6 Statistics That Show the World is Ready for Connected Packaging
“The most profound technologies are those that disappear. They weave themselves into the fabric of everyday life until they are indistinguishable from it.” This quote from the late Mark Weiser, considered to be the father of ubiquitous computing, perfectly describes connected packaging’s potential.
Sometimes the best user experience is an invisible one. It’s taking care of tedious tasks behind the scenes, ordering products you need at just the right time, or giving the instructions only when needed. At Jabil we are working towards that seamless involvement in everyday life because we see it as the holy grail for connected consumer packaging.
Customer-centric product innovation holds the key to creating and sustaining long-lasting value. When companies focus on solving customer problems, they earn greater brand loyalty and broader market share. That's why every consumer product manufacturer across industry segments strives to optimize customer experiences, where they can showcase true differentiation.
The ability to elevate the customer experience is especially important in today’s digitally saturated world. While Fast-Moving Consumer Goods (FMCG) companies have historically made major R&D investments in their brick & mortar strategy, today’s consumer landscape has turned the world of packaging upside down. Buying decisions and customer loyalty are motivated more by convenience, value, and search rankings than by which product has a more compelling look and feel or boasts more bells and whistles.
From social media to smart homes, consumers are rapidly moving towards digital platforms that influence how they buy and use products. Therefore, FMCG brands need to take the opportunities that are offered by digital tools, the Internet of Things (IoT) and connected devices in order to a) create better, transformational experiences for their consumers; b) to achieve a more direct connection with consumers; and c) to understand more clearly how consumers use their products. The customer acquisition funnel looks very different than it did three years ago, but FMCGs are lagging behind consumers and their adoption of digital tools.
The future is coming into greater focus for connected packaging to strengthen relationships between brands and consumers. How do consumers view this brand evolution? How do they feel about new innovations like auto-replenishment and home inventory management? In what ways do consumers prefer to interact with product brands and how can technology enable this?
To better understand where consumers stand in this digital landscape, Jabil partnered with Dimensional Research to survey more than 1,000 U.S. consumers responsible for purchasing a significant portion of their household’s staple goods. Download the full survey report.
Here are six of the top takeaways on evolving consumer attitudes and perceptions around connected packaging:
1. Subscription Service Usage is Growing Quickly
While less than half (46%) of respondents say they have purchased household staples using a subscription, the most common goods they purchase include personal care, pet care and food and beverage products.
However, pet owners and households with infants have an entirely different mindset. More than half of participants with pets, which represent 70% of all respondents, say they purchase household staples through subscription services and that pet care products top their list. Similarly, 78% of households with infants purchase through subscription services.
Nearly two-thirds of participants say that they have been using subscription services for at least two years. In fact, almost half of these consumers say their subscription service use for household staples have increased just in the past year, indicating future growth for the concept. Furthermore, 75% of those who don’t currently have subscription services for household staples say they are open to purchasing these services in the future.
Subscription services are one way to design a customer experience that places convenience front and center. In fact, convenience translates into habit-forming behavior. Neurological research suggests that "the mind loves automaticity more than just about anything else—certainly more than engaging in conscious consideration. Given a choice, it would like to do the same things over and over again," according to the Harvard Business Review (HBR).
For the same reasons that we take the same route to work every day, consistently purchase our favorite latte or keep the same friends over the years, we are likely to purchase the same products over and over. As long as the action or intended product consistently fulfills the customer's expectations, buying the same thing is the easier thing to do. It helps the decision-maker avoid having to make another choice.
"Every time you buy another unit of the brand in question, you make it easier to do—for which the mind applauds you," according to the same HBR article. This builds customer loyalty.
Knowing the psychology behind "customer loyalty" (or simply, purchasing habits), how can brands reduce friction for consumers and encourage repeat purchases?
2. Auto-replenishment Is the Natural Evolution of Subscription Services
With recent advancements in technology, FMCG brands are exploring opportunities to develop more meaningful relationships with their consumers. By gathering data and analyzing the behaviors of users, a streamlined consumer journey can be built.
Following the initial purchase of a product or brand, the first two steps of the customer journey (learning and selecting) could be eliminated. For that to happen, a brand needs to excel in two areas: 1) the value proposition to attract and retain the customer and 2) a system where the built habit can be repeated with even more convenience than before.
When it comes to a customer's choices, any company can benefit by making the "routine choices easier, faster, and more convenient," Professor of Management at the Columbia Business School Rita Gunther McGrath writes. With this idea in mind, brands have a tremendous opportunity to utilize auto-replenishment to free up consumers’ mental space, eliminate re-purchasing friction, and improve customer retention and wallet share.
Auto-replenishment detects, at point of use, when a consumer is running low on a product, and automatically orders more. With the concept of auto-replenishment being so new, it’s not surprising that only 17% of participants say they use auto-replenishment services for household staples. The most common users tend to be millennial males in households with higher incomes. They are also more likely to have children and own a smart speaker. In addition, 72% of those who use auto-replenishment today say they like the convenience best out of any other benefit.
