Isabel Rocher, head of e-commerce solutions at DS Smith, explores the unprecedented demands facing the supply chain and outlines some of the innovations on the horizon which could enable it to get omnichannel ready.
In September, the Pitney Bowes’ Parcel Shipping Index revealed that global parcel volume has grown by a phenomenal 48 per cent over the past two years. It has increased from 44 billion parcels in 2014, to 65 billion in 2016 and the index estimates that it will continue to rise at a rate of 17-28 per cent every year until 2021.
Global parcel volume growth till 2021
How can the supply chain gear up for this significant shift in shopping habits? At DS Smith, we believe the key to success is moving towards an omnichannel approach, rather than viewing each channel in isolation.
For example, it is possible to develop and produce a pack that will deliver unbeatable performance on the shelf, online and throughout the supply chain. In a complex and competitive environment, it is this kind of innovation that will ensure retailers and manufacturers are working strategically and efficiently. For example, rather than a separate stock keeping unit (SKU) code for retail and another for online, life is simplified by having one SKU for both channels.
In addition to the sheer number of orders, adapting to omnichannel retailing brings many other challenges: short turnaround times, excess packaging, limiting damage throughout the 50 touchpoints of the supply cycle, making the returns process as frictionless as possible, packaging line efficiency, packaging and shipping costs, consumer experience, security and cross-border trade, to name but a few.
However, innovative and thoughtfully designed packaging can go a long way in responding to the challenges of modern retailing and bring about significant efficiencies to the supply chain.
For example, we’ve invested in DISCSTM, a real-world packaging testing process that replicates the stresses and strains of a typical ecommerce supply chain. Named after the different types of testing (Drop, Impact, Shock, Crush, Shake), the patented system consists of five pieces of equipment, each simulating a part of the product journey and therefore providing real world testing. Whether it’s something as simple as a package being returned to a depot several times following a failed delivery or the more futuristic vulnerabilities created by a delivery via drone, packaging needs to be structurally sound and more adaptable than ever before and this is where DISCSTM provides peace of mind.
Similarly, we have pioneered Made2fit, a new technology which tackles the challenge of void space. Instead of paying to ship “air” which is what happens so much of the time, Made2fit enables the creation of right size packaging. This lowers costs for e-tailers by reducing both operational and shipping costs: it saves storage space, cuts labour costs and order administration, and significantly reduces assembly and packing times. It also decreases product movement, helping to reduce damage.
Smart packaging with a “wow” factor
In this day and age, it is also important to design packaging with the return in mind. It must be quick and easy for the consumer to repackage and ensure the product is returned to the warehouse in a saleable condition. However, a product still needs the ‘wow factor’ when delivered inside a box and in an environment free of sales assistants, POS and ambience. You certainly don’t want to shower a consumer with polystyrene filler or be difficult to open in the first place.
Bring packaging strategists into the conversation to demonstrate how thoughtfully designed packaging can bring untold benefits and solve many of the challenges posed by omnichannel retailing.