Packaging In An Online World


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Defining the role of packaging as part of the online shopping experience
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Packaging In An Online World

  1. 1. Packaging in an onlineworldDefining the role of packaging as part of theonline shopping experienceWhite paper | November 2011
  2. 2. Shikatani Lacroix is a leading branding and design firm located inToronto, Canada. The firm specializes in creating lasting firstimpressions for brands through design innovation. The companywas first to coin “the Blink Factor” which identifies how brandseffectively connect with consumers in a complex and clutteredworld. The company has commissioned assignments from allaround the world, across CPG, retail and service industries, helpingclients achieve success within their operating markets. It does thisby enabling its clients’ brands to better connect with consumersthrough a variety of core services including corporate identity,naming and communication, brand experience, packaging, retail,wayfinding and product design.About the AuthorJean-Pierre Lacroix, R.G.D., President and Founder ofShikatani LacroixJean-Pierre (JP) Lacroix provides leadership and direction to hisfirm, which was founded in 1990. He has spent the last 35 yearshelping organizations better connect their brands with consumersin ways that impact the overall performance of their business. Mr.Lacroix was the first to coin and trademark the statement “TheBlink Factor” in 1990, which today is a cornerstone principle tohow brands succeed in the marketplace. JP has authored severalpapers, has been quoted in numerous branding and design articlesand, in 2001, he co-authored the book “The Business of GraphicDesign,” which has sold over 10,000 copies. Most recently, he hasauthored a new book “Belonging Experiences...Designing EngagedBrands” ( on how brands need to effectively createmeaningful relationships with consumers. JP can be reached and you can follow his blog You can also explore a widerange of useful white papers, video webinars, including thispresentation and other thought leadership ideas paper | November 2011 | Online Packaging | 1
  3. 3. Is there a future for packaging in an online world?This very question was the foundation for a research study ourfirm conducted in the U.S. in September 2011. With the explosivegrowth of online sales, how is this impacting the need forpackaging and does packaging need to evolve to effectivelysupport branding initiatives that have worked so well at the retailshelf level? We have seen other channels of distribution emergingover the years, warranting their own style or type of packaging.From the big discount warehouse clubs who demand oversizedmultipacks to the convenience retail sector looking for productsthat can be consumed in the car, marketers have met thesechallenges with unique packaging.With the rapid growth of online sales, do marketers again need torethink their packaging strategies for this unique type ofdistribution channel? If so, what type of changes are required thatwill ensure their brands remain relevant as part of the pre, duringand post purchase cycles. This white paper will present recentquantitative research findings conducted by our firm. In addition,we will be sharing insights on consumer online shoppingbehaviors and the role packaging needs to play to providemarketers and brands with a sustainable advantage, namely:1. Why should we care about online?2. What are the branding requirements for online shoppers?3. What role does packaging fill as part of the online selectionprocess?4. Guidelines and application approaches for marketersWhite paper | November 2011 | Online Packaging | 2"Online shoppersare ‘up to 15percentmore brand loyal’and spendmore on theInternet thanwhenshopping atphysical retailoutlets"Andy Houghton, UnileverE-Commerce Director
  4. 4. Executive summary - leveraging a new moment-of-truth foronline shoppersThe role of packaging is changing in an online world, and how itlinks to conventional retail purchase behaviors is shifting. Thegreatest change is occurring at the post-purchase stage of theonline experience, challenging the conventional wisdom of creatinga consistent brand experience.The study identified that once the purchase is completed, the roleof packaging changes dramatically, and its primary purpose is toprotect the product during shipment. We have identified thereceipt of the shipping package to customers as a new moment oftruth to which marketers need to pay greater attention. On themost basic dimension, it is ensuring that the shipping cartonproperly protects the goods during transportation. However, on agreater dimension, it is an opportunity for organizations to convertthis functional need to one that provides a unique and ownableexperience that builds affinity for the online service provider orbranded product.For now, marketers can take great comfort in knowing thatshoppers continue to rely on packaging to make the right selectionprior to and during the online purchase process. The ability toleverage pre-established relationships with the brand viaconventional retail channels of distribution remains importantfactors in the selection process. Packaging graphics are currentlythe link of familiarity between the offline and online world.However, with the continued growth of online sales, having a prioroffline experience with the brand is becoming less relevant.White paper | November 2011 | Online Packaging | 3
