The founder of Amazon, Jeff Bezos once said ‘Brands are like quick drying cement.’ And with Amazon’s launch in Australia this week they aren’t getting stuck in a rut anytime soon. Amazon has already been in talks with over a quarter of Australia’s grocery suppliers, with a focus on packaged goods being offered the potential of a lucrative new channel to market their brands and products.
The availability of FMCG brands online is obviously not new. In Australia, 3% of total grocery sales are online, however, compare that to 8% in the UK and the opportunity of sales and growth for Australian FMCG brands is evident. Yet this retail channel brings different considerations and challenges when tackling the branding and design of FMCG packaging.
For those of us who are reducing the amount of time we spend in supermarkets and increasing our online grocery spend, the role of packaging is becoming more significant after purchase. When that online order is delivered to our home, the packaging has the opportunity to delight or disappoint. It may be the first tangible moment we see and interact with the pack after already committing to the purchase. So instead of the brand and packaging design primarily ’tempting to buy’ on shelf, we’re seeking ways with our clients to create the optimum first impression and engage with a consumer in their home far away from the shelf in store.
Most telling is how we see an increasing number of our Asian based clients and brands sell their FMCG products only through e-commerce stores such as Alibaba.com, never to pursue ranging in bricks and mortar supermarkets. Transactions on Alibaba totaled $248 billion last year, more than eBay and Amazon combined. With hundreds of millions of users, the amount of business handled has seen the e-commerce store become one of the most valuable tech companies in the world after raising $25 billion from its U.S. IPO.
77% of Chinese consumers aged 20-49 have shopped at online grocers for home delivery. With 65% now using their mobile phone more than a desktop or laptop for online grocery shopping. The convenience and time saved also resulted in the repeat purchase rate for many FMCG brands significantly increase compared to offline. We are more susceptible to visual outside influences offline like rebrands, new packaging designs and point of sale that all encourage different brand choices.
With consumers favouring the e-commerce retail channel more and more, as an agency we spend a lot of time evaluating a pack designs potential in this digital environment. Such as, maximising the opportunity of pack shots to extend a products narrative into a branded environment that a static shelf in a supermarket could never do. Both Alibaba and Amazon offer branded concessions within their online store so a powerhouse like L’oréal can offer navigation of their portfolio through a L’oréal branded store and not an endless generic stream of thumbnail images.
It may still feel far reaching but the wheels are in motion and now Amazon has hit Australia, those wheels will inevitably speed up. Change is coming and FMCG brands and their packaging designs need to be ready.