Breaking up with plastic: the direct-to-consumer opportunity

August 16, 2018

By Simon Norman, Applied Science Consultant at Sagentia 

In our recent white paper ‘Breaking up with plastic’ we urged manufacturers and retailers to rethink the way consumer products are presented. Many of the publicly announced plastic-reduction campaigns simply tinker with packaging associated with existing products. However, the complexity of the plastic pollution problem demands transformational change. 

An area that appears ripe for a revolution in packaging is direct-to-consumer sales. The digital age has driven exponential growth in this sector. Yet despite products being selected online and shipped straight to the consumer, in some cases by an integrated logistics system, most items are still packaged as if they’re destined for shelf-space in a retail environment. They’re robust, eye-catching and durable. And much of the time, that means plastic – lots of it.

But it shouldn’t have to be this way. Take Amazon’s packaging of technology components such as cables. Instead of being contained in a blister pack or a plastic bag, they arrive in a plain cardboard box. There’s no need for point-of-sale standout or security tagging, so simplicity wins and single-use plastic is avoided.

The groceries challenge

The grocery industry is one of the most visible sources of single-use plastic. Consumers are dealing with it every day in their own homes, which makes them feel complicit in the problem. Increasingly there’s a perception that food in particular is unnecessarily over packaged. Of course, much of the time this packaging is in fact carefully designed to protect and preserve food during the distribution and storage of the supermarket supply chain – providing structural protection as well as extending shelf-life. Yet despite these challenges changing when groceries are sold online, products are supplied in exactly the same format as they’d have been found instore.

So what’s preventing supermarkets from rethinking product packaging for online sales?

Many grocery products are sourced and supplied by supermarkets, not manufactured and packaged in their own facilities. So packaging decisions can be made further up the supply chain. There is an argument that supermarkets could and should collaborate with suppliers to reduce the use of plastic, but cost is often a limiting factor. It might not be economically viable to provide alternative SKUs for retail and online environments. Furthermore, the current strategy for online grocery shopping is trying to shoehorn an established offline model into an online environment. The lean and agile nature of digital business doesn’t easily accommodate traditional retail patterns.

All change here

Disruption is firmly on the agenda for online grocery sales. All eyes are on Amazon following its acquisition of Whole Foods, with speculation rife as to how this digital giant might lead transformation in the sector. There’s already strong consumer demand for more intuitive and flexible online grocery shopping. If new entrants can also answer the escalating call for reduced plastic packaging, there could be a seismic shift in the way people buy and consume grocery products over the next five to ten years.

At Sagentia, we believe there are three key ways manufacturers and retailers can rethink home and grocery products to reduce plastic in a direct-to-consumer scenario:

Fresh products prepared to order – taking certain processes inhouse would reduce the need for plastic-intensive packaging formats with strong structural features. If perishable items such as meat and fish were prepared and packaged on the day of despatch, they could be wrapped more simply in compostable materials or delivered in re-usable temperature-controlled packaging. Many consumers unpack fresh meat from the original sales packs in order to fit into limited freezer and fridge space; overly large packaging is not directly beneficial to the consumer.

Reverse vending – there is much scope to reimagine the traditional model associated with milk rounds and the ‘pop vans’ that sold carbonated drinks door-to-door in the UK during the 70s and 80s. This could extend to other drinks such as fruit juice as well as non-consumable liquids, such as shampoo and shower gel, or cleaning products. Many consumers currently use kerbside recycling services for the packaging associated with these items. Instead, the empties could be exchanged for reuse when new products are delivered or purchased from a reverse vending machine. As an incentive to return empties, consumers could be rewarded with money off their next purchase, or they might invest in the scheme’s packaging upfront to receive the product more cheaply thereafter.

Smart re-ordering – for items that have a shelf-life but only need to be replenished intermittently, the use of smart packaging could help avoid waste and reduce packaging requirements. For instance, over the counter medicines, which traditionally come in blister packs or with disposable measuring spoons, could be provided in reusable packaging that contains a sensor to alert the retailer when a refill is needed. Reimagining shelf-life and storage requirements could unlock new methods to supply these products that are less reliant on plastic.

High-performance demands transformation

There is much discussion about the need for businesses to transform the way they operate for lasting success in the digital age. But it’s not just about optimising behind-the-scenes digital processes. Businesses need to listen and respond to customer demand, investing in ways to differentiate and keep one step ahead of the competition.

The call to action over plastic pollution is not going to quieten down any time soon. But simply trying to strip away plastic packaging from existing products is never going to address the problem in a viable and sustainable way. What’s really needed is new ways of buying, selling and consuming products that don’t rely on single-use plastic. Cohesive approaches to product and packaging innovation – with plastic reduction emphasised as a core design feature – will be critical to success.

A high-performance business is a customer-centric business. And the most successful brands of tomorrow will be those addressing concerns like plastic pollution today. Watch this space.

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