The commoditization of consumer electronics products and its influence on packaging design

Abstract

The traditional purpose of packaging for consumer electronics (CE) products was to get them in one piece from the factory to the consumers home. It was purely focused on the physical distribution. In that time, buying a CE product could be considered a major family investment. However, times have changed, as nowadays a trend of commoditization can be observed in the market of consumer electronics products. Commoditization is the transformation of a noncommodity product into a commodity. A commodity is a product where consumers perceive no difference between the offerings of different suppliers or manufacturers, other than price. Strictly speaking, CE products may currently not be a true commodity; however the term commoditization can be said to describe a process in which CE goods become more and more like daily supermarket purchases. The term commoditization is widely used in literature. A commoditized product is characterized by low-margins, high competition and low importance of brands. This is an unfavorable situation for OEMs, as non-commodity products have higher margins. To be a non-commodity, products need to have some characteristics that make them stand out. This can apply to an entire product category or just specific brands. This development has resulted in two changes in packaging design. For the commoditized goods the packaging has become more important as the silent salesman, just like Fast Moving Consumer Goods. For non-commoditized goods packaging has become more important in communicating the brand experience, hence also moving away from the original focus on protection during physical distribution. This paper describes part of a larger PhD project on sustainable packaging for durable goods, which focused strongly on transport optimization through volume minimization. This paper will analyze the process of commoditization, the coinciding changes in the retailing of CE products, and the resulting changes in packaging functionality. To describe the commoditization process several empirical studies will be presented; the change in retail will be described using (historical) literature; the change in packaging design will be described using observations of actual packages in the market.