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Commentary & Analysis

Megatrends in Packaging: The Digital Age

The digital age is changing our world. Forces driving the change are: people, information and technology.

By Kevin Karstedt
Published: February 3, 2014

The digital age is changing our world. Forces driving the change are: people, information and technology.

In our report; Is Digital Printing Part of Your Brand or Operational Strategy? We describe how technological advances with the Web, computers, mobile phones and tablets enable billions of people to connect all over the world, including a burgeoning number of consumers in emerging markets. And this worldwide connectivity has led to continued growth in methods of electronic information exchange. We now live in the social media world of Facebook, LinkedIn, blogs, tweets, Skype and streaming video, all feeding into daily tidal waves of information. We receive news and information right in the palm of our hands in near real time.

The ease and immediacy of social interactions make the world a smaller place and are having a significant impact in packaging. Digital media is now being used to enable brands to engage and energize shoppers and consumers in new ways that can elevate the shopping experience.

Shopper Behavior Changes

Until the early part of the last decade, TV and publication advertising heavily influenced shoppers’ buying decisions. Viewers would develop their first opinions while watching TV commercials or seeing publication advertisements. Buying decisions would often be made prior to entering a retail store.

The digital age has changed our buying influencers. The emergence of satellite, cable TV, DVR, eBooks and computers has caused a major decline in the conventional forms of advertising. In 2002 Procter & Gamble publicly announced a corporate focus on First Moment of Truth (FMOT). This focus emphasized packaging that would stand above the clutter on the store shelf. Shoppers began to shift their product purchase decisions to the retail space as they roamed the aisles. Stopping shoppers in the aisle, holding their attention and closing the sale are the critical components of FMOT.

Shopper behavior at the end of the decade changed again. The shift toward shoppers living in the real world and living in the virtual world has created the Zero Moment of Truth (ZMOT). Shoppers now receive online advertisements, Facebook posts, blogs, tweets and YouTube videos of what others think and, many times, these provide the first product/package experience. More purchase decisions are made through these first online experiences. Cyber Monday 2010 recorded, what was then, the single largest retail sales day ever with $1 billion in online purchases. Just last year, comScore, a company that provides “Analytics for a Digital World,” reported Cyber Monday sales at $1.735 billion, up 18 percent from 2012.

The Future of Packaging

Shopper behavior will continue to evolve and likely be shaped by the BIG SIX Megatrends:

1.  Want it Now

‘Want it now’ is a trend born out of the fact that everything is connected and is on-demand. Online users expecting faster- and more-convenient connections to their favorite sites have downloaded more than 10M apps. Online music and movie purchases reinforce the point that when you “click”, you can have your product instantly. Consumers want their products as soon as they have made their decision. Consumer product companies need to improve their response times to meet delivery expectations. Packaging lead times need to be cut to meet the new delivery speed requirements.

2. Consumer Expects More

Never in the history of the world have people been as connected as we are now. Consumers connect online to their brands across the world. The world is a smaller place and has a greater sense of social awareness. Consumers expect their brands to have meaning and stand for a cause. Causes include the pink ribbon campaign, healthy drinking water or fair treatment of the coffee bean farmers; the fact is consumers expect more. There is a growing trend with co-creation of brands, enabled by the Internet. Consumer product companies are reaching consumers and involving them online with the revitalization efforts of their brands. There are numerous case studies of personalized products and package possibilities including Nike sneakers, Harley-Davidson bikes, My Kleenex and even My Extra Gum packs. Consumer product companies need to create agile supply chains that allow more than just a long run of a few classic brands appearing in a big box store.

3. Innovanomics

You won’t find the word “innovanomics” in the dictionary, but it’s one you’ll get to know as it describes the changing times we live in. The meaning is simple… the economics of innovation. The rate of product and package obsolescence continues to pick up. Consumers dispose of products prior to the end of their useful life, just for the mere fact that a more fashionable option has become available. Companies must deal with an innovation migration plan so as to continually improve and satisfy consumers’ unmet needs. The alternative of doing nothing means others will innovate past you with a preferred product or package position.

4. Green is Normal

What started in the early part of the last decade as a trend has now moved to the mainstream. First we saw the self-policing efforts coming from the trade (e.g.: WalMart, Target, Carrefour, etc.) to consumer product companies. Now you see CPCs providing scorecards to their suppliers. There is now an app for monitoring and keeping track of your own personal carbon footprint. Don’t be surprised when we start sharing these stats at social gatherings.

5. Growth in Emerging Markets

There has been much media coverage on this topic so we will not belabor this well-recognized point. Even with recent difficulties and growing pains in some of these sectors, significant growth will come from emerging markets in Brazil, India and China (BIC), just to mention the most noteworthy.

6. Neuroscience

Scientific advances in the ability to sense, measure and record brain waves from the frontal lobes have made it possible for us to take a “look inside the brain”. There are several competing companies that have developed the capability to quantitatively measure emotions. The technique is done by wearing a cap or strand around the forehead filled with sensors measure emotional responses to package graphics. The measurements are validated, rendering the approach reliable. In the future CPCs will use this technique to determine which graphics elicit the best emotional response. There will be no more guessing when it comes to which graphics have the potential to elicit the most sales. 

This is an edited excerpt from Karstedt Partners report titled: Is Digital Printing Part of Your Brand or Operational Strategy? The report was coproduced with Mike Ferrari of Ferrari Innovation Solutions and former Procter & Gamble executive. Click here for more information on the report.

Karstedt Partners, LLC offers a variety of consulting services to participants all through the packaging and consumer product supply chain. Their clients include Brand Owners, Packaging Converters who are looking at process improvements in their packaging operations and OEMs and Service Providers who are looking to develop products and services for Brand Owners and Packaging Converters. For more in-depth analysis and research visit http://www.karstedt.com or contact Kevin Karstedt at kevin@karstedt.com or Jeff Wettersten at jeff@karstedt.com.

 

 

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Label & Packaging Editor

Jennifer Matt

Patrick Henry, Section Editor
Pat has covered graphic communications for nearly 30 years as a reporter, an editor, and a commentator.

 

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