  5. 5. The growth of online sales?Much has been written and researched regarding online sales. Thehysteria of the ’90s that predicted the downfall of conventionalretailing has been replaced with fact-based proof that retail is hereto stay and prosper. The reality that came to light in the turn of thiscentury clearly identified that web commerce and retail saleswould prosper together as they both complemented the needs ofshoppers on their quest for finding the best value and selection.Today, online sales in the U.S. represent $145 billion, or bycomparison, roughly 60 percent of Walmart’s total U.S. store sales.Consistent with a continued growth for the category, a morerecent 2011 ComScore study identified that total e-commerce salesthrough Q2 2010 were up seven percent versus a year ago withtravel and non-travel up five percent and nine percent, respectively.Irrespective of online sales’ meteoric growth in the past ten years,it still only represents four percent of total sales. Based on a 2010U.S. Census online commerce report, this growth waspredominantly generated from the sales of music, electronics,computer software, books/magazines and clothing. You couldargue that some of the growth is a natural transition for thetechnology and service industries as they move to a digital world.White paper | November 2011 | Online Packaging | 4“Americaninternet usershave embracedonlineshoppingbecause theysay it isconvenient anda timesaver.”John B. Horrigan, AssociateDirector, PEW INTERNET &AMERICAN LIFE PROJECTBase : All respondents n=27,665 AC Nielsen Consumer Confidence Survey – Q1 2010 • Field dates March 8, 2010 – March 28, 2010OtherCar hireSports MemorabiliaAlcoholic drinksBaby suppliesAutomobiles & PartsFlowersComputer SoftwareToys/DollsSporting GoodsMusicGroceriesVideos/DVDs/GamesComputer HardwareEvent TicketsCosmetics/nutrition suppliesTours/Hotel ReservationsElectronic equipmentAirline ticket/reservationsClothing/Accessories/ShoesBooks 44%36%32%27%26%22%20%19%18%18%16%13%11%11%8%7%7%6%5%4%7%
  6. 6. CPG growth of onlineNot only have the sales of fashion, reading and electronic productsshifted to a significant portion of online sales, CPG companies haveseen a growth of their products. In 2010 sales of consumerpackage goods online grew to $12 billion or two percent of totalonline sales and are anticipated to reach $16 billion by 2012, a 25percent increase, outpacing total online sales growth. Based on aForrester and Barclays study, they anticipate growth rates of 10 to14 percent for the key CPG categories of pets, food/beverage andpersonal care. This growth has not gone unnoticed as companiessuch as P&G have seen their online purchases now accounting forone percent of their total sales. This has driven the growth ofpackage good companies in creating online e-retailing platforms tocapture this drive for convenience, choice, and now with electroniccoupons, value.The rise of digital has also greatly impacted shopping behaviorwith nine percent of U.S. households currently buying CPG onlineand this number is anticipated to rise to 21 percent by 2020.Consumers who buy online tend to buy larger basket size ($80online versus $30 offline) and for CPG companies, it is a platformto build stronger brand loyalty, establish a direct dialogue withtheir loyal customers and more importantly, help shift the balanceof power between retailers and manufacturers. For retailers, thisshift can be concerning as a recent Nielsen study identified thatbuyers are reducing offline trips and stocking up online. CPGmanufacturers are provided a strong online presence through sitessuch as Alice which allow a convenient and efficient way forconsumers to shop from a wide range of offerings. For most onlinewebsites, the use of packaging is fairly consistent, depicted by theface panel with supporting copy identifying the product features/claims and retail selling prices. In most instances, sites we auditedfeatured the ability to magnify the hero shot, making it easier forshoppers to recognize specific packaging features and productclaims.White paper | November 2011 | Online Packaging | 5
