Leading CPG Manufacturers Called to the Table
“Times are changing.” So begins Amazon’s invitation to an upcoming meeting with the nation’s leading food manufacturers. There, Amazon will encourage manufacturers to radically rethink how they produce and package their products by prioritizing direct-to-consumer ship-ability over brick-and-mortar display-ability. In a retail environment where online commerce has undeniably reached the “tipping point,” it no longer makes sense, they will argue as kings of the e-commerce hill, to produce and package goods with store shelves in mind.
This Godfather-esque meeting should put manufacturers on notice. With Amazon literally telling companies what their customers want and how they want it, manufacturers would be wise to find out for themselves, embarking on their own market research programs to understand what level of transformation makes sense, and on what timetable.
Optimizing for Direct-to Consumer Sales
Here’s the problem as Amazon see it. Most packaging today is made for in-store display—to showcase the item while also protecting against theft. That’s what gave birth to clambshell packaging, the bane of many a consumer’s existence, because, say what you will about its frustrating ability to resist any and all efforts to open, it is at once transparent and secure, making it ideal for electronics and toys in a brick- and-mortar setting.
But for home delivery that packaging is just pointless agony. A simple, easy to open cardboard box would do just fine.
Same goes for common household items. Why waste time and effort on the aesthetics of carton of laundry detergent if it is not competing for eyeballs in a standard retail environment? Better instead to prioritize ship-ability—packaging that is at once light and durable, easy to open, and easy to dispose. Same goes for breakable items like cookies and chips—why ship them to customers in a bag?
Mitigate Risk With Panel Surveys and Online Shop-Alongs
In its invitation, Amazon acknowledges this move will require a “major shift in thinking.” And that major shift, of course, is a costly one: redesigning packaging and shipping from the ground up is not a snap-your-finger-and-presto!-it’s-done kind of move.
But there are ways to at least ensure you’re spending money in the right places.
Panel Surveys would be a good place to start. These online surveys are not limited to your existing customer database and can give you an idea of how consumers use your products, how they purchase them and how often, and what specifically they want from them. This should give you an idea of how your products are faring in both a brick-and-mortar and online setting, and point you in the right direction for future research.
Online Shop-Alongs are the obvious next step. Moderators observe and interact with consumers as they browse and purchase your products in real time, noting the behaviors that drive consumers to click the BUY button. Are online consumers particularly attached to your existing brand presentation or willing to accept a change in the name of efficiency? What packaging features do these consumers prioritize? How will they receive (no pun intended) any changes you are considering?
Read how Nike has already prioritized direct-to-consumer sales.
