Capitalizing on omnichannel e-commerce with AI: Data, opportunities and challenges

11 Aug 2023 --- Omnichannel retail and e-commerce are becoming ever present in the takeaway food delivery market, leading the packaging industry to add new solutions to adapt to the changing environment.

Omnichannel marketing communicates what has been purchased before and makes suggestions based on that information. Packagers and restaurant brands can use this information to cater to their consumers and give the solutions most applicable.

Innova Market Insights found in 2022 that the COVID-19 pandemic had influenced consumers’ home food delivery behavior. Twenty-two percent of global consumers say food delivery increased slightly, and 14% indicated it had risen “greatly.”

Packaging Insights speaks to Martin Kersh, executive director of the Foodservice Packaging Association and an EcoPackables spokesperson, about the shift in omnichannel e-commerce and how the packaging industry can capitalize on the changing space while using AI technology.

EcoPackables reports it has found that the data-driven insights that omnichannel retail presents are one of the most significant growth areas.

Innova Market Insights found in 2022 that the COVID-19 pandemic boosted consumers’ home food delivery behavior.

“Collecting data from various channels allows you to gain valuable insights into customer behavior, preferences and trends. This data can inform your marketing strategies, inventory management and product offerings, leading to more informed business decisions. We expect to see a variety of analytics tools built for e-commerce brands to help leverage these insights,” says the EcoPackables spokesperson.

New foodservice approaches
Kersh says there is a considerable variation in packaging and foodservice solutions. He critiques restaurants and the packaging industry that “have barely scratched the surface – often just sticking with an online menu or catalog.”

“We have meal delivery portals, which enable independent restaurants and takeaways to benefit from an e-commerce omnichannel approach, which previously would have been out of reach to them – in terms of costs and human resources. This adds great value to being a member of a meal delivery hub.”

Kersh notes that omnichannel retail can remove some exclusivity and the opportunity to achieve a price premium. “But not all restaurants need to engage in an e-commerce omnichannel approach to be successful. Some have strategically decided to command a premium price by retaining exclusivity.”

Anna Rabanus, global category manager at SIG, previously told Packaging Insights: “Consumer interaction is no longer limited to a single channel. In 2020, omnichannel shopping jumped 50%. Going beyond e-commerce, omnichannel involves interacting with consumers wherever they are – be it online or offline – and delivering a consistent brand experience.”

“For F&B manufacturers, omnichannel retailing has its unique challenges. Dependency on retail partners for last-mile delivery means manufacturers have limited control. Providing a consistent brand experience across owned and third-party channels can also become difficult. Here, unifying channels like social media, websites, and the often-overlooked product packaging, can be a differentiator,” she explained.

More than just an e-commerce company
R.R. Donnelley & Sons Company (RRD) recently released its 2023 (Un)Packaging Reality Report, revealing that supply chains and market conditions in the US are stabilizing despite recent challenges.

The number of respondents seeing increased e-commerce orders increased slightly compared to last year’s report. Of the 60% of decision-makers citing an increase in e-commerce orders over the past year, the proportion who saw a rise in packaging needs (92%) remained consistent year-over-year. Additionally, 86% reported an increase in labeling needs.

Kersh also notes that most retailers, especially the major brands, fear missing out on a consumer base, making it a massive driver for implementing omnichannel retail.

“Aside from the obvious benefits of enhanced customer experience, increased sales and better retention, [omnichannel retail] can solidify brands as more than just an e-commerce company. The brands that will continue to win in the future will be able to leverage both digital and physical storefronts, effectively driving traffic to both,” adds the Ecopackables spokesperson. There is a considerable variation in packaging and foodservice solutions, finds Kersh.

Omnichannel growth and challenges
Regarding growth, Kersh thinks AI will “inevitably” play a part.

“With meal deliveries, the public is increasingly seeking a variety of choices. AI may make it possible to consider other factors, such as holiday experiences, lifestyle, family size, TV and movie preferences, weather and demographics, to predict what a customer may be interested in ordering next.”

He continues that omnichannel marketing in partnership with AI could access what a consumer has been tempted by, for example, after seeing a movie. Kersh gives the anecdote that based on a film being watched, a different type of food experience can be suggested.

Kersh names some challenges with omnichannel retail: Cost, margins – which are currently declining – and knowledge.

He says it is possible that bigger brands can afford omnichannel retailing more easily while independent labels struggle to survive. However, he wonders if the industry will see new restaurant start-ups that apply omnichannel e-commerce retailing strategies from the outset and build their businesses around it.

By Sabine Waldeck

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