Online shopping has forever changed the rules of the game in international commerce. It is over 20 years since Jeff Bezos opened an online bookstore from a garage. Now we are already talking about “the Amazon effect”, that is, the powerful impact of (undoubtedly) the largest online store on supply chain, logistics and packaging.
Any Product, Now A Click Away
Ecommerce websites with integrated online payment systems have made it simpler than ever for any person, from any corner of the planet, to purchase products. These products can be advertised on a local website, but the actual stocks are kept in various warehouses and distribution hubs in strategic positions across the continents.
More than ever, reliable packaging materials, seamless supply chains and clearly defined and implemented logistic processes make the difference between success and failure. Merchandize is expected to be packaged and shipped with a moment’s notice and arrive exactly on time, fulfilling the “same day” or “next day” delivery promises used by online retailers to attract customers.
Damaged Products – a Huge Damper on Future Transactions
However, in the mad dash to deliver more products faster than ever to more and more distant corners of the planet has its negative consequence: when old habits need to adapt to new requirements, there are bound to be frictions in the delivery process, resulting in damaged goods.
These old habits are usually related to the use of traditional packaging materials, traditional supply chain and traditional handling and storage facilities and policies. Tradition, from this point of view, is doing the distribution and retail industry no favors.
During the Packaging Conference 2016 held in Tampa, Florida, USA, one of the featured speakers presented the results of a survey on the impact of receiving damaged products on the decision to continue purchasing from the same retailer. Thus, nearly 83% of the participants to the survey claimed that they received damaged products on various occasions. As a result of this experience, over 58% of them were “somewhat unlikely” to purchase from the same online store again, while over 15% were “extremely unlikely” repeat the purchase.
The Ideal Packaging for Online Shopping: Modular, Branded, Adequate for Intensive Use
When it comes to actual packaging materials, online shopping has changed the expectations and best practices across all industries. From individual packaging to long distance containers and crates, there is an increased demand for branded items which personalize the purchase experience and increase brand loyalty.
Thus, packaging companies are expected to deliver packaging materials in a wide range of colors and to offer the possibility of customizing them by printing or hot stamping the logo of the company.
Also, given the intense use of packaging materials, these should have a modular build, allowing the quick and affordable replacement of damaged parts, instead of purchasing an entirely new product.
In terms of intensive use, packaging materials are expected to be easy to clean and sanitize, in order to be returned to a new usage cycle as quickly as possible. At the same time, the average useful life for each category of product has increased over time – both large retailers and smaller delivery companies having higher demands in terms of the reliability of their stock of packaging materials.
New Logistic Challenges: Increased Automation, Integration and Coordination
On many occasions, preparing a single order originating on an ecommerce website involves getting individual products from various warehouses, grouping them in a single package and completing the delivery within the term promised by the online retailer. At the same time, customers expect to have the ability to monitor their order during all phases since placing the order and until they receive the products.
In terms of logistics, these new demand mean:
- Increased automation in merchandize handling in warehouses and distribution hubs;
- Real time communication between regional warehouses and the central office;
- Closer monitoring of entry and exit of stocks, both at micro and macro level across manufacturing and distribution companies;
- Complete integration of all the above activities in a user friendly, flexible and secure IT platform.
In conclusion, online shopping is the latest, but certainly not the last challenge faced by logistics and packaging companies worldwide. Once the novelty of these increased demands passes, it will be only another set of best practices across our industry.