  7. 7. Women are big online shoppersA recent study by ComScore identified that 12.5 percent of womenInternet users made an online purchase compared to 9.3 percentof men. What’s more surprising is the fact that women made 61.1percent of online purchases that accounted for 58.2 percent ofdollars sold.The purchase categories that men dominate are electronics, eventand movie tickets and the more obvious, flowers. In all othercategories, women dominate the purchases. Women are also morelikely to use social networking online, and seem to be drawn tocommunity, lifestyle and health websites. Internationally, womenspend more time on the web than men. conducteda survey of women’s online and computer habits in 2009. Thestudy identified that when women who enjoy online shopping gettogether, 62 percent of their conversation is about products, with asignificant increase amongst those with children ages 13 to 17 (71percent).  The most talked about category of products on socialnetworks by women is beauty products.  After that food/restaurants and movies/entertainment are also popular, especiallyamongst younger women.Online pre, during and post shopping behavior insightsTo gain a better understanding of the role of packaging in anonline world, Shikatani Lacroix conducted a U.S. web-based studywith 1,000 consumers who had purchased an online product in thepast three months. Of the total number of respondents, 66.3percent were women versus 33.7 percent men, which supportsprevious studies on the gender profile of online shoppers. Toensure we had fair representation of the various age groups, weset quotas for age group segments, an equal split amongst the 50-plus, 30 to 49, and the 20 and younger segments. The actual splitwithin these segments is illustrated by the chart on the left.White paper | November 2011 | Online Packaging | 617 or younger18 to 2021 to 2930 to 3940 to 4950 to 5960 or older 11%18%13%17%25%8%9%Which category includes your age?SL 2011 U.S. Packaging in an online worldstudy
  8. 8. Respondent profiles align with industry benchmarksThe study had a fair representation of the various income bracketswith 11.7 percent consisting of annual household income beforetaxes of above $100,000, 37.1 percent between $50,000 and$99,999, 20.8 percent between $30,000 and $49,000 and another21.2 percent below $30,000. Although the online studyrepresented a different split between the incomes identified by theU.S. Census recent report, they do directionally align (20 percentearned over $100,000, 30 percent earned between $50,000 and$99,000, 25 percent earned $30,000 to $49,000 and 24 percentearned less than $24,000). The figure to the right clearly identifieshow the research sample income segments aligns with the U.S.Census.More than fifty-six percent of respondents were married with thesecond largest segment consisting of singles at thirty-five percent.The remaining segments were either widowed, divorced orseparated representing nine percent of the sample size. From anethnicity standpoint, the majority of respondents were Caucasianfollowed by an equal percentage for Asian, African American andHispanic consumers.From an educational standpoint, the majority of respondents had apost high school education with very few having less than a highschool diploma. It was interesting to note that within our study,only 25 percent had a full time job with another 30 percentworking less than 40 hours per week. More than 30 percent wereunemployed, either looking or not looking for work. Finally the lastsegment consisted of retired respondents who represented 10percent of the total sample.White paper | November 2011 | Online Packaging | 7Under $29M$30M>$49M$50M>$99M$100+20%30%25%24%37%21%25%17%SL Study 2010 U.S. CensusWhich of the following ranges best represents your totalannual household income before taxes?SL 2011 U.S. Packaging in an online world studyMarried56%Never married35%Separated1%Divorced6%Widowed2%Which is your marital status?SL 2011 U.S. Packaging in an online worldstudyUnder $29K$30K-$49K$50K-$99K$100+
  9. 9. Majority of respondents are heavy online purchasers and domost of the buyingClose to 70 percent of our total respondent sample fell in a groupthat did all or most of the shopping for online purchase. Thissegment’s largest age group was people 21 to 29, was bettereducated with 27 percent having a bachelor degree, higher incomewith the largest total household income group consisting of the$50,000 to $74,999 range, and predominantly women (71.2percent do all of the household online shopping). This group notonly did most of the online shopping, but also spent the most as apercentage of their total monthly spending with the largest groupat 29 percent who spent between 11 percent to 25 percent monthly.This group tends to outperform the total sample size but overallranking by purchase category remains consistent other thancomputer software and hardware. It was also important to notethat gift-giving was a very important portion