Covid-19 has accelerated the adoption of ecommerce at an incredible rate. Although sales through major supermarket chains had been moving in this direction for some time, the coronavirus outbreak has catalysed a step-change in the move towards online shopping.
It also poses a sustainability challenge. Ecommerce typically uses more packaging than traditional retail, though consumers increasingly expect online retailers and brands to use sustainable options. So how will brands adapt to the demands of the e-basket and what does it mean for the packaging industry?
This article is based on an entry in The Chemical Reaction, a monthly blog from our global chemicals team. Fill in the form for a complimentary copy of the latest edition in full.
Packaging design priorities will shift
Lockdown measures have seen consumer interest in online shopping spike; a major challenge for brands is how to market and adapt to the e-basket rather than vying for the prized position within supermarket shelves. As more consumers shift to online shopping, and the economic fallout begins to bite, retailers are likely to look at reducing costs by re-evaluating physical shelving requirements and marketing spend.
In many ways, ecommerce presents a simpler marketing opportunity with less focus on eye-catching packaging design, and a greater onus on the brand messaging. As such, future packaging design may transition towards a simpler approach, focused on sustainability goals – lower environmental impact, less waste and minimum carbon footprint.
We’re already seeing it in action. In August 2020, Evian introduced a label-free 100% RPET bottle, replacing the label with embossed text. The design priority was to reduce plastic waste and make recycling easier, rather than being designed to visually appeal to the passing consumer in traditional physical retail premises.
Direct-to-consumer platforms are evolving
Some global brands are even trying to cut out the middleman entirely and sell directly to consumers. For instance, PepsiCo has launched two new websites allowing consumers to buy both bundle packs of PepsiCo products, or individual snacks. This approach may help to drive product sales and boost overall packaging demand.
However, not all direct-to-consumer channels are packaging-friendly. With increased at-home consumption set to remain for some time, brands are looking to market other solutions. Looking again to PepsiCo as an example, following its acquisition of SodaStream in 2018, the company is positioned to cut out the need for plastic bottles. Instead, it allows consumers to purchase concentrates that can be used on devices, at a marginally cheaper price than pre-bottled products. SodaStream may form part of PepsiCo's future direct-to-consumer offerings in combination with a focus on strengthening its ecommerce business.
There is a threat to brands’ sustainability targets – but it’s not insurmountable
Ecommerce typically uses more packaging, but consumers increasingly expect online retailers and brands to use sustainable packaging options.
Many online retailers have sought for years to reduce packaging waste and move towards sustainable options, particularly for the secondary postal packaging. The challenge for newcomers to the market, especially grocery stores, is to balance a stated desire to reduce plastic packaging with the requirement for safe and low-cost solutions for delivering fresh produce, fish and meats to customers’ doors.
Outside of grocery, online retail distributers are challenged by the lack of transparency and accountability from product manufacturers. For example, packaging for electronic goods rarely comes under the same level of scrutiny as water bottles – something of a symbol of the war on plastic.
Many global brands are attempting to pivot the sustainability messaging away from plastics towards a wider agenda focusing on overall carbon footprint. These companies may benefit from a shift to ecommerce, despite their increased plastic packaging demand. Early analysis shows that the carbon footprint from ecommerce has the potential to be up to 50% less than traditional retail thanks to greater order consolidation and network optimisation.
Overall, a shift to ecommerce should not be viewed as a set-back for sustainability goals but an opportunity to also advance nascent initiatives, particularly around collection. For example, a larger ecommerce market could become an ideal platform to integrate collection and recycling initiatives, such as Terracycle’s Loop project.
Ecommerce is a sustainability opportunity
To conclude, we see three key themes in our outlook for ecommerce and sustainability.
- A shift to ecommerce shouldn’t be viewed as a setback for sustainability goals. Increased ecommerce spending is likely to increase demand for plastic packaging but may provide opportunities to improve sustainability and boost collection rates.
- Beverage packaging design is likely to become simpler, label-less, colourless and more easily recyclable. However, niche bottle-less solutions are likely to remain a novelty.
- Despite recent innovations within the direct-to-consumer space by individual brand owners, consumers are likely to continue to prefer a traditional one-stop-shop approach to grocery and retail shopping.
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This article is based on an entry in The Chemical Reaction, a monthly blog from our global chemicals team. Fill in the form at the top of this page for a complimentary copy of the latest edition in full, which includes:
- Impact of the upcoming EU non-recyclable plastic packaging tax on flexible packaging
- Nova Chemicals sells expandable polystyrene (EPS) business to Alpek
- China’s polyester chain faces challenges during golden season this year
- And more.