2020 was filