Meeting E-Commerce Demand Requires a Single Source
As consumers continue to embrace online shopping, packaging plays an increasingly pivotal role in the e-commerce experience.
In a recent study conducted by the Danaher Product Identification Platform, 75% of online shoppers said they plan to purchase more snacks online and 63% plan to buy more health, beauty and personal care products in the next 18 months.
The continuity of brand and product across channels is increasingly important too, as 61% of shoppers expect the packaging they see online to be the same as what they see at their local retailer, and 47% expect the product image online to exactly match the package that arrives on their doorstep. Even more shockingly, one-third of e-commerce shoppers say they return health and beauty products because of the packaging.
Online buying requires packaged goods companies to adapt quickly to growing consumer desire; with the cutthroat, competitive environment of e-commerce, retailers are battling it out to meet consumer demand as efficiently and profitably as possible. With all of these rapidly shifting dynamics, the relationship between CPG and retailer is changing. And the uncomfortable relationship that can exist between them often stems from inconsistent data and untimely communication.
When designing product packaging CPGs, think: “Why can’t I give all retailers one set of data to use as they see fit?” Meanwhile, the retailer thinks: “Why can’t CPGs get me the correct product data quickly? I need to differentiate the product to compete against other e-commerce sites.”
Often, a retailer wants to begin selling a product even before it has the inventory, but can’t because it doesn’t have the data needed for promotion. And what stalls CPGs from providing consistent data quickly is the fact that they don’t have a single source of truth from which to pull it.
In our conversations with CPGs, one problem arises repeatedly: A lot of companies want to believe they have a master system somewhere containing the “truth,” but the reality is that the data gets altered many times and cannot easily be found in a single database. The system of record for accurate product data is often embedded in the final released artwork file.
Yes, the original packaging data is initially owned by a few master systems such as an SAP system or regulatory system, but there’s no single central location that hosts all this information — the actual consumer-readable truth is something that evolves over time through package and label development, the approval process, and the “ramp up” by marketing as the product gets closer to the shipping date. CPGs have been relying on a significant amount of manual processes to make up for the lack of a centralized source.
Because of e-commerce, the need for fast-acting data drives CPGs to establish and invest in structured data houses to find information faster, remove waste and inefficiencies in the process, and gain the ability to tailor appropriate messaging for specific retailers.
Enhancing the Data
Retailers also find that multiple product and lifestyle shots, along with tailored messaging, can increase lift. Product shots and nutrition/ingredient data are good for some, but a shot of the product being used in the kitchen, on the sports field or while hiking helps the consumer envision using the product, and this consistently influences purchase behavior. Custom messaging also helps retailers differentiate themselves from competitors.
To organize the development of this information, many CPGs now refer to both “on-pack” and “off-pack” data when talking about product messaging during the packaging creation process. “On-pack” refers to the typical information seen on product packaging such as ingredients, flavors and promotions, while “off-pack” includes information to help market the product in different retail environments, actual weight (as opposed to net weight), physical dimensions (for shelf planning) and literally hundreds of other pieces of data. Managing this data under tightening budgets, an uptick in the number of SKUs and changing global regulations and demographics is a tremendous challenge, particularly when attempted via manual or antiquated systems.
CPGs that focus on creating a single source of truth for their package data are able to quickly pull both on- and off-pack information out of a database to automate the placement of text onto the package and then automate accurate data delivery to e-commerce portals, with the additional ability to customize the data for each retailer according to language and need. This approach meets retailer desires for compelling e-commerce copy that entices online shoppers and has the potential to alleviate some of the dissonance between CPGs and retailers.
While some functions within CPGs will argue that they already utilize databases, each department is only one part of the process. The key to increasing data speed relies on creative upfront information and a unified, orchestrated workflow. If companies get it all in the right place the first time, it’s far easier to locate and share across departments, suppliers and retailers.
When everyone is connected to a packaging workflow of integrated technologies, the ecosystem collectively thrives, leading to better online shopping experiences for consumers and increased product sales for retailers and CPGs.
About the Author
Stephen Kaufman is chief product officer at Esko Brand Solutions. He has more than 20 years experience in developing packaging and label and artwork solutions for the consumer packaged goods, life sciences and retail industries.