Whether the purchase is a new smartphone, an expensive piece of jewellery or a pair of shoes, the way a product is packaged can be as important as the product itself. It is an essential element of the marketing mix, maintaining brand loyalty and driving an impulse purchase. Well designed packaging solutions also perform an increasingly important task in differentiation – one which can have a disproportionately positive effect in driving sales.
Alongside driving innovation and growth in other industries (such as retail and manufacturing for example), the packaging industry is robust and set for further expansion. The global market for industrial packaging is forecast to reach $61 billion by 2020, says Smithers Pira, with the total digital package and label printing market growing at a compelling rate of 20% CAGR between 2014 and 2024.
More than any other kind of printing, package printing is also the one most closely linked to consumer behaviour. It is not only a communicator of a brand’s overall message but it is also a crucial step in a customers’ decision-making process instore. Packaging sells products. With this in mind, it is imperative that the packaging industry and the print service providers that support it are innovative, not just to match consumer demand but to drive it.
Current packaging and technology innovations are such that it is not impossible to conceive a future consumer shopping experience that will include walking into a store within which packaging of certain products will suddenly light up to remind us that we may be running low on our favourite items. Indeed, so-called ‘smart packaging’ is a huge innovation driver for the packaging industry.
The global market for smart packaging is expected to reach $39.7 billion, growing at a CAGR of 4.8% from 2014 to 2020, which is well above total packaging demand growth. The opportunities it presents are endless. Defined as a combination of active, intelligent, and modified atmosphere packaging techniques, it engages consumers at point of purchase, builds brand loyalty and supports up and cross-selling.
For example, smart packaging already provides functionality like moisture control but this can go one step further with innovations such as modified air packaging which will see food packaged with oxygen-free gases to prevent deterioration. Further in the future, smart packaging might also enable consumers to immediately tot up the nutritional value of a full basket of shopping, rather than just review an individual item.
But it is not just the retail and grocery landscape that is set to benefit from the growth of the packaging industry in the future. The rise of the Internet of Things (network connectivity of everyday objects) and advances in mobile computing, RFID, augmented reality and biosensors have increased the scope of packaging from something to simply protect a product to something to genuinely connect with consumers. Even in fields such as design and manufacturing, consumers can benefit from smart packaging innovation. For example, self build projects can be simplified enormously – imagine scanning a packaging barcode and seeing a 3D version of your planned build.
Smart packaging will also play an important role in safeguarding the expected growth of the high value packaging sector, which according to Pira will see more than a twelve-fold value increase between 2019 and 2024 when it will be valued at over $49.5 billion. For example, the labelling innovations for security and prevention of fraud alongside the ability to track high value goods from development to point of use should have a significant impact on the ability to generate fakes.
With consumer demand steering trends such as more promotional packs and brand extensions to ensure their loyalty, the packaging industry is set to be one of the most creative and innovative in the future. Advances in printing technology will break down previous barriers to packaging innovations. Consider the variety of textiles that can now be used and the increasing replacement of metal and glass by plastic. Increasingly we are seeing the high value market driving bespoke 3D packaging on a large scale with short runs and one-off designs, for example.
Digital print technologies will continue to enable the realisation of a number of creative packaging designs, particularly in the realms of customisation and personalisation and, as it continues to improve, digital print will support a wider range of applications such as the decoration of folding cartons, shrink sleeves and tube laminates. Estimated to be worth $7.3 billion in 2013, the digital print for packaging market is forecast to reach $15.3 billion by 2018 and advances in technology will continue to propel new items into the market more frequently and at a much faster pace than ever before.
As brands seek to provide new shapes, new materials, more colour, more distinctive and shorter runs to differentiate from the competition and attract consumers, the need for greater packaging variants and more versatile packaging techniques will increase. PSPs who are focused on the drivers of consumer spend will be perfectly placed to support this sector’s growth. We may even see the importance of the package overtaking the product in the future.