changing. In my experience, the uncomfortable relationship between both the CPG and the retailer often stems from inconsistent data and untimely communication. When designing product packaging CPGs think: “Why can’t I give all of the retailers one set of data and they use it how they see fit?” While on the other hand, the retailer thinks: “Why can’t CPGs get me the correct product data quickly? I need to be able to differentiate the product so we can compete against other e-commerce sites.”
Often times the retailer would like to begin selling a product even before they have product inventory, and they can’t because they don’t have the data needed to promote the product. And what stalls CPGs from providing retailers quick and consistent data is the fact that they don’t have a single source of truth to pull the appropriate data and messaging from.
In my conversations with CPG brands, one problem arises repeatedly: A lot of companies want to believe they have some master system somewhere that has the “truth”, but the reality is that the data gets altered many times and cannot easily be found in a single database. The system of record for accurate product data is often embedded in the final released artwork file. Yes, the original packaging data is initially owned by a few master systems such as a SAP system, regulatory system, etc., but there’s no single central location that hosts all of this information – I’ve learned the actual consumer-readable truth is something that evolves over time within the package and label development process, the approval process, and the “ramp up” by marketing as the product gets closer to the shipping date. CPG companies have been relying on a significant amount of manual processes to make up for the lack of a centralized product information source.
But with the rise of e-commerce, the need for fast-acting data drives CPG companies to establish and invest in structured data houses to find data quickly, remove waste and inefficiencies in the process and provide the ability to tailor appropriate messaging for retailers.
Retailers also find that multiple product and lifestyle shots with tailored messaging increase lift. Product shots, nutrition, and ingredient data are good for some, but a shot of the product being used in the kitchen, on the sports field, on a hiking trip, etc. help the consumer imagine actually using/consuming the product and this consistently drives online purchase behavior. Custom messaging also help retailers differentiate themselves from their competitors.
To organize the development of this information, many CPGs now refer to both “on-pack data” and “off-pack data” when talking about product messaging during the packaging creation process. “On-pack” refers to the typical information seen on product packaging such as the ingredient, promotions, flavors etc. and “off-pack” data would include information on how to market the product in different retail environments, actual weight (as opposed to net weight), physical dimensions (for shelf planning) and literally hundreds of other pieces of data. Managing this data, with tightening budgets, an uptick in the number of SKUs and changing global regulations and demographics is a tremendous challenge, particularly when attempted with manual or antiquated systems.
CPGs that focus creating a single source of truth for their package data are able to quickly pull both “on and off-pack” out of a database to automate the placement of text onto the package and then automate accurate data delivery to e-commerce portals, with the ability to be custom the data for each retailer according to language and need. This approach meets the retailer’s desires for compelling e-commerce copy that entices online shoppers and has the potential to alleviate some of the dissonances between CPGs and retailers.
While some departments within CPG companies will argue that they already utilize databases, each department is only one part of the process. This means that the key to increasing data speed relies on creative upfront information and a unified, orchestrated workflow. If companies get it all in the right place the first time, it’s far easier to locate and share across departments, suppliers, and retailers. When everyone is connected to a packaging workflow of integrated technologies, the ecosystem collectively thrives, leading to better online shopping experiences for consumers and increased product sales for both e-commerce retailers and consumer goods companies.
This piece is a part of our 2019 Packaging Trends ebook. To read more trends in the book, click here.