The growing importance of sustainability in the online grocery sector
2019 was the year that sustainability and the environment gripped the minds and consciousness of consumers. While we sought faster delivery options online and took delight in new and experiential shopping experiences in-store, we simultaneously turned our attention to the ever-growing sea of plastic destroying our oceans and the diesel particulates choking our planet.
Although sustainability has taken a back seat in recent months, change is still happening. In a briefing paper published by the House of Commons in March, it was estimated that five million tonnes of plastic is used every year, nearly 50% of that being in packaging. Furthermore, the WWF states that it takes 450 years for a plastic bottle to biodegrade whilst a six pack of plastic rings used to hold cans together takes 400 years.
These statistics highlight the core issue and signify a colossal shakeup in the world of CPG both online and offline. Only last month, Loop by Terracycle announced its partnership with Tesco, heralding the start of change with Unilever, PepsiCo, Mondolēz and Mars among others. The goal being to introduce reusable packaging for consumers and pave the way for other retailers and brands to follow.
Loop challenges the way consumers think of CPG products; its USP is that the packaging is merely a borrowed container. Once the product is used it is professionally cleaned, refilled and returned to another consumer to begin this lifecycle again. Cleverly, they have understood the relationship between online and offline, allowing consumers to schedule a free collection of their products online. The company is also working on the functionality of allowing consumers to drop off their used vessels at drop-off points when next in-store.
But it’s not just Loop that is developing sustainable packaging. Diageo will be launching the world’s first fully recyclable paper spirits bottle for Johnnie Walker, made from wood pulp. Similarly, Unilever and PepsiCo are also anticipated to launch comparable packaging next year. Such actions suggest that CPG brands are taking the need to reduce plastic seriously, not only for moral reasons but also to ensure consumers retain brand loyalty.
The importance of this shift has been reinforced by a global survey conducted by Accenture in 2019. Within the study, 83% of those surveyed said they felt it ‘important or extremely important’ for companies to design environmentally friendly products with 77% stating they felt plastic was the least responsible packaging.
CPG brands, however, are not the only ones making changes to their approach to sustainability. In 2019, Amazon launched a recyclable mailer, which is not only made from products that are fully recyclable, but the implementation of this new packaging ensures sustainability throughout the supply chain. Instead of items being packaged in large boxes, some are now packed in the recyclable mailer meaning more items can fit in the transportation vehicle. In turn, this results in fewer deliveries and less fuel consumed. In fact, Jeff Bezos has committed $10bn to the Bezos Earth Fund, an initiative that aims to ‘preserve and protect the natural world’.
So, what should brands be doing? The most important thing is to get ahead of the curve and make changes now – it is crucial to be a leader for change in order to stimulate future growth. But here are our top three tips:
1. Think big. Innovation is something that step changes the business and changes such as these will impact other areas such as the supply chain. When planning innovation consider all touch points and develop a clear vision.
2. Build a roadmap. Take a streamlined approach, audit your e-commerce business and define clear opportunities. For example, you may find implementing changes to packaging on the top 20 ASINS/SKUs based on revenue is more beneficial to the business and allows you to take a Test & Learn approach before initiating a full roll out.
3. Collaborate. The key to success is to research and understand what other brands have done previously. Understand what worked well and what did not, collaborate with non-competing companies and use the brightest minds in the eCommerce business to unlock innovative ideas and solutions at scale.
To be a ‘first mover’ with something that fulfils a consumer need or desire is incredibly powerful, the murmurs we are already hearing and seeing in sustainable packaging are signalling future changes. Not only that, but this movement echoes the e-commerce revolution that took place in the 2010’s. The brands that did not immediately understand the implications for their business model, faced a much greater feat in trying to evolve at a later stage, often when their competitors had already understood the importance of e-commerce and ramped up their online presence significantly.
The changes made so far on sustainable packaging are just the start of the consumer challenging what is truly possible. It has never been more important for retailers to hold their audience at the heart of what they do. Similarly, CPG brands will have to navigate a world that is both focused on e-commerce but simultaneously preoccupied with innovation to support sustainable consumerism.
Lucy Hawkes is regional e-commerce director, OMG Transact.
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