7th Sep 2020
As Covid-19’s lockdown restrictions came into effect around the world, retailers were forced to close their doors, producing a sudden yet inevitable shift towards online shopping.
According to the Office for National Statistics (ONS), the proportion of online spend in the retail sector soared to 33% – the highest on record – in May 2020. Not only was there a new demand to buy everyday essentials online, consumers were also in search of products to make life at home more comfortable and interesting.
Increased consumer demand
Our Covid-19 research found that 52% of businesses experienced increases in online shopping as a result of coronavirus, with one in 10 stating the rise in ecommerce traffic had been transformational. This rise in online purchases led to a surge in demand for packaging suitable for products sold through ecommerce channels. This shift in consumer behaviour meant that many retailers had to adapt and evolve their packaging strategies to meet new demand and quickly.
With further unpredictability expected, and peak trading months ahead as the festive season fast approaches, planning for the change in buying trends and predicting the volume will be a challenge for retailers. For a successful season, it’s vital for retailers to scrutinise their ability to pivot operations, build more agile supply chains that can hold more stock to avoid shortages, and to cater for a new era of ecommerce customer.
Ecommerce packaging requirements
Products purchased online have different requirements to that of in-store packaging, which must be designed specifically for fulfilment, handling and distribution. For some retailers that have shifted to ecommerce sales, this has meant developing and sourcing an entirely new product in a very short space of time – such as one fashion retailer’s requirement for hygienic packaging for individual face masks.
While this quick implementation has allowed retailers to meet consumer demand and generate new revenue, it’s important they consider product packaging requirements for the longer term to ensure the right material is being used for the right application and to evaluate the credentials of each product.
Managing stock availability and production capacity
When asked how Covid-19 had affected their business, 45% of companies stated that it had a ‘big impact’, with nearly a quarter (24%) of companies saying the biggest challenge they faced was managing stock availability.
Research by Raconteur found that 39% of consumers said they had been encouraged to purchase products online that they had not considered before. With such unprecedented spikes in demand for current and new product lines, retailers were met with new challenges to manage stock availability particularly with overseas suppliers.
Premium lifestyle brand Joules has worked closely with suppliers to use existing stock where possible to manage availability. It has also been a priority to maintain an open dialogue with its suppliers to develop individual plans with each to navigate the challenges presented by Covid-19. While this means some new innovations have been delayed, it has allowed the retailer to maintain business continuity with suppliers to ensure they’re able to provide the products they need to meet the increased customer demand.
Re-thinking the supply chain
In our Future of Packaging report (released pre-Covid), 59% of companies stated that ‘cost’ would be the biggest influence on their packaging design and development in the next 10 years.
However, due to the disruption that Covid-19 has brought on global supply chains, companies have been forced to adapt quickly to consider locality of suppliers over cheaper, overseas operators.
While this is just one element, it demonstrates a positive step to a cost-neutral mindset that’s encouraging to see. If retailers can adopt a more cost-neutral approach to their packaging strategies, and in response to changing consumer behaviours, they can consider alternative materials that have greater sustainability benefits and ways of utilising these materials that won’t cost the earth.
To read this article in full, download your copy of the Future of Packaging Report here.