Apart from established players, local retailers are also reinventing themselves, writes GAURAV JALAN, Founder, Packman Packaging
Packaging plays an essential role in consumer experience in establishing and enhancing brand and overall buying experience. Packaging which has four main functions -containment, protection, communication, and utility— also helps maximize sales and profits while keeping losses and wastages under check. In brick-and-mortar commerce, packaging was mainly utilized to make a distinction and enhance shelf presence through appealing and simple-to-spot colors, shapes, and graphics. When a product gets damaged the buyer can keep it aside and chose a new one, with no loss to the customer. In the e-commerce world, however, the impact of a damaged product is quite different and can be disastrous for the business. A consumer who makes a buying decision at the single click of a button has no means to know if the product is intact or not. The wait time for reverse pick-up and replacement of the damaged product could potentially damage the online seller’s reputation. Moreover, as eMarketer says, as many as 83% of consumers who get a defective or unsatisfactory item do not repeat their orders. With the social media tools at his or her command, the e-retailer's reputation could also be at stake.
Having understood the effect of their packaging decisions, businesses are now investing to boost e-commerce packaging to meet buyer expectations and make a positive impact on their purchasing decisions and perceptions that can boost the satisfied-customer list.
India’s e-commerce has been witnessing significant growth over the last decade or so and is estimated to grow to US$ 200 billion by the year 2026 from US$ 38.5 billion that was in 2017. This growth is possibly propelled by a boost in internet and smartphone penetration and the digital revolution sweeping the country. After an initial hiccup during the lockdown, e-commerce bounced back with an overall 130% jump over the pre-COVID period.
In fact, From June 2021 onwards, the sector has witnessed a huge surge with events such as End of Reason Sale, Independence Day Sale, and Prime Day Sales. Actually, recently, Walmart declared that Flipkart’s GMV has outdone the pre-COVID 19 levels.
Another driving force for this trend is the emergence of first-time businesses and the digital-first approach. Social distancing also led to a huge growth of first-time online shoppers. While India’s big 5 metropolitan cities continue to be on the top of the e-commerce sector, Tier II & III cities have quickly joined the elite race. Online platforms such as Amazon and Flipkart have gone a step ahead in assisting this growth in small towns by providing regional language content to facilitate quick decision-making with ease.
The post-lockdown data suggests a systemic shift in buyers' preferences for online.
Local retailers are also digitizing and reinventing themselves by offering the home-delivery option with online orders so as to retain their customer base in the face of stiff competition from e-commerce giants.
In a post-pandemic era, it is not certain if customers go back to the brick-and-mortar mode or continue with the ease, comfort, and discounts of online sales. Nonetheless, not all online business is likely to revert to physical visits to shops.
Another factor to note is the dramatic rise in awareness of a hygienic lifestyle is bound to continue to push online sales. During the pandemic, the demand for packaging for groceries, healthcare items, and e-commerce transportation has grown exponentially.
Food packaging, for instance, is undergoing a tectonic change. At around 45%, food processing is the biggest consumer of packaging. Rising demand from these end-user segments augurs well for the packaging industry.
Demand from the grocery and dairy product segments has as a result fueled the demand for vacuum packaging, trays, and protective films. And food safety became even a major issue. Now food products not only have to be fresh but also pathogen-free. And this is where the packaging industry can contribute to that faith. Packaging can play a pivotal role by providing all the mandatory details printed on food packaging boxes and packets authenticity and ingredients. Tamper-resistant packaging further lends a boon to food businesses. Packaging technology plays a major role in this context.
As regards plastic, one good option is the reuse-refill revolution. Reusable containers such as handwash with refill packs are gaining momentum. Also, there is an option for businesses to pick up empty containers and refill them. Remember the old system of the shopkeepers collecting deposits for glass bottles or water jars? This can come in handy for promoting recyclable or re-usable plastic to promote sustainability.