The protective packaging balancing act
When selecting protective packaging, damage analysis and performance should drive material decisions, not cost.
Warehouse in the NewsLyon earns UL GREENGUARD Gold Certification Teklynx and SiteHawk partner to deliver EHS labeling solutions North Texas WERCouncil to hold 16th Annual Warehousing Resource Convention Robotic Piece Picking Hits Tipping Point Cold storage specialist turns to Cloud WMS More Warehouse News
Warehouse ResourceEvolution of the Retail Fulfillment Operation It’s an omni-channel world, and retail warehouse and DC operations must now seamlessly orchestrate a combination of software, automation, hardware and supporting equipment to meet ever-increasing customer expectations or be rendered irrelevant.
When selecting protective packaging, such as air pillows or paper void fill, companies tend to make decisions based solely on material cost. But purchasing the least expensive protective solution can ultimately become a very costly decision, says Ryan Germann, e-commerce segment manager at Pregis.
“We recently worked with an e-commerce retailer who was re-evaluating their secondary packaging to reduce dimensional weight charges,” Germann recalls. “During that process, we discovered that when they experienced a damaged shipment, it actually impacted their bottom line by more than $300.”
That $300 includes the cost to replace the product(s), as well as customer service time, warehouse labor (to process the return and pick the item again), parcel shipping and additional packaging supplies. And, those are just the quantifiable costs.
“Although more difficult to quantify, this retailer’s marketing team noted that a negative customer experience—such as receiving a damaged product—results in lower customer lifetime value,” he adds. How much lower? “Our research found that 73% of consumers who receive a damaged shipment are unlikely to order from the same retailer again.”
For its shipments, the retailer ultimately selected Pregis’ Airspeed HC inflatable hybrid cushioning with square patterned, connected air cells. This proprietary design allows the material to be used for cushioning, wrapping, blocking/bracing and void fill. It also creates a much higher level of protection than air pillows or paper void fill, but takes up less volume, Germann explains, meaning the customer was able to meet their original goal of reducing their carton size.
“The key to picking protective packaging is balance,” he concludes. “Companies need to balance their shipping and packaging costs with customer experience. If an e-commerce retailer shipping more than 1 million orders a year can reduce their damage ratio from 2% to 1%—and a damaged shipment costs more than $300 each and risks a customer relationship as well—then the packaging is ultimately just a fraction of that overall cost.
About the AuthorSara Pearson Specter Sara Pearson Specter has written articles and supplements for Modern Materials Handling and Material Handling Product News as an Editor at Large since 2001. Specter has worked in the fields of graphic design, advertising, marketing, and public relations for nearly 20 years, with a special emphasis on helping business-to-business industrial and manufacturing companies. She owns her own marketing communications firm, Sara Specter, Marketing Mercenary LLC. Clients include companies in a diverse range of fields, including materials handing equipment, systems and packaging, professional and financial services, regional economic development and higher education. Specter graduated from Centre College in Danville, Ky. with a bachelor’s degree in French and history. She lives in Oregon’s Willamette Valley where she and her husband are in the process of establishing a vineyard and winery.
Subscribe to Modern Materials Handling Magazine!Subscribe today. It's FREE!
Find out what the world’s most innovative companies are doing to improve productivity in their plants and distribution centers.
Start your FREE subscription today!
Southern Glazer’s Wine & Spirits: Designed to Last Automation: What’s at the heart of your system? View More From this Issue