New research from Smithers suggests retail packaging will become a smart, low-carbon and automation-ready infrastructure layer by 2031.
Global retail was worth approximately US$29.2 trillion in 2025, with annual growth estimated at 3.8 per cent. Inflation, particularly food inflation, high interest rates and cost-of-living pressures are making consumers more price sensitive and selective in their spending, according to Smithers’ report The Impact of Retail Trends on Packaging to 2031.
Growth was strongest in value goods and essential items, while discretionary and luxury spending was weaker, the research shows.
Automation
Retail operations are transitioning towards automation across warehouses, micro-fulfilment centres and stores. Robotics, AI vision systems and automated picking require consistency, predictability and machine readability.
As retailers scale dark stores and micro-fulfilment, packaging is moving from a static asset to a data-rich component of the retail AI ecosystem, according to Smithers.
The rise of integrated smart packaging
Retail-integrated smart packaging is transforming the pack into a traceability tool, authentication device, and engagement platform. Brands and retailers that embed smart features, enabling image systems to capture information from packaging, will gain measurable lifts in loyalty and reduced counterfeiting.
Smart packaging is evolving into a powerful tool for traceability, authentication, and consumer engagement. Retailers and brands are embedding digital capabilities into packaging that allow image-recognition systems and connected technologies to capture and process information directly from packs.
This integrated approach helps combat counterfeiting, improves supply chain visibility, and creates new opportunities for customer engagement and loyalty. Companies that invest in intelligent packaging solutions are expected to gain measurable competitive advantages, while brands that continue to treat packaging as a purely functional element risk appearing outdated in an increasingly data-driven marketplace.
Sustainability and circularity
Environmental performance is becoming an important requirement for packaging design. Retail-led initiatives to reduce plastic use, the expansion of Extended Producer Responsibility (EPR) regulations, growing consumer scrutiny, and the emergence of reuse and refill models are driving change.
By 2031, packaging will be expected to demonstrate measurable circularity through increased recycled content, mono-material construction, refill-compatible formats, reusable systems and improved recyclability, while still meeting automation and protection requirements.
Sustainability strategies will focus on cost-efficient solutions such as lightweighting, mono-material packs and recyclable flexible packaging that reduce material use and EPR exposure.
Suppliers will also accelerate the use of fibre-based alternatives and next-generation mono-material laminates, according to the research.
Balancing value and premium appeal
Consumer purchasing behaviour is creating a dual challenge for packaging developers. Shoppers continue to seek value through everyday low pricing, private-label products and optimised pack sizes, while remaining willing to pay premiums for products that communicate quality, convenience and enhanced user experiences.
Packaging must therefore deliver cost-engineered simplicity for value tiers while offering premium tactile, visual and functional features, such as easy-open and resealable formats.
Managing costs while building resilience
Retailers continue to face inflationary pressures across labour, energy and logistics. At the same time, market consolidation, vertical integration and geopolitical uncertainty are encouraging companies to shorten supply chains and localise sourcing strategies.
In response, retailers are using their purchasing power to push for packaging simplification, regional manufacturing capabilities and efficiency improvements across the value chain.
This creates a dual requirement for packaging suppliers. Packaging must become more affordable through lighter-weight structures, reduced SKU complexity and regional sourcing, while also becoming more resilient, traceable and adaptable to supply chain disruptions.
The Impact of Retail Trends on Packaging to 2031 examines the impact of AI-driven forecasting, warehouse automation, EPR regulation, sustainability mandates and the convergence of physical and digital retail. The report includes forecasts segmented by retail type, end use and geography, with competitive analysis covering channels including direct-to-consumer, click-and-collect and home delivery.
Smithers said the report is based on primary research and provides insight into changing demand across the retail packaging market.
