Knowing ecommerce packaging costs can free design creativity

By Lisa McTigue Pierce in Packaging Design on February 27, 2018

As a packaging developer or designer, you’re probably already familiar with the cycle of new package introductions and the inevitable optimization process, where you have to reduce the number of stock-keeping units (SKUs). The growth of ecommerce sales adds another channel, with unique packaging demands. Should you create a separate package or rework one you already have?

Michael Gorges, managing director for North America and Asia at More from Less, will present “When is it Time to Make the Move to an Omni-Channel Pack?” at the 2018 TransPack Forum (Mar. 20-23, San Diego, CA), organized by the Intl. Safe Transit Assn. (ISTA). Ecommerce packaging is a particular area of expertise for the company. Last year, More from Less presented in a successful webinar for Packaging Digest on “Ecommerce Packaging: A Step-by-Step Guide to Getting it Right from the Start”, which you can view on-demand.

Here is a taste of what attendees will hear from Gorges at the upcoming TransPack Forum:

 

How easy or hard is it to calculate the total cost of an omni-channel package and why?

Gorges: The difficulty or challenge to establish the total cost of omni-channel packaging is not calculating the direct costs—such as packaging, freight/logistics and warehouse handling—but with the indirect or “unseen” costs. The real challenge is determining these costs, as they are often poorly tracked.

Most often these costs are things like damages and returns. Most organizations do not have the granularity necessary to understand where and how damage occurs, never mind to what degree a well-designed omni-channel package reduce these costs.

Equally important, if not more so, how will a well-designed omni-channel package improve the customer experience and extend the brand promise? In many cases, the only way to get at this information is with a combination of a thorough supply chain touchpoint audit, methodical testing and a rigorous pilot program.

 

Why should brands take the time and effort to analyze the total cost of an omni-channel package?

Gorges: Most importantly, research and analysis shows, customers are demanding more and more ecommerce access to your products. Online shopping is a fast moving and growing marketplace. You may not understand options available and costs associated with omni-channel packaging, but rest assured your competitors are already on with the journey, or at a minimum, have started working on it.

There is no silver bullet out there, though. This is a complex challenge, with numerous unknowns and conflicting data.

However, don’t let this paralyze you or your organization into doing nothing. You need to research and develop a plan, at the center of which should be a well thought out data collection process. You may not have all the answers today, they may not be easy to find. But as it relates to better packaging solutions, put yourself in a position so that six months from now you will be in a better position to answer questions with greater certainty.

 

What are the benefits of an omni-channel package?

Gorges: The ultimate goal of packaging does not change regardless of where or how it is being used. Omni-channel package or not, delivering the brand promise at the lowest supply chain cost is the fundamental ambition.

In its simplest form, companies have three basic packaging options when managing their omni-channels:

1. A single-channel SKU that is re-packed for each channel—that is, a brick-and-mortar (B&M) SKU that is over-boxed for ecomm.

2. Multiple SKUs—that is, one SKU for your B&M channel and a second SKU for your ecomm channel.

3. An omni-channel packaged SKU.

Depending on the product, the channel mix and speed-to-market requirements, you will need to select one of the above. In doing so, it’s highly likely you will need to make a cost or branding compromise. Theoretical at least, a well-designed omni-channel package will not require you to make any compromises.

 

What are the challenges of an omni-channel package design?

Gorges: There are two main challenges when designing an omni-channel package.

Firstly, to ensure a consistent brand and customer experience. A statement of the obvious maybe, however, it’s worth emphasizing that the B&M buying process is dramatically different to the ecommerce buying process. Developing a package that will effectively communicate your brand promise and provide a consistent customer experience across multi-channels is an extremely high bar.

Secondly, the requirements of a traditional B&M package are well established and understood, due to the better part of 100 years’ experience understanding and perfecting the B&M solution. Ecommerce and its associated supply chain processes are still in their infancy for more companies than you might imagine. Many organizations are still working to define their “base case” ecommerce supply chain.

Some organizations may understand where they are today, in relation to their ecommerce supply chain. However, it is extremely likely that this will change (in some cases dramatically) over the next 12 to 18 months creating further complications. Therefore, it is important to remember that this is a journey and not a destination. Commit yourself to innovating, trailing, learning and iterating. You will gain more knowledge and understanding with each step, while refining and improving your solution.

 

Are most brand owners moving toward separate packaging for products sold via ecommerce or are they trying to simplify or prevent SKU proliferation as the number of outlets keeps rising?

Gorges: It’s too early for such a vast market to indicate any clear or obvious trends. At this stage, most organizations are still on a path of discovery and learning. We have observed brand owners experimenting in creative and innovative ways, to improve their understanding of what is and isn’t working.

 

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It’s great to come across a blog every once.. Thanks for sharing.