The issue of what demands e commerce is putting on packaging suppliers was discussed at a roundtable at Luxepack Monaco 2019 (September 30-October 2) with some interesting observations about the industry.
Recyclable fibre based materials
The panelists included Raul Cervantes, category marketing manager, personal care and connected packs, Albéa Group, Igor Fromont, co-founder, Century Box Group folding cartons and Esa Torniainen, founder, business development director, Paptic, a technology start-up company focusing on replacement of plastics by renewable and recyclable fibre based materials.
Paptic was established in 2015 as a spin-off from VTT Technical Research Centre of Finland.
“We’ve been active in this field for 15 years but the demands and requests have changed dramatically in the last few years. In the beginning it was due to the way luxury products were sold online. High end brands were not keen to have their products sold on the internet and let the market more or less organize itself,” said Fromont.
“At that time the price of the product was the key selling point on the internet and the packaging was not that important. But more recently, all brands including luxury products realize the importance of the e commerce and online channel and have become more active in this field.
“There is a growing need to be able to present themselves online and control the associated distribution channels. Maybe it’s not the same for all brands for example, the Asian market is very advanced in this respect, but this trend means the packaging has to adapt to this new environment.
“Customers are looking for high quality packaging to convey the user experience at all levels.”
Cervantes of Albéa Group said packaging has to assist and the products have to be beautiful and convey all the values of the brand more than via normal distribution channels. He said they are being distributed as a single unit so the risks of security and safety are now higher.
Competition is fierce
Torniainen from Paptic added the competition now is fierce and the packaging and the packaging material is a good way for manufacturers to differentiate themselves.
“Our material feels different to anything else. When people notice the material they want to understand more about it and when they know it is sustainable it reflects well on the brand,” he said.
According to Fromont, the speed of assembly and delivery is very important but the order timeline and preparation can be effected by the packaging.
“There is a risk when shipping high value goods through logistic channels so we have to consider that when designing the packaging, by integrating security identity tags to check if it has been opened on the way to the customer. Anti-tampering features and protection of the item are very important today,” he said.
“We also have to consider the possibility of the return of the item as well. Not all packaging is designed with this in mind. Also theft in e commerce is becoming a huge problem.”
Cervantes said Albéa has joined Amazon’s Packaging Support and Supplier Network (APASS), which supports vendors in certifying their products under Amazon’s Frustration-Free Packaging Programs, to go one step further with traceability on connected packs.
“We realise demand is growing in the direction of very advanced packaging in terms of having a gift experience for the consumer and we realize we are getting into a situation where the sky is the limit,” added Fromont.
“Secondary packaging is more sophisticated online than in the traditional retail outlets and brands now want to have a strong link with the customer. Because there is user anonymity on the internet brands have to compensate for that and with the more luxury brands there is a personal handwritten note to the customer to show that it cares for the consumer.
“The anonymity behind a screen makes it difficult to otherwise convey this to the customer.
“Brands are investing heavily in all sorts of features to make sure there is a link between their customer and the brand and this something new that’s happened in the last five years and its growing.
“The internet is no longer a channel for cheap, discounted products as the price levels most brands offer is the same as in traditional retail outlets. It means companies save a significant part of their budget by selling online. We get more requests now for personalized gift packaging for a box with the name of the customer and this is possible with digital printing.
“Companies don’t have to pay the rent on expensive shops so the costs can be spread in this way. The brands are fighting for market share online.”
At Paptic Torniainen said if clients use ‘better serving materials’ in e commerce, building on the ‘box experience’, there will be less returns.
It has produced a material ‘that is silent’ when used, similar to textiles, but more expensive looking than paper and eco-friendly.
Fromont agrees and said the return rate is an important aspect which affects the profitability of the online channels.
“The best sustainable action is to reduce the number of returns, for example, most packaging today could be shipped in mailers rather than corrugated boxes or boxes,” said Torniainen.
Fromont added in addition to the gift box and outer packaging there is a strong request to find a ‘blocking solution’ within the industry for a product which is breakable or fragile.
“The easiest way is to put a lot of paper into the box which leads to a huge carton, which is not ideal logistically and we are developing blocking solutions to make sure we don’t use too much volume,” he said.
“We try to avoid plastic materials and use single material solutions such as an ‘inlace’ in the cardboard which offers protection. Also, we have developed specific materials like net systems, which can block the product and are interesting in terms of overall volume. Nets made out of elastic materials also the versatility of the blocking system means the brands have a variety or combination of products to ship.
“Putting different items together in the same box with clever systems, which take into consideration the product range. For brands we do offer custom or generic options.”
Cervantes said sustainability is everywhere right now and Albéa is focusing on packs that are more ‘persistent and lighter during transportation’ adding; ‘The weight is very important for us. And for the transport system’.
Fromont added, many companies want to go in the green direction but they don’t understand the lifecycle of the packaging so at Century Box it tries to help them understand what makes packaging sustainable.
“We have launched a packaging DNA databse using a scientific approach to give a score to a given package concept to compare it with another one. This allows us to offer improvements on the packaging and puts us in close contact with the customer to change it into a packaging which will score better in terms of sustainability.”
Torniainen of Paptic says it is doing something similar and said sustainability is complicated but brands are more and more aware of these issues.
“Our challenge is the plastic waste problem. All brands need to start addressing this. Paptic has no plastic in its material but how do you communicate that,” he said.
“Around 95% of our customers have put this information onto the packaging to communicate what it is and how it is recycled. We have just launched e commerce mailers. We don’t produce the mailers but we produce the material for those.
“Most people want to act sustainably but it has to be made easy for them and we want to address this to make the life of the consumer easier.”
Albéa is about to expand its range of products which are e commerce.
“We are working on new systems which are easier to understand and how to use, the user is at the center of our reflection. We have recently been awarded Amazon certification which means we are part of a network of packaging suppliers to co-develop solutions,” added Cervantes.
Century Box says as a converter and printer it is similarly looking into new materials for e commerce such as special papers not made from trees but agricultural waste, which has a higher benefit in terms of sustainability and it is studying how to implement those papers into e commerce packaging in corrugated boards and boxes.
“We are working on a system to improve cost effectiveness at a logistic level to reduce assembling and order preparation time. This is a key factor for many of our customers and we are working on new box systems that enhance the customer experience.
“The growing demand is to have a personalized product for every customer so we are developing techniques which respect the colors of the brand and being able to adapt to every individual box, using digital printing technology which allow us to do that ie to have their name all over the inside of the box and it is getting requests to integrate digital technology into the packaging itself like RFID chips, NFC and QR codes.”
Fromont said luxury brands are not at an advantage because they were formally reluctant to enter this channel which means they were at a disadvantage of not being able to offer a quality service to their customers and being able to react to the market quickly.
“10 years ago some new channels of distribution were not even on the landscape but now when we develop a product we have to think about the brand positioning and sustainability and channel of distribution we are using. Some brands are being born and staying on the internet so the whole user experience will change,” added Cervantes.