of online shoppingneeds with 28 percent of all respondents purchasing more than 25percent of their total online purchases for this purpose.White paper | November 2011 | Online Packaging | 8Less than 5%Between 6% and 10%Between 11% and 25%Between 26% and 50%Between 51% and 75%Greater than 75%1.90%6.20%13.70%25.70%25.40%27.10%2.40%7.30%15.20%29.00%25.40%20.70%Do Most of online shoppingTotal respondentsAlcoholic DrinksSports MemorabiliaPharmaceuticalsHardware/ToolsSporting GoodsBanking ServicesGroceriesBaby SuppliesComputer HardwareToys/DollsComputer SoftwareMusicVideos/DVDs/Games 55.5%51.0%39.0%35.9%39.0%25.3%25.9%25.3%24.5%18.4%18.0%16.3%10.3%60.2%54.0%44.8%42.2%31.4%31.3%30.4%29.8%28.0%22.7%21.0%18.5%12.6%How important is it to see the actual packaging (graphics, brand name, format such as box, bag, tube of the package)prior to the purchase as part of the online experience for the following categories? Please only provide answers forthe categories you have purchased in the past three months. SL 2011 U.S. Packaging in an online world studyWhat is your online shoppingspending percentage of totalmonthly spending? SL 2011U.S. Packaging in an onlineworld studyDo most of online shopping Total respondents
  10. 10. Overall buying experience meets expectationsOverall, the majority of online shoppers were happy with theirexperience with more than 90 percent indicating that the currentexperience either met or exceeded their expectations.When asked to indicate which part of the online purchase processrequired the most improvement, 41 percent identified theexperience prior to the online purchase, namely the ability to doresearch, talk to friends and get information, required improving. Inreviewing the results, most respondents found the research part ofthe buying process time consuming, and confusing with the idealconsisting of sites that allowed them to review a wide range ofproducts and prices. Another 33 percent cited that the experienceduring the online purchase, namely the viewing and selecting ofproducts, accessing pricing, features, shipping and paymentoptions had issues that needed to be resolved.It was interesting that very few people identified the depiction ofpackaging as a major issue. When asked to identify areas ofopportunities, the following key points were listed:• The total cost of the product, including shipping before thecheck-out• Time consuming to gather all the research and find the product• Hard to navigate websites• Products were hard to see or information to read• Shipping delays and tracking• Return policies after buying• Ability to price compareWhite paper | November 2011 | Online Packaging | 9"I usually have agood idea ofwhat I want. Myonlineexperience isfinding thespecific productwhich satisfiesmy needs. I amlooking for theright price, and Ispend a lot oftime comparingprices."Respondent verbatim, SL 2011Online Study
  11. 11. Pre-purchase decision is very important in the selectionprocessWhen you review the behavior of heavy online shoppers, theytend to frequent sites that allow them to select products frommany different online stores (49 percent) as well as sites forstores that you can only shop at online (27.9 percent). Sitesthat sell their products through catalogues or “brick andmortar” stores were less frequently visited with only 22 percentselecting these options.Mention of sites most visitedMention of sites most visitedMention of sites most visitedSites where products/services are onlyavailable through thewebSites for buying singularbrands that can only bepurchased onlineOnline retail sites thatare linked to atraditional “brick andmortar”Amazon (42%) Amazon (11%) Walmart (11%)eBay (7%) eBay (3%) Target (6%)Walmart (1%) Walmart (1%) Best Buy (5%)Overstock (1%) Apple (1%) Amazon (3%)Qvc (.5%) Best Buy (1%),itunes (.7%), andTarget (.7%)Old Navy, Sears, Gapand Kohls werementioned lessfrequently (1%)Online shoppers rank the importance of the following factorsas very important in making the right purchase decision:• Reading online ratings (35 percent)• Have prior experience with the product/service (31 percent)• Brand name (21 percent)• Company website (19 percent)• Read social media customer comments (16 percent)• Referred by a friend or family (16 percent)It was interesting to note that advertising through conventionalmediums ranked very low at 10 percent. In addition, what wasconcerning was the low reliance on sites that includedconventional offline retailing options, potentially representingWhite paper | November 2011 | Online Packaging | 10
