Submitted by: Sam Upton June 16, 2020
Among the many questions asked during the recent Two Sides European Packaging Survey, there are two in particular that should leap out for all brands. The first concerned the public’s preference for packaging material, with 5,900 consumers asked to respond to the statement “I prefer products ordered online to be delivered in paper packaging rather than plastic packaging”.
Throughout Europe, consumers expressed a clear preference for paper, with 66% of respondents either agreeing or strongly agreeing.
From physical to online
With many non-essential shops closed and people spending the majority of their time at home, the lockdown period unsurprisingly resulted in a large increase in online shopping. In May, e-commerce transactions in the UK saw a 168% increase compared to the same period last year. This is largely driven by rising online sales of electronic items, DIY supplies, home furnishings and sportswear.
“The lockdown has changed the way UK consumers shop, with shopping habits shifting online just as our work and social lives have,” Amanda Mickleburgh, Director, ACI Worldwide, told Internet Retailing. “In the past, Brits may have preferred brick-and-mortar stores to buy items such as electronics, furniture or DIY supplies, but now many of us are happy to purchase those goods online.”
This shift in shopping habits is repeated in the US, where this year’s e-commerce sales are predicted to be 18% up on 2019. That represents over $100 billion of sales. Curiously, the largest source of growth is from consumers over the age of 45. These 7.4 million new online shoppers may have been reluctant to make many purchases online, but they have now become keen digital customers.
The growth of cardboard packaging
Of course, with this huge increase in online shopping comes an equally huge requirement for packaging. Many cardboard packaging companies have reported an increase in demand, such as DS Smith, who said the demand for recycled cardboard packaging has been strong.
A 2019 report by Smithers found that, even before Covid-19, the global corrugated packaging market was growing faster than expected, helped by the explosion of e-commerce and developments in digital printing technologies. The Future of Corrugated Packaging to 2023 report stated that the market is predicted to grow around 3.7% annually to reach $300 billion in 2023, with estimates of around 20% annual growth in e-commerce trade in Europe. Since the corrugated industry represents 80% of demand in e-commerce, predicted online sales of over $5.5 trillion in 2023 will have a profound impact on packaging demand.
The future of shopping
While this may not be great news for physical stores, it’s hugely encouraging for the cardboard packaging industry. With consumers clearly preferring paper over plastic packaging, demand should remain strong for cardboard, the lightest, most sustainable and versatile packaging medium in the world.
There’s no doubt that the Covid-19 crisis will change many aspects of modern life for at least the next few years, and one of them will be the way we shop. New online habits will stick and companies will become better at fulfilling orders, with new working practices, quicker delivery and appropriate package sizes making digital shopping even better. The eMarketer report states that analysts are predicting that, despite the predicted reopening of physical stores in 2021, online sales will continue to increase.
“The current crisis is likely to lead to long-term behavioral change among consumers,” says Amanda Mickleburgh of ACI Worldwide. “And retailers need to adapt and change their strategies accordingly.”
For more articles from Two Sides, please visit here