Although most participants say they don’t currently use auto-replenishment services, 63% say they are interested in these types of services, especially in these categories:
- Home care products (detergent, cleaning products, air care, etc.)
- Personal care products (skin care, shampoo, shaving, etc.)
- Pet care products (food, litter, medication, etc.)
- Infant care (diapers, wipes, formula, etc.)
Once again, when we look specifically to pet owners, pet care goods top their list of items best fit for auto-replenishment services.
3. Consumers are More Comfortable with Consumption Sensors Than Voice Assistants
Low-cost sensors and connectivity are the bread and butter of auto-replenishment. When embedded in packaging or simple devices, these digital enablers can track the use of household goods and other essential household items.
For example, these technologies can measure levels of liquids, bulk solids or moist wipes inside a container to determine when replenishment is in order. The consumer benefits directly from this, because they never have to "remember" if they still have enough laundry detergent or body wash for the next load of laundry or shower. Ordering processes can either be automated or presented to the consumer to approve the purchase.
According to the Jabil survey, consumers are slightly more comfortable with consumption sensors that track the consumption of household staples for auto-replenishment than using voice assistants. Nearly half (49%) of participants say they are very concerned about the privacy of voice assistants while that number drops to 39% with consumption sensors.
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4. Consumers Want Brands to Deliver Value Beyond the Product
Consumers are expecting more from their product experiences than ever before. They expect to bring products that are chemical-conscious into their home. They expect companies to respond quickly to their feedback. They expect that online purchases won’t arrive with excessive boxes and packaging that’s damaging to the environment.
We’ve seen a lot of great innovation in FMCG to deliver products that make household maintenance easier, which has set the stage for consumers to have very high expectations for even commodity products they buy every day.
With growing access for people to communicate and interact with consumer brands, there are some clear advantages. Participants to the Jabil survey say they enjoy better pricing through coupons and promotions, that they can learn interesting and useful information about the product as well as receiving ideas to make the most out of the products they purchase.
Similarly, there are some downsides. Nearly half of participants say they don’t like getting spammed with irrelevant information, feeling like the brand doesn’t actually want to help the consumer and that it is too hard to stop or reduce the level of communication with brands.
In many ways, auto-replenishment can be the cure to these issues. The capacity for digital technology and connected packaging to deliver useful and timely information, while minimizing headaches, will be a huge improvement to the product experience. In fact, connected packaging will enable a whole new level of direct-to-consumer communications.
Direct-to-consumer communications tools, integrated with connected packaging formats, radically improve the customer experience while creating entirely new engagement opportunities for marketing teams. For example, you will be able to reignite fading users with a well-timed coupon or stimulate new users with recipe ideas and hacks simply because the data will be at your fingertips.
5. Consumers Find Home Inventory Management Useful
One of the most exciting aspects of connected packaging is that it can transform the user experience beyond purchase and use, linking up with smart home ecosystems to provide consumers with more information.
FMCGs will soon be able to fuse data from different durable devices and primary packages to really understand how consumers are using their products inside the home. One potential benefit is enabling home inventory management, so consumers always have visibility into what they need and what they already own.
An overwhelming majority of participants in the Jabil survey say they have mistakenly bought things they’ve already owned in the past. Nearly four in 10 say they do this on a monthly basis. That’s why 92% say they would find a live list of what they own useful when they are out shopping. More than six in 10 participants say they would prefer an app that tracks the items they use most frequently.
6. Consumers Understand that User Data Helps Create Better Products
Connected packaging ecosystems are creating invaluable opportunities for FMCG brands to understand the context and details of both product use and consumer lifestyles. Of course, all the roads lead to data and consumers understand that. In fact, 91% of consumers understand that use data helps brands create better products.
If FMCG brands could better understand exactly how consumers use their products, they could deliver better user experiences. After all, who likes to deal with the cognitive overhead of keeping household item lists in your brain, when you could be spending more time on things that bring you joy?
That’s why more than six in 10 participants say they don’t mind if companies collect data on how they use products—as long as the consumer is aware of how the data will be used. In addition, these consumers say they don’t mind the data collection if FMCG brands are using it to improve the products.
The future is wide open for the possibilities of digital packaging. What it allows, fundamentally, is the delivery of content and the creation of a direct relationship between the brand and consumer—something none of us had really had the capability to provide before.
FMCG brands are aware of this shift and interested in responding to it accordingly. They are interested in delivering new and enhanced customer experiences. But the challenge at this stage is the convergence between packaged goods and technology. The opportunity of transforming packaged goods to deliver more value than ever before—to weave them into the fabric of everyday life so they are indistinguishable from it—now, that’s priceless.
Download the 2020 Connected Packaging Survey Report
Insights from over 1,000 U.S. consumers on their perceptions and attitudes on connected packaging, subscription services, auto-replenishment, data privacy and more.