  12. 12. an early indicator of the shift away from traditional storeshelves as the first moment of truth. When respondents wereasked to select the most important factor that allowed them tomake the right buying decision across the various categories,two were emphasized, namely the prior experience therespondent had with the product or service, and the ability toread online ratings and reviews. We believe the future link ofconventional “brick and mortar” in establishing a priorexperience will be challenged with the growth of repeatpurchases of online products or services.Role of packaging importance prior to purchaseRespondents were asked what role does the packaging graphics orthe packaging structure play as part of their online selectionprocess. Respondents identified the following: the importance ofthe packaging protecting the product during shipping,reaffirmation that they were getting the product they purchasedonline, the ability to understand the usage or instructions as well asproduct features or claims that were easy to find. The two mostimportant factors were that the product they purchased online wasthe right product delivered to the home, in the right condition.What role does the packaging graphics and/or the packaging structure (box, bag, bottle, etc.) play as partof your online selection process? Most important listed in chartSL 2011 U.S. Packaging in an online world studyWhite paper | November 2011 | Online Packaging | 11Ability to see the actual packaging graphicsProduct features or claims are easy to findRecognize the product I saw in the storeKnow what I am gettingAbility to understand the usage or instructionsSee what it would look like as a giftHelps me select between various optionsReinforces the brand nameProtects the product during shippingAllows a 3D view of the product 19.6%64.9%20.7%32.0%22.8%45.3%60.0%36.1%40.8%26.7%Please identify the most important factor that allows youto make the right choice for each of the online productcategories you have purchased (please only provideanswers for the categories you have purchased in thepast three months).Please identify the most important factor that allows youto make the right choice for each of the online productcategories you have purchased (please only provideanswers for the categories you have purchased in thepast three months).Please identify the most important factor that allows youto make the right choice for each of the online productcategories you have purchased (please only provideanswers for the categories you have purchased in thepast three months).Category MostimportantSecond MostImportantSportsMemorabiliaPriorExperienceRead onlineratings/reviewsAlcoholic Drinks PriorExperienceReferred byfriend/familyBaby Supplies PriorExperienceReferred byfriend/familyComputerSoftwareRead onlineratings/reviewsPrior ExperienceToys/Dolls Read onlineratings/reviewsPrior ExperienceSporting Goods PriorExperienceRead onlineratings/reviewsMusic PriorExperienceReferred byfriend/familyGroceries PriorExperienceReferred byfriend/familyVideos/DVDs/GamesPriorExperienceRead onlineratings/reviewsComputerHardwareRead onlineratings/reviewsPrior ExperienceBanking Services PriorExperienceReferred byfriend/familyHardware/Tools PriorExperienceRead onlineratings/reviewsPharmaceuticals PriorExperienceRead onlineratings/reviewsOthersPriorExperienceRead onlineratings/reviewsSL 2011 U.S. Packaging in an online world study
  13. 13. When asked how important it is to see the actual packaging priorto the purchase as part of their online experience for the variouscategories they had purchased, video games, computer hardwareand software, groceries, pharmaceuticals, toys/dolls and sportsmemorabilia scored extremely high. Categories in which thepackaging was seen as slightly less important were baby supplies,alcoholic drinks, sporting goods, music, banking services, andhardware/tools.The role of packaging is viewed differently during CPG postpurchasingConsumers within the study who had purchased from conventionalconsumer packaged goods categories such as baby supplies,groceries and pharmaceuticals represented more than forty-sevenpercent of total respondents within the study. This group’s websiteusage mirrors the behavior of the overall group in the ranking oftypes of sites. Specifically, they expressed a preference with sitesthat allow them to select products from many different onlinestores as their preferred choice. This consumer package goodsgroup of total online spend and most other factors did also mirrortotal respondents within the sample.However, where we noticed a significant change in behavior iswhen respondents were asked the role of packaging as part oftheir online selection process. Online buyers of baby supplies andespecially groceries and pharmaceuticals ranked the role ofpackaging significantly higher in the selection process, with thelargest percentage shift consisting of a 3D view of the product(25.5 percent versus 19.6 percent for all product categories), abilityto see the actual packaging (33.7 percent versus 26.7), and helpsme select between various options (45.2 percent versus 32percent).White paper | November 2011 | Online Packaging | 12Sports MemorabiliaAlcoholic