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Ecommerce/Supply Chain

3 Holiday Trends and the Gift of Packaging

Photo credit: trahko – adobe.stock.com Package-opened-AdobeStock_129610648-ftd.jpeg
Expected growth in ecommerce shipping, plant automation, and sustainability puts packaging squarely in the spotlight during this season’s festivities. An ecommerce and supply chain expert shares packaging tips for success.

Every holiday season presents a scramble of activities. With consumers seeking to entertain and provide gifts for family and friends, demand is at a yearly all-time high and brand teams are busier than ever working to meet that demand.

This holiday season in particular — with the COVID-19 pandemic continuing to impact lives across the country —presents unique challenges. Packaging solutions that are flexible, scalable, easy to implement, and sustainable are increasingly important.

Specifically, here are three trends we are seeing and some packaging tips to ensure success:

 

1. From candles to cookware, diffusers to dishware, ecommerce will continue to rise.

Ecommerce had been seeing a steady rise prior to COVID-19, with retail ecommerce sales taking a larger percentage of total retail sales in the US. Now, in the current and post-COVID environment, ecommerce sales are expected to garner a greater share of total retail sales globally, as consumers increasingly look to more convenient, socially distanced, online shopping.

Deloitte forecasts that ecommerce sales will grow by 25% to 35% year-over-year during the 2020/2021 holiday season. In total, ecommerce holiday sales are expected to generate between $182 and $196 billion.

As retailers prepare to address this demand, as well as the continued shift in purchasing habits, secondary packaging will be increasingly important.  Americans will not only be purchasing gifts online but will also be shipping gifts directly to family and friends, many of whom they may not be seeing in person due to travel restrictions and coronavirus precautions.  

In the ecommerce business, an optimal unboxing experience is key. Surprising your customers with their purchased items packaged like real gifts represents your brand values and positioning, and your consumers will feel highly valued more and likely to turn into loyal customers in return.

Retailers should also be prepared to anticipate the types of gifts likely to be popular this year. We expect home gifts to take center stage as Americans are spending more time at home. Candles, dishware, and décor all top numerous lists of 2020’s expected hot holiday gifts — all highly breakable items that should be wrapped carefully.

While bubble wrap has long claimed center stage in holiday gift unwrappings, retailers should consider switching to a more sustainable and aesthetically appealing paper solution. Although there may be some disappointed children missing out on the satisfaction of popping plastic wrap, a sustainable, biodegradable, and recyclable alternative to traditional bubble wrap not only improves brand reputation as a more sustainable company, but it also offers an outstanding in-the-box presentation and unpacking experience.

 

2. Automation will continue to enhance, but not replace, labor.

A recent study by Forrester stated that automation may be key for many businesses looking to survive the coronavirus recession. What’s more, a report by Ernst and Young from March found that 41% of managers in 45 countries were investing in accelerating automation as they prepare for a post-coronavirus world.

In times of increased holiday demand, coupled with the economic effects of COVID-19, speed and efficiency will be key, as more and more companies enter or bolster their presence in the ecommerce space.

Automation that enhances, not replaces, labor can serve a multitude of benefits. Automation tools can help you analyze and improve consumables costs, reduce waste, quickly adjust for seasonal volume peaks, and optimize freight among other contributors to overall costs and usage.

Automation can also ultimately reduce warehouse space. Since the pandemic, there has been a scramble amongst retailers to either upgrade warehouses or do more with the same amount of space. The packaging process needs to be increasingly quick, ergonomic, and cost efficient, as warehouse space is becoming rarer and more expensive.

Finally, using automated tools and processes can also help companies do more with less, ultimately creating a better environment for workers. Since COVID 19, there’s been a surge in warehouse worker demand coupled with a skills gap, which Deloitte and The Manufacturing Institute estimate could leave almost 2.5 million manufacturing jobs unfilled between 2018 and 2028. Automation is critical to companies seeking fewer, but more engaged and motivated packagers — people who are there to make sure their machines are giving optimum results.

 

3. Companies will increasingly ditch plastic, heeding consumer calls for greater sustainability.

According to Nielsen, the US sustainability market is projected to reach $150 billion in sales by 2021. Additional research shows that 66% of global consumers say they’re willing to pay more for sustainable goods and 84% of consumers seek out responsible products wherever possible.

A truly sustainable product also comes in sustainable packaging, and there is still immense untapped opportunity to use more recyclable materials. In the United States, plastic packaging alone accounts for 47% of the estimated 6.3 billion metric tons of plastic waste generated from 1950 to 2015, of which only about 9% was recycled and 12% incinerated, with 79% left to occupy landfills or pollute the natural environment for hundreds of years.

Paper packaging, on the other hand, is one of the most sustainable products. Made from renewable resources, it is biodegradable, and easily cycled back or used for renewable energy.

Paper is also good for the bottom line, as it outperforms many in-the-box product protection alternatives, especially when considering indirect costs such as handling and storage, employee safety, machine downtime, and facility cleanup.

 

While these trends will be particularly prevalent during the holiday season, they also represent long-term shifts for the packaging industry. Companies that adjust now will be better prepared for long-term success in 2021 and beyond.

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