Millennials and Gen Z are set to become the consumers that luxury packaging developers need to pay the most attention to over the coming years
Over the next few years, packaging companies in the luxury sector need to make sure they’re in the best position to deal with the next generation of consumers.
Millennials – individuals who were born between 1981 and 1996 – currently represent around 32% of this market and have been predominantly driving its change.
And this is only going to increase as, by 2025, those consumers will make up 50% of this sector.
Gen Z – those born between 1997 and 2010 – are also set to be a significant player in this area, and are on track to represent 8% of the luxury market by the end of 2020.
Speaking at Packaging Innovations’ 2020 Discovery Day, alcoholic beverages firm Absolut Company’s innovation director of future packaging Niclas Appelquist added: “Both these groups’ expectations of luxury brands are different from previous generations.
“This must be viewed as a positive, so it presents an opportunity and a lot of potential for the business.”
NS Packaging investigates the work that some packaging companies can do to best prepare for this new generation of luxury consumers.
Importance of sustainable packaging to luxury consumers
In December 2019, customer-centric merchandising platform First Insight conducted a study titled The State of Consumer Spending: Gen Z Shoppers Demand Sustainable Retail.
It notes that 62% of Gen Z customers prefer to buy from sustainable brands, on par with its findings for Millennials.
In addition to this, 54% of Gen Z consumers are willing to spend an incremental 10% or more on sustainable products, with this being the case for 50% of Millennials.
This compares to 34% of Generation X – people born between 1965 and 1980 – and 23% of Baby Boomers – people born between 1946 and 1964.
As such, the next generation of consumers are more likely to buy products that are environmentally conscious.
Appelquest believes the luxury industry has “all the credentials” to take a lead on this part of the sustainability conversation.
He explained: “A focus on handcrafted products made slowly and with high-quality materials means luxury products can last a lifetime, reducing waste and protecting our environment.
“So with a heightened awareness around climate issues, consumers are no longer willing to accept unsustainable practices and will actively disassociate from brands.”
One luxury company making strides in this space is fashion house Stella McCartney, which in 2017 switched to an eco-friendly packaging supplier.
In order to fulfill its ongoing commitment to sustainability, the brand turned to Israeli start-up developer and manufacturer TIPA, which develops bio-based, fully compostable packaging solutions.
The company at the time announced that it would convert all industrial cast film packaging to the TIPA plastic – which is designed to break down in compost.
As part of this, the envelopes for guest invitations to Stella McCartney’s summer 2018 fashion show were made by TIPA using the same process as the compostable plastic cast film.
The company is also part of the environmental organisation Canopy’s Pack4Good Initiative, and has committed to ensuring the paper-based packaging it uses does not include fibre sourced from ancient and endangered forests by the end of 2020.
It also sees the firm source fibre from Forest Stewardship Council-certified forests, including any plantation fibre, when recycled and agricultural residue fibre is unattainable.
Another example of sustainability in the luxury packaging is Rā, which is a concrete pendant lamp made entirely from demolished and recycled industrial waste.
The tray holding the pendant is made from compostable bamboo, while the outer packaging has been developed with recycled paper.
How to create a luxurious experience through good packaging design
A challenge hitting the packaging market in the coming years is how to keep its products luxurious whilst making sure they’re sustainable.
One issue is that typically the heavier the product is, the more luxurious it’s considered.
Appelquist explained: “Research carried out by the University of Oxford’s professor of experimental psychology Charles Spence found that adding a small weight to everything from a small box of chocolate to fizzy drinks results in people rating the contents as being of higher quality.
“It even impacts our perception of scent, as the research showed a 15% increase in perceived fragrance intensity when for example handwashing solutions were presented in a heavier container.
“This is a particularly interesting challenge for designers, given that recent moves towards lightweighting and even eliminating product packaging wherever possible.”
In order to address this, a number of researchers are currently trying to figure out whether they can use other cues such as colour to give a psychological perception of the weight of their packaging.
This is mainly because studies over the years have demonstrated that white and yellow objects tend to feel lighter than black or red ones of equivalent weights.
Sensory packaging experiences are also seen as luxurious, with one company being incredibly involved in this space being Apple.
The tech company is traditionally known for creating such a sensory experience because it makes its packaging as artistic and visually appealing as possible.
Appelquist explained: “Apple is known for creating packaging to be an extension of the tech within – smooth, simple and intuitive.
“We know that opening an Apple box is a truly sensory experience – it’s slow and seamless, and it has a devoted fan base.
“In conclusion, it seems that taking a holistic and multi-sensory approach to the design of the packaging is a way forward in designing our future sustainable luxury packaging successfully.”