drinksBaby suppliesComputer SoftwareToys/DollsSporting GoodsMusicGroceriesVideos/DVDs/GamesComputer HardwareBanking ServicesHardware/ToolsPharmaceuticals39.5%26.1%29.0%37.7%30.6%41.5%31.7%25.0%29.2%35.3%26.2%28.8%32.8%36.0%31.9%30.7%38.1%37.0%44.7%34.1%30.9%35.8%33.7%30.4%25.7%37.4%39.9%34.0%30.7%42.1%37.6%42.0%30.9%31.1%39.2%35.8%33.9%24.4%36.5%30.3%24.9%26.7%34.1%35.7%35.4%28.9%25.6%28.9%31.1%23.6%19.0%32.7%Very Important - Total Sample Very Important Baby SuppliesVery Important Groceries PharmaceuticalsFor those respondents that purchased baby supplies, groceries andpharmaceuticals versus the total sample, how important is it to see theactual packaging (graphics, brand name, format such as box, bag, tubeof the package) prior to the purchase as part of the online experiencefor the following categories?Total Sample Baby SuppliesGroceries Pharmaceuticals
  14. 14. The importance of actually seeing the package graphics, brandname, and format prior to the purchase also increased significantlywith the biggest swing between eight to eleven percentage pointsfor baby supplies, groceries, hardware tools and pharmaceuticals.Overall, this group also tended to be more satisfied with theironline shopping experience with more than 30 percent citing thattheir current experience exceeded their expectation versus 25percent of total respondents.Packaging remains an important element during thepurchase processRespondents are looking for the quickest and most expedient wayto grasp the information they require with more than fifty percentselecting the simpler approaches to see the packaging. These arenamely the packaging photo of the main view with the appropriateprice, and ability to view close-up images of product featuresdepicting all views. You could argue that customers go through asimilar offline and online product selection process, namelyidentifying the category, scanning the range of offerings based ona set of criteria, narrowing the range to a select few options andthen gaining more information through side panel information,pricing and product claims.Most websites that we visited and those mentioned byrespondents as most frequented mirrored a similar shoppingstructure to offline experiences. Approaches that had moreelaborate features such as a virtual tour of the product wherecustomers can control the view in addition to the price, andfeatures or a video of the product being used, had very littleappeal amongst respondents.White paper | November 2011 | Online Packaging | 13
  15. 15. One of the key factors we noted is the amount of time spent aspart of the purchase process as more than 53 percent ofrespondents spend less than ten minutes on the online purchasingprocess. The need to review many products in a short period oftime reinforces the need to have a visual link of the packaging aspart of this selection process. Websites should allow for an easysearch of products by category and use the package image as theprimary navigational vehicle, while featuring supportinginformation such as price, coupons, features and testimonials as asecond layer of the purchase decision process.This principle is supported as respondents rated the use of a photoof the main view with appropriate price as the most importantfactor that allowed them to make the right choice for each of theonline product categories. Respondents were consistent withscoring significantly higher for photos on alcoholic drinks, music,groceries and pharmaceuticals. When reviewing a sub-segment ofCPG shoppers, this group reflected a different approach for babysupplies, computer software, computer hardware and hardwaretools. This group preferred a photo depicting all views withappropriate price and product features. An underlining reasoncould be that these products potentially represented morecomplex structural items.As part of your online selection process, besides absolute price and shipping policy, please indicate whichapproach to depicting the product/service allowed you to make the right decision?SL 2011 U.S. Packaging in an online world studyWhite paper | November 2011 | Online Packaging | 14Photo of the main view with the appropriate pricePhoto depicting all views with the appropriate price and product featuresVirtual tour where you can control the view plus price and product featuresVideo of the product being usedAbility to view close-up images of product featuresPhoto of the main view with pricing, features and testimonialsAbility to view the product packaging, instructions and potential features 32.9%38.5%50.7%22.1%27.5%49.9%61.2%
