Coming from Amazon, you’ve seen e-commerce packaging from both a supplier and user perspective, how would you characterise the chief pressures and demands of the market?
E-commerce is a very fast-paced environment and has changed massively over the last five years or so. As a whole, packaging performance in e-commerce is far from optimised: it hasn’t caught up with the rapid movement of the industry. The packaging is often too large, meaning boxes can be half empty, and do not offer appropriate protection to the contents. The market demands new solutions that are easy and fast to assemble, protect products more effectively, and are more cost and resource efficient.
What difficulties do scale-up SMEs face when it comes to packaging?
When SMEs grow, they tend to grow fast. Understandably, they are focused on ensuring the business is set up correctly, and are less concerned with the packaging optimisation of their products. So as time progresses, the business ends up with masses of unnecessary packaging and it’s only when it becomes larger that it will face any pressure to sort these issues. By then it is too late. There is no reason that a small start-up can’t have optimised packaging, it just needs to be implemented from the very beginning to ensure efficiency throughout the business.
How important is getting packaging right for an SME business? What is the effect on customer experience or profitability?
An optimised packaging range can significantly reduce costs. While many start-ups might bulk order one size of box because this is cheaper initially, reducing pack sizes to fit the product means the business will end up paying much less for the transportation of goods and won’t be paying to ship empty space because a box is too large for the product.
Customer experience will also be significantly better with the right sized packaging. If a box is made to fit the product it’s carrying, there is less chance of damages, and customers will view the brand more positively.
At DS Smith, we have recently launched a web shop, ePack, focused solely on supporting SMEs with their packaging needs. It’s a one stop shop for all packaging requirements and offers guidance and expertise on the right packaging for individual business needs, helping SMEs get it right from the very beginning.
For e-tailers who are looking to scale up their business over the next few years, what might they need to take on board – especially in terms of how packaging might support this?
Differentiating from the competition has never been more important as there are just so many start-up businesses around, so it’s important to be getting all operational aspects correct and providing the best experience possible for customers.
From day one, SMEs need to be looking at the broad picture in terms of how they operate. Yes, the retail side of things is very important, such as setting up a website and other marketing collateral, but packaging and operations can’t be the last thing on the list. The more reduced the operational costs are, the better it is for business.
How is technology supporting SMEs to scale up and differentiate themselves in a competitive market?
There is actually a big gap in the market for technology that will support SMEs to become more efficient, at an affordable cost. At the moment, technology is only really supporting business cost reductions when companies reach a certain scale and can afford the expense.
In terms of packaging-specific technology, there are some options available for smaller companies however these have yet to reach a large scale. For example, many SMEs are taking advantage of digital printing innovations in order to provide a better unboxing experience for the customer.
While SMEs can take advantage of these smaller pieces of technology, along with apps and websites, the bigger pieces of technology that support operational processes just aren’t economically available to them currently. Looking to the future though, I wouldn’t be surprised if we see more SME-targeted technology emerge as more and more businesses look to scale up.