 By Ian Lifshitz North American Director, Asia Pulp and Paper Group
It's beginning to look a lot like Christmas, which means the malls will be packed with people trying to get all their holiday shopping done with the minimum amount of stress. As is the tradition, most of the purchases will be made at brick-and-mortar stores. But, in recent years, the ability to buy online via personal computers or mobile phones has started to change the shopping experience for millions of Canadians.
This holiday season, the forecast for retail sales growth is being described as modest, expected to be less than five per cent.
On the e-commerce side, where the sector is relatively small, there is expected to be a double-digit growth during December 2017. According to Forrester Research, the march towards more online shopping is picking up speed. In 2011, online spending was CA$6.6 billion; last year, it had almost tripled to CA$19.2 billion; and by 2019 it will be CA$39.9 billion.
Many are expressing their displeasure over the type and size of the container used to transport the purchase.
The closure of well-known stores, the most recent example being Sears Canada, is a clear indicator that the retail industry is changing. And while there is widespread acknowledgement that the dominance of stores is waning, it is still too early to write an obituary. Though some analysts suggest we could reach that tipping point within the next decade, when the majority of our shopping will be done online.
And while more purchases are being made online, there is one very important issue within the packaging industry that has to be addressed. While consumers love the convenience, many are expressing their displeasure over the type and size of the container used to transport the purchase.
A recent survey conducted by the market-research agency, ORC International, for Asia Pulp and Paper (APP) Canada found roughly six in 10 Canadians want something done about the excessive packaging used for home delivery items.
Having a huge box at your door with a relatively small item inside is perceived to be excessive, unnecessary waste.
Many consumers believe simply replacing the container with a smaller one should have been the smarter alternative. Unfortunately, looks can be deceiving. Sometimes a large box is necessary to provide the best protection for the purchase. If that is the case, there are two steps that need to be taken. Firstly, make sure the packaging is sustainable, recyclable and environmentally friendly. Second, make sure the recipient is provided with clear details on why such a large container was used in this case.
Education and information can build trust between retailers and consumers over shared environmental concerns.
The survey carried out for APP discovered a growing number of consumers say they are willing to pay for better packaging. Therefore, this holiday season, and going forward, it is important to communicate the type of packaging being used and why. It is clear, consumers are demanding more creative options that reduce waste. The number of people who say they are willing to pay more (our latest survey found 33 per cent agree) for packaging with sustainable attributes is significant.
The way people shop, and when, has changed because of technology. Almost 40 per cent of consumers are now having some household items such as groceries or cleaning supplies delivered to their home via mail (it is even higher for clothing and electronics). In general terms, the younger the consumer, the more likely they are to use online shopping more frequently. Each new generation is expected to embrace the option of buying through a few taps on a smartphone. Therefore, we need to make sure the packing meets everyone's environmental needs.
Even before the box is ripped open, the consumer is making a judgement call on the company based on the packaging. What is on the outside matters.
Younger consumers are more likely to base their purchases on receiving items in environmentally-friendly packaging. Putting a nice bow on a box is not enough.
This is even more important at this time of year because consumers want the packaging to help create an in-the-moment event for the person receiving the gift.
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