  16. 16. A higher degree of security, and the ability to pricecompare were important improvementsWhen respondents were asked what improvements they wouldexpect other than price of shipping options, more than 53 percentcited more secure ways of paying and the ability to price compare(44.2 percent). Other improvements that ranked high on the listwere easier navigation within the website, better image quality andquicker uploads. It was interesting to note that irrespective of thegrowth of smart phones and their use for browsing the web, only17 percent identified this as an area of opportunity. Respondentswho had purchased CPG products tended to also rank the abilityto price compare as a significant area of improvement.Packaging does not play a critical role in the post purchaseonline experience for most categoriesAlthough respondents ranked packaging as an important elementprior and during the online purchase, it was interesting to note thatits importance dropped significantly in the post purchaseexperience. We would have assumed that branded packagingwould be a constant link throughout the process. However, overall,the study identified that in most instances, especially for music andsoftware where the respondents can download these online,packaging that arrived in the home did not play a critical role.When asked how important it was to have the product arrive in thecustomer’s home in the same packaging seen in the post purchase,the CPG categories which ranked higher were pharmaceuticals(36.2 percent) and groceries (35.8 percent). When reviewing the150 CGP results on the role of packaging, consumers wantedreassurance that the product they purchased online was the sameas the item being delivered.White paper | November 2011 | Online Packaging | 15Sports memorabilliaAlcoholic drinksBaby suppliesComputer softwareToys/DollsSporting goodsMusicGroceriesVideos/DVDs/GamesComputer HardwareHardware/ToolsPharmaceuticalsOther 23.7%24.4%27.8%32.5%38.6%35.8%29.1%25.6%32.6%33.9%26.6%21.7%29.1%How important is it for you that the product that arrives in yourhome has the same packaging that you would find if you hadpurchased the product in a store? Results for Very ImportantSL 2011 U.S. Packaging in an online world study
  17. 17. Respondents also mentioned that packaging did not play a criticalrole since the purchase was already completed and they had a highlevel of trust in the reputation of the online company. Receiving thesame package as the one viewed online was less critical whileensuring the item arrived in a usable condition took greaterimportance. We also noted that packaging did not play a strongrole with customers who had a low requirement for brandedpackaging or were repeat purchasers of the same product.The importance of the package did increase if the consumer wasgiving the product as a gift. The study identified items purchasedonline for gift giving had a higher importance level for packagingwith a significant percentage increase for the following: sportsmemorabilia (42 percent versus 29 percent for non-gift-givingpurposes), alcoholic drinks (33 percent versus 22 percent), babysupplies (40 percent versus 27 percent), toys/dolls (47 percentversus 33 percent), sporting goods (40 percent versus 26percent), music (41 percent versus 29 percent), and hardware tools(36 percent versus 24 percent). Marketers may want to considerdeveloping unique packaging for categories where the product hasa higher propensity of being sold as a gift.Respondents did identify packaging as having a significantinfluence on the perception of the quality of the product (52percent), the quality of the manufacturer (40 percent) and thequality of the organization/retailer (37 percent). Howeverrespondents rated the overall packaging slightly lower on theirperception of the overall online experience (37 percent).White paper | November 2011 | Online Packaging | 16"If I know thebrand I am notconcerned aboutpackaging aslong as it is notbreakable"Respondent verbatim, SL 2011 OnlineStudyShipping container is generic with no indication of the retailer or brandShipping container features the retailer or brand nameShipping container has printed graphics that give it a premium lookShipping container is made of recyclable materialShipping container can be reused for storageShipping container is easy to open 45.1%37.2%39.1%23.6%30.3%24.5%33.6%18.2%24.1%14.6%16.1%16.6%How important is the overall design of the actual shipping container in how you would rate the overall online shoppingexperience?Very ImportantImportant
  18. 18. The shipping container is very importantRespondents were asked to rate their overall online experiencebased on a series of shipping carton options. It was interesting tonote respondents were focused on more functional benefits of theshipping carton versus the solutions that focused on the image ofthe package or reinforcement of the brand. Respondents identifiedthe following as very important to their online experience: ease ofopening the container (34 percent), shipping container is made ofrecyclable material (24 percent) and shipping container can bereused for storage (18 percent). Branding on the shippingcontainer had very little appeal amongst respondents.Most Important ImportantHow important is the overall design of the actual shipping container in how you would rate the overallonline shopping experience?SL 2011 U.S. Packaging in an online world studyWhite paper | November 2011 | Online Packaging | 17Printed graphics that give premium lookShipping container is generic with no retailer name or brandShipping container features the retailer or brand nameShipping container can be reused for storageShipping container is made of recyclable materialShipping container is easy to open 45.1%39.1%37.2%30.3%24.5%23.6%33.6%24.1%18.2%16.1%16.6%14.6%
