As competition grows and consumer preferences shift in today’s global economy, consumer packaged goods (CPG) leaders need to constantly adapt and innovate to stay ahead.
Meeting consumer demand for convenience and sustainability requires new plays. Progressive brands and retailers are embracing in-home smart replenishment using connected refillable packaging, a solution that has huge potential to satisfy all of these priorities.
Connected packaging enables smart in-home refill solutions that automatically order and deliver products when they are running low, based on actual consumption, vs. scheduled delivery, as with most subscription services. Consumers can easily setup a reorder all sorts of staple goods such as coffee, dog food, detergent, and more – and it arrives when it is actually needed.
Progressive brands and retailers are embracing in-home smart replenishment using connected refillable packaging.
Why Sustainability is a Top Priority
Demand for transparency in how a product is packaged and the preference for re-use, has become mainstream. As a results, consumer product brands are continually seeking innovative ways to reduce their carbon footprint while offering eco-friendly products that appeal to consumers.
Three factors are pushing sustainability to the forefront.
Demand from sustainability-conscious consumers
Consumers’ shopping preferences say a lot about the feel about protecting the environment:
In a 2020 McKinsey US consumer sentiment survey, more than 60% said they’d pay more for a product with sustainable packaging. (Source: McKinsey)
Another study by NielsenIQ found that 78% of US consumers say that a sustainable lifestyle is important to them. (Source: McKinsey)
Another study from Nielsen notes that 81% of consumers hold the opinion that environmental improvement programs by consumer goods companies is “extremely” or “very” important.
Competitive pressure
Progressive consumer-packaged goods companies have taken notice of the many brands succeeding that have a sustainable approach to their business.
New technologies
New technologies and the advancement of the circular economy are making sustainability not only worthwhile for business, communities and the planet overall, but also economical in terms of the efficiencies now possible.
What’s Next in Sustainability – Smart Refill / Reordering
Many brands have taken steps to implement sustainable packaging, through recyclable or reusable containers. This is a great first step, however, it is missing the ability to offer the product in an efficient manner.
The next level in sustainability is to understand how a product is consumed with a high level of accuracy through smart, connected packaging.
A reusable container with smart capabilities creates a circular chain of use system. One container with one smart label circulates back and forth between the brand and the consumer, on a predictive need-based platform.
In addition to convenience, consumers are also increasingly concerned about the environmental impact of their purchasing decisions. Whereas past efforts to increase sustainability typically resulted in poor customer reviews due to inconvenient tasks required by the consumer, smart packaging changes the relationship to the mutual benefit of the consumer and the brand.
The Promise of Smart Refill / Reuse Solutions
Smart at-home refill / subscription programs offer tremendous potential to decrease waste and improve the timing of product delivery.
Reusable packaging is a promising solution to waste reduction because it minimizes packaging and waste in a way that is directly seen and measurable by consumers. This in turn helps to instill environmentally friendly habits that create more positive outcomes over time.
For example, a personal care brand could use refillable packaging for their products and encourage customers to use the refill options through connected packaging. By promoting sustainable practices, businesses can appeal to environmentally conscious consumers and increase customer loyalty.
Smart reusable packages reduce the amount of material needed for each product, contributing to a more sustainable production process and reducing the amount of landfill waste.
Smart reordering boosts this benefit even more because the reuse is more precise. Refills are sent in environmentally friendly packaging at the best times for consumers to use them while improving the product’s environmental footprint.
Refillable packaging can significantly reduce the amount of single-use plastic waste produced. Rather than throwing away the entire product after use, the refillable packaging can be used multiple times.
Benefits of Smart Refill Solutions
Sustainability is a huge benefit, but it isn't the only reasons brands and consumers are embracing smart refilling and reordering. There several other reasons.
A More Reliable Revenue Stream
By creating a subscription-based service, CPG companies can ensure a steady supply of their products while also creating a recurring revenue stream.
Auto replenishment refill solutions using connected packaging enable CPG companies to turn their products into a service. By leveraging the power of connectivity and platform services, businesses can offer a continuous supply of their products to customers, eliminating the need for manual reordering. This not only enhances the customer experience but also opens up new business models for CPG companies.
Precise Post-Purchase Consumption Insights
One of the most significant benefits of smart connected packaging is the ability to gather data on how customers use your products. This data can be used to inform product innovation, as it provides insight into which features and functions are most important to customers.
Auto replenishment refill solutions using connected packaging provide an opportunity for CPG companies to engage with customers on a deeper level. By offering a service that simplifies the purchasing process and meets the needs of customers in real-time, businesses can build stronger relationships with their customers. This can lead to increased loyalty and repeat business, creating a virtuous cycle that benefits both the business and the customer.
