No Label, No Problem? Retail Dynamics of Label-Free Bottles

<p><i><span>Problem definition</span></i><span>: Label-free packaging has emerged as a sustainability-oriented product redesign that reduces material use per unit and is widely regarded as a promising strategy for improving the environmental efficiency of plastic bottle production. However, its impact on consumer demand remains largely unexplored. Such interventions may induce unintended behavioral responses—shifting demand across products, expanding overall consumption, or reducing it—particularly when label-free and labeled products coexist across offline and online channels. These considerations suggest that demand effects are likely heterogeneous and context-dependent, highlighting the need for rigorous quantitative evidence. <i>Methodology/results</i>: We address this question using large-scale consumer transaction data, leveraging propensity score matching and a difference-in-differences framework to compare purchasing behavior before and after label-free adoption across retail channels. We find that adoption increases total bottled water consumption by approximately three bottles per month, driven by label-free products with no corresponding decrease in labeled bottles, suggesting market expansion rather than substitution. This effect is heterogeneous across retail channels and brand types: gains for national brands are concentrated in online and supermarket channels, while private brands experience more pronounced increases in hypermarkets. Furthermore, the increase in purchases is observed among both new entrants and existing users, suggesting that label-free adoption complements rather than cannibalizes existing consumption.<i> Managerial implications</i>: Although label-free packaging is expected to reduce environmental footprint, it may also alter demand and competitive dynamics across retail channels and brand types in unintended ways. Without sufficient market penetration, limited accessibility of label-free offerings and persistent consumer inertia toward labeled products may cause label-free products to generate incremental rather than substitutive demand, potentially increasing overall resource consumption. These findings suggest that early label-free adoption may stimulate overall plastic consumption through a green paradox or convenience effect, highlighting the need for careful policy design beyond mere labeling mandates.</span></p>