  19. 19. Strategic ImplicationsUsability1. Feature the total cost as part of the upfront selection processwhen an item is being selected, including shipping anddelivery timelines versus offering this information at the endof the process2. Create a platform that allows visitors to not only reviewproducts but gain deeper insights through reviews of theoffering and price comparison with other similar brands,leading to a reduction of the amount of time customersspend researching3. Create a better delivery tracking system that is seamlessbetween the online store and the third party logisticscompany (Amazon was cited by many as having an issue inthis area)4. Make more secure payment systems, such as PayPal, anoption in the purchase process5. Identify up front if an item is out of stock versus having theshopper go through an entire buying process only to find outthat the item is not available6. Ensure the reviews are trustworthy and transparent as this isa growing concern amongst respondents7. Feature higher quality images of the packaging with theability to enlarge the image and read the support materialand pricing, allowing customers to scan a range of offeringsquicklyWhite paper | November 2011 | Online Packaging | 18
  20. 20. 8. Consider aligning customers’ typical offline purchasedecision behaviors with the site’s content structure where the“brick and mortar” experience is their first contact with thebrand9. Expand product selection and research that can be madequickly, and increase the ability to view a range of itemseasilyPackaging1. Packaging continues to play a very important role in theonline experience. The importance for customers is heavilyweighted as part of the pre research and purchase stagesof the online experience while for brand marketers, it isensuring the brand retains its visibility when the productarrives in the purchaser’s home.2. Ensure consistency between the package customers seeoffline with the one being presented online, as shoppersrely on the packaging graphics as a means of making aproduct selection in an online environment3. As online shoppers tend to represent a larger basket sizeversus offline purchases, it will be important for brandmarketers to reconsider their offerings to better reflect apantry loading strategy versus one driven by a higherpurchase frequency4. Package images need to have the ability to be enlarged onwebsites, and the quality needs to be high-end, as theimage of the package is a critical issue in the research andonline purchasing processWhite paper | November 2011 | Online Packaging | 19
  21. 21. 5. The online shopping experience must take intoconsideration the customer’s prior experience with theproduct, such as the brand shelf presence (first moment oftruth) and in-home experience (second moment of truth),as they are the most important factors in allowing them tomake the right online purchase decision6. Brand marketers need to review their post purchase brandexperience as this is a critical moment of truth:• Shipping package needs to ensure the product is notdamaged during shipping, needs to be made ofrecyclable material, and easy to open is an added bonus• Reduce primary packaging to save costs and considerpackaging that supports the premise that customers donot rely on graphics following the purchase process• Explore packaging approaches where there are stronglinkages to the brand in ways that are more meaningfuland distinctive as part of the post online moment of truthConclusionThe role of packaging as part of an online world remains importantas this channel of distribution continues to gain a largerpercentage of customers’ total purchases. Marketers will need toeffectively monitor how online shoppers’ needs are modifying theirreliance on branded packaging as part of their pre, during and postpurchase decisions. With consumers’ basket size beingsignificantly larger than offline purchases, it will be important totailor the offering to this unique behavior.White paper | November 2011 | Online Packaging | 20
  22. 22. For more information, contact:Jean-Pierre Lacroix, PresidentShikatani Lacroix387 Richmond Street EastToronto, OntarioM5A 1P6Telephone: 416-367-1999Email: jplacroix@sld.comWhite paper | November 2011 | Online Packaging | 21