Improved Inventory Management
Smart in-home refill solutions provide real-time data on when customers need refills of your products. Refill data can be used to optimize inventory levels, ensuring that you always have the right products in stock. By improving inventory management, businesses can reduce costs and improve efficiency.
Improved Product Development
Knowing how customers actually use your products is a one of the biggest under-utilized sources of product innovation and marketing research. Most CPGs are already using traditional methods such as in-home user testing (IHUTs) for R&D and pre-launch testing. However, consumer self-reported data is dubious at best because of the gap between stated and actual usage data.
With real-time post-purchase consumption behavior monitoring, businesses have more accurate, precise and timely insights to match very specific, and potentially missed customer needs and preferences.For example, a cleaning product company could use consumption behavior data to develop a more effective formula or improve packaging design.
Boost Product Sales
Another benefit of smart connected packaging is the ability to increase product sales through refill. By offering refill options through connected packaging, customers can easily and conveniently purchase more of your products, leading to increased sales and revenue. This is especially true for products that are consumed regularly, such as health supplements or beauty products.
Improve Retention and Loyalty
By offering a personalized product experience and easy access to refills, customers are more likely to stick with your brand and become loyal customers. This creates a virtuous cycle where loyal customers purchase more products and provide valuable feedback, leading to further improvements and increased sales.
Personalized Product Experiences
Smart connected packaging provides a wealth of data on how customers use your products. This information can be used to offer personalized product experiences that better meet the needs and preferences of your customers. For example, a beauty brand could use consumption usage data to offer personalized skincare routines based on a customer's skin type and concerns. This creates a more tailored and relevant experience, which can lead to increased retention and loyalty.
A Win-Win for Brands and Consumers
All of this promises several benefits for brands and consumers alike.
Brands win.
For brands, auto-replenishment creates steadier revenue streams, and customers who automate their reordering tend to spend more over the long-term and stay more loyal. By tracking the usage of their products, CPG companies also gain valuable insights into customer behavior, preferences, and needs.
By offering smart in-home refill products, brands can demonstrate their commitment to sustainability and corporate social responsibility. This can help build brand loyalty and attract environmentally conscious customers.
Data collected from smart packaging consumption trackers can be used to optimize supply chain management, reducing waste and improving environmental resource efficiency.
Additionally, smart in-home refill products can reduce shipping and packaging, saving money on materials and shipping, and cutting production and transportation emissions at the same time. This can also help reduce shipping and storage costs, as refills take up less space than traditional single-use packaging – another potential source of environmental benefit.
Consumers win too.
As climate change gains more attention, consumers as well as businesses want to act in ways that reduce waste and protect the plant. Refill and reorder solutions provide environmental benefits because they allow for less single-use of plastics with more eco-friendly reorder containers.
Eco-friendly products are appealing to consumers as they increasingly become more environmentally conscious. By offering smart in-home refill options, brands can attract and retain these consumers who are looking for ways to reduce their carbon footprint. This also creates a competitive advantage for brands who prioritize sustainability as more consumers are actively seeking out eco-friendly products.
Consumers benefit from smart in-home refill options in several ways:
Cost savings: By purchasing refillable products, consumers can save money in the long run as they don't need to constantly purchase new products.
Convenience: Refillable products eliminate the need for consumers to go to the store to purchase new products. This is especially helpful for busy individuals who don't have time to constantly shop for household items.
Customization: Some smart in-home refill options can be customized to match individual preferences, such as fragrances or flavors. This creates a personalized experience for consumers, further enhancing brand loyalty.
By offering refillable products, CPG companies can help reduce single-use plastics and landfill waste, which can improve their brand image and appeal to eco-conscious consumers.
As the CPG industry continues to evolve, businesses that embrace these innovative technologies will be well-positioned for success in the years to come.
Smart connected packaging provides valuable consumption usage insights and data that can benefit CPG businesses in a variety of ways. From product innovation to personalized product experiences and improved supply chain management, the benefits of this technology are clear. As the CPG industry continues to evolve, businesses that embrace smart connected packaging will be well-positioned for success in the years to come.
Ready to Get Started With Smart Replenishment?
Smart replenishment presents an exciting shift in commerce for both brands and consumers. Brands benefit from better returns and a richer understanding of consumer behavior smart replenishment brings about the convenience that consumers crave.
At Adrich, we have a vision of products that reorder themselves and connect consumers, homes and brands sustainably.
Adrich is a consumer insights and smart replenishment platform powered by AI and IoT. Our goal is to help brands and retailers build better products, deepen consumer engagement and accelerate the adoption of refill consumables.
We are powering new levels of post-purchase consumer insights and smart auto-reordering solutions for the largest brands in the world with patented technology and e-commerce partnerships.
Would you like to see how smart replenishment can work for your business?
Get in touch for an overview and demo.