Consumer confidence has always been a much-analysed metric for retailers, says Stefano Rossi, Packaging CEO at DS Smith, yet, with much of Europe currently engaged in cycles of locking down and opening up, confidence and certainty around the future is at rock bottom.
In the last two years at DS Smith, we’ve had a front row seat to watch how brands and retailers have faced up to these challenges. Those that are thriving and not just surviving have some commonalities: they’ve built nimbleness into their business, they’ve embraced a hybrid of online and bricks and mortar shopping and they’ve put sustainability at the heart of their offering.
I firmly believe that for those retailers who have begun 2022 with nervousness, by embedding these principles into their businesses, they’ll stand a much better chance of success even as uncertainty appears to be the only certainty.
Being nimble
As the pandemic hit, retailers that were able to quickly respond to consumers’ desires, such as redecorating and renovating homes or adopting new hobbies, thrived. More recently, as restrictions lift post-Omicron, we expect that the fashion stores able to quickly switch from promoting luxury loungewear to glamorous dresses will fare better than sluggish rivals. As we continue to oscillate between the opening and closing of the economy, retailers that can spot the signs of changes and rapidly adapt their offering to provide what consumers need and want, will be the winners.
Embracing the hybrid model
Those who’ve seen the most success have not just been nimble around what they sell, but also the route to market. We’ve seen a real evolution amongst brands and retailers to a hybrid model that utilises the best of in person and online – and allows for switching between the two.
This both reflects and informs how consumers shop – and over the last two years, we’ve seen the birth of the ‘fusion’ shopper: research we conducted over last summer showed that in an average month Europeans shop in store five times, online three times and use click and collect twice. If, as a retailer, you’re not embracing this approach then you’re already behind.
Yet, whilst almost a quarter of consumers (24%) said they planned to continue using click and collect for their groceries post the pandemic, this new model is showing signs of teething problems. Over half (53%) agreed that click and collect was the “worst of both worlds”.
For brands to make this transition successfully, then they need to refine their offering so customers receive the same high-level service regardless of channel used. Packaging can play a key part in this – from ensuring that the product arrives safely, despite up to 50 different touchpoints in the supply chain, to providing a luxurious and personalised unboxing experience.
Sustainability: no longer a luxury
Consumers are now expecting sustainability as a given – for example, almost a third of European shoppers we surveyed in 2021 said they have stopped buying particular brands altogether because their packaging was not sustainable.
However, the rising demand for e-commerce comes with numerous sustainability challenges; last mile deliveries, protecting goods from being damaged in transit and low-carbon packaging must all be navigated to win over environmentally conscious consumers.
Again, packaging provides a way to demonstrate sustainability credentials no matter which channel is used – by opting for recyclable and reusable options that are the right size, brands and retailers can show their commitment to a more circular economy.
A glass half full
Despite the challenges presented, I always prefer to look at the glass as half full. Where there are challenges to come this year, there are also many opportunities for retailers and brands to make their mark. In store, through innovative point of sale activations, and online on the ever-changing e-commerce landscape. We’re excited to be part of the solution by providing brands with customised packaging solutions, designed for a circular economy, that support their quickly changing needs.
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