By Sean Webb on parcelindustry.com
The numbers tell the story of the potential of e-commerce. In 2019, online sales reached over $601 billion, accounting for 14.9% of retail sales. That figure is forecast to top $709 billion in 2020 to a staggering 18% of purchases in light of current events.
The importance of packaging, therefore, cannot be overestimated.
Peak shipping season. These three words can evoke excitement or stress for many retailers, and sometimes both. Shopping during this time of year can account for 40% of annual sales for retailers. This puts stress on ensuring inventory is in stock, e-commerce sites are ready to handle the influx in shoppers and warehouses are able to optimize fulfillment. While retailers will typically look to last year’s peak shipping season as a way to plan for the next year, 2020’s holiday shopping season is different.
Due to the COVID-19 pandemic and the brick and mortar store closures it caused, retailers have already experienced some peak shipping season sales this year. While at the time this was a stressful event managing reduced work forces and an influx of customer orders with little time to prepare, retailers can take these lessons learned and increase efficiencies ahead of the 2020 holiday season.
Some of these “areas for improvement” are new challenges that arose from COVID-19. Before the pandemic, retailers didn’t think about social distancing requirements or what would occur if warehouse labor was greatly reduced. Now, they must learn to adapt to these new challenges and new consumer demands that arose from the pandemic.
· Warehouse Labor: The world is full of unknowns right now. No one knows when life will return to “normal,” if ever. This means social distancing rules will continue to apply in the warehouse and retailers will also need to account for limited staff in case there is another outbreak around the 2020 holiday shipping season.
· Fast Order Fulfillment: For years, customers have grown accustomed to fast delivery. Two-day delivery was the norm while same-day was a luxury slowly turning into the standard. With the recent pandemic, shoppers now understand that some items – those considered nonessential – may take longer to ship. While this has certainly helped alleviate this pain point for retailers, customer satisfaction is still a top priority.
· Sustainability: COVID-19 has brightened everyone’s eyes to the impact humans are making on our environments. With smog lifting and air pollution reduced, we have all seen just how much we influence the world. Because of this, sustainability efforts will be an even greater priority for consumers now more than ever.
As retailers work to combat these three challenges, some are realizing that one department has the ability to solve them – the parcel packaging department.
The packaging process has long been an area that takes time and staff in order to get customer orders out the door as fast as possible. Not only does manual packaging slow down order fulfillment by taking minutes to pack an order while utilizing a number of valuable warehouse workers, but it uses many unnecessary void fill materials. From polystyrene to air pillows to packing paper, sustainability is tough for this department.
To combat this, some retailers will order hundreds of different-sized boxes in order to limit the use of void fill materials. Others will prioritize social distancing efforts and find ways to keep workers spaced apart in the packing area, sometimes by reducing the warehouse labor force. Both of these solutions are only band-aids. They can cause an exponential increase in packaging material costs and reduce order fulfillment times with fewer workers. The retailers that want more than a quick fix will turn to automated packaging solutions to combat these new challenges COVID-19 brought to the warehouse prior to the 2020 peak shipping season.
These state-of-the-art auto-boxing systems measure, construct, seal, weigh and label each single- or multi-item order in a custom-fit parcel while eliminating or reducing the need for void-fill material. Some solutions can auto-box up to 1,100 parcels per hour using only one or two operators, adhering to social distancing requirements while also optimizing order fulfillment. In addition, the right-sized parcels some of these solutions create allow retailers to use an average of 29% less corrugate and experience an average of 38% reduction in material costs, prioritizing retailers’ sustainability efforts. These proven auto-boxing technologies generate highly effective packaging and optimizes warehouse efficiencies so retailers can keep up with holiday shipping demands.
While last year’s peak shipping season showed retailers ways to improve operations, it was nothing like the new challenges that came during the COVID-19 pandemic demand. Not only were fewer workers in the warehouse to fulfill customer orders, but the majority of consumers were only shopping online. These new challenges were tough for retailers to overcome, and continue to be, but are a good lesson on how to overcome the demands that may arise during this year’s holiday season. With the help of automated packaging solutions, retailers will look forward to 2020’s peak shipping season.
Sean Webb is the Business Development Executive at Packaging by Quadient, a leading provider of automated packaging solutions. He can be reached at S.Webb@Quadient.com. For more information, visit https://us.packagingbyquadient.com/
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