| By Alex Turner | Consultant, Packaging | Chainalytics |
With e-commerce climbing to the top of everyone’s agenda, marketplace challenges now dictate that you ask yourself if your product can withstand the vigorous distribution environment that comes with the omni-channel experience. With LTL shipments and doorstep deliveries at an all-time high, it is time to evaluate your packaging strategy to prepare for the thriving e-commerce market. Here are a few key reasons why packaging plays a key role in e-commerce success.
Packaging and its role in e-commerce
Through e-commerce, packaging no longer promotes a sale through the first “moment of truth” in the online store. Packaging’s new role now delivers the product, brand, and experience associated with purchasing a new product. Consumer habits are changing and many shoppers have already researched the product prior to clicking “add to cart.” Without ever stepping into a store, the sale has already been made, and it is time for the packaging to do the leg work.
With increased emphasis on home delivery, it is imperative for the product to arrive at your doorstep intact and on-time, and any product arriving damaged instantly blemishes your brand’s image. Designing the correct packaging system to protect your merchandise through the supply chain journey is challenging but crucial. As leaving customers with a damaged product opens a whole set of issues that fall squarely on the shoulders of the organization itself.
For starters, the immediate impact on customer satisfaction or, in this case, dissatisfaction must be considered at all times. Forcing a customer to take the time to re-pack the item, print a label and return the package back to the company, only to have nothing in the end is very tedious and frustrating. Who knows if the customer will want to purchase from that brand again with such a negative experience. Not only is the customer disappointed but inconvenienced as well, something no organization can afford in today’s marketplace.
Secondly, once the return has been made, costs associated with that return start to add up, Including labor costs for processing as well as disposal of the damaged product and packaging from that return. A single damaged product results in an unhappy customer and can cost the company selling that product additional clients with a single bad review. As your star rating begins to drop, so will your revenue stream.
To get ahead of any potential damage issues, there are numerous packaging testing standards and protocols an organization can utilize to test packaging performance, such as the ISTA 6 Amazon. Using this test protocol and achieving the Amazon certification can score you better shipping rates and provide the assurance that your packaging will withstand the distribution environment. Packaging material selection and packaging design is crucial for this aspect of e-commerce. When selecting your packaging strategy, it’s important to design for the environment in which it will be shipped and never choose appearance over performance, for no good comes from a damaged product.
The Real Cost of Damage
Packaging has long been used to promote a brand’s identity and core values. Countless uses of unique shapes and materials, high quality printing, and distinctive design have allowed brands to differentiate themselves within the sea of sameness you find on today’s shelves. But with e-commerce, much of the traditional advertising associated with primary packaging goes out the window, so now your transport packaging must now make the difference between a one time purchase and a forever customer.
Today’s conscious online shopper will take note of several factors that help build a relationship with a brand. Some of these factors include questions such as: Was it optimally packed? Were the packing materials sustainable? How difficult was the package to open? Did my product arrive the way I anticipated? And lastly, was this process a positive experience? In order to express your brand’s core values to the customer, the packaging needs to ensure all these questions receive positive answers.
Furthermore, the use of sustainable materials in your packaging strategy can tell the customer that your company has a motive to drive eco-friendly practices. In addition to sustainable design, using standard pack sizes to optimize your dimensional weight for e-commerce deliveries can be very appealing to the customers receiving the product, while saving you money in shipping costs and warehouse space on the front end. It can be confusing, perhaps even unpleasant, to receive your product in a shipper that is 2-3 times larger than the product itself, resulting in a bunch of additional packaging requiring disposal.
With more and more retailers investing in their omni channel operations, maintaining customer loyalty is becoming increasingly difficult, and a single mishap can lead lost opportunities in the development of an established customer base. Organizations should utilize the multitude of test protocol resources available, as well as the expertise of experienced packaging engineers, to assess their packaging strategy and ensure they are delivering a positive e-commerce experience that promotes brand loyalty and repeat customers.
Alex Turner is a Consultant in the Packaging Optimization competency at Chainalytics. In his role, he provides end-to-end engineering support for packaging optimization projects, working to help our clients improve supply chain costs and reduce product damage.
Read more on how the Packaging Optimization team has helped drive supply chain improvements:
- (Blog) Three Tips to Drive Cost Savings Through Your Packaging Strategy
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- (Blog) Blockchain & Packaging: How Can Technology Improve a Supply Chain’s Packaging Strategy?
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