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Online retail packaging lessons from Black Friday 2017

By: Rob Carle

In the rush of Black Friday, and in the run up to Christmas, you may not have given much thought to how your packaging effects the shopper experience. That’s understandable, given that it’s hard enough to keep on top of the demand.

But a good packaging experience can be the difference between a one-off shopper and a loyal customer.

This article will look at this year’s Black Friday, and what it taught us about how to approach packaging during major discounting events, with a discussion of volume, returns, multichannel logistics, and design.

Traditionally arranged to coincide with the Thanksgiving holiday period in the United States, Black Friday has transformed the British retail calendar and overtaken Boxing Day as one of the most significant shopping days of the year.

UK shoppers flocked to physical stores over the Black Friday weekend looking for bargains. However, the biggest growth in Black Friday sales continues to be seen online, a clear sign that consumers prefer the convenience of internet shopping. As online retailers take stock of the lessons learnt from the past few weeks, they should plan to be ready with products, packaging and logistics all streamlined and able to meet the demands of eager online bargain hunters next year.

Image source: Freepik.com

Annual Black Friday growth continues at pace

According to IMRG, £1.39bn was spent online on Black Friday in 2017, equating to growth of 11.7 per cent versus 2016. What’s more, Black Friday has been joined by Cyber Monday, morphing from a one-day, high street spending spree, into a week of online purchasing activity.

But it’s not just the week: some commentators are now coining the term “Black November” and suggesting it will become a new kind of sales month, even overtaking December as the biggest shopping month of the year.

Global online retail consultancy Salmon anticipated that £20bn would be spent online in the month of November - £10bn of which will be spent via mobile. And the deals are even reaching back into October, with data from Love the Sales showing that the number of products on sale in October was up substantially on previous years, even up 50% toward the end of the month.

Unprecedented pressure

Understandably the stress that Black Friday or even Black November puts on brands, manufacturers and the whole supply chain, both in terms of packaging and outward shipping and returns, is without precedent.

We know that data driven online retailers understand the challenge of seasonal peaks all too well. However, in terms of Black Friday, it’s certainly not uncommon to start working with customers as early as July to help them prepare for a successful season.

Here’s the challenge:

Many businesses are unaware of the benefits packaging can bring.

Missing a trick

A recent DS Smith study revealed that more than a third (39%) of UK shoppers have experienced poor-quality packaging when ordering online and this prompted discontent, with nearly one in five (19%) saying they have felt angry or upset after the experience.

Poor packaging means poor customer service, which is a huge cause for concern given the highly competitive environment retailers are operating in. The truth is, packaging that isn’t up to standard means lost customers, as more than a quarter (26%) wouldn’t order again from a retailer who sent them a poorly packaged product.

When considered in the context of Black Friday and the significant scale of this retail event, poor packaging choices could easily mean thousands of pounds lost as a result of returned goods and lower than expected repeat orders.

The good news:

Good packaging not only prevents a bad experience, but can create a positive one.

Delightful design

Packaging must be durable and robust enough to withstand the journey from the warehouse to a shopper’s home, and potentially back again.  But many online retailers are now improving their packaging so it not only protects the product but also communicates and connects with the shopper. Digital and other print techniques, to meet small and large-scale needs, see the brand experience extended to the home, supporting strategies that aim to increase repeat orders, drive customer loyalty or enhance brand impact.

Innovative packaging design is constantly evolving and collaborative workshops with customers mean we work together to focus on creating packaging that excites, provides a positive experience on opening, and increases the thrill of a good purchase. This is particularly powerful with shoppers who find unboxing experiences something to celebrate and share online.

Return to sender

In 2015, Black Friday cost UK retailers £180m in returned goods and an analysis by Worldpay showed a 40 per cent increase in returns the week after Black Friday in 2016. The online retail supply chain must be ready for the unprecedented level of returns that this period generates.

We believe there are up to 50 touch-points in the online retail supply cycle; potentially 50 separate opportunities for a package to be handled by a machine or by human hands, and during which a package and what’s inside could get damaged.

And you can be sure of one thing in the age of social media – digitally savvy shoppers are quick to react online, posting photos and comments about poor packaging and broken goods for all to see. Ensuring your pack is fit for purpose – by protecting it, and making sure it is easy to open, and reseal when necessary – keeps shoppers happy, builds loyalty and drives success. It’s crucial to get this right.

Omnichannel is essential

The growth of Black Friday, Cyber Monday and Black November more broadly demonstrates perfectly how the lines between in-store and online retailing are blurred and that omnichannel retailing is here to stay. Retailers should consider how packaging can work across all channels, and whether efficiencies can be made throughout the supply chain by streamlining their packaging options.

Keeping ahead of the competition

Thoughtfully designed packaging can provide a competitive advantage, something that is important with the tight margins and mass discounting experienced throughout the peak retail period from November through to January. Reviewing packaging design and making sure it performs well throughout the supply chain often makes the difference.

Small changes to a pack design can reverberate throughout the supply chain, reducing energy consumption, waste and CO2 emissions. These incremental improvements can equate to substantial cost savings, greater efficiencies, improved environmental performance and a key competitive advantage.

As you consider your Black November strategy, don’t overlook the impact packaging can make. It can be used as a strategic prize fighter in the battle for success. Make sure it is up to the task of enduring the complex online retail supply cycle and that it serves the needs of the shopper. Business results can depend on it.

 

By: Rob Carle, Head of sales, e-commerce UK at DS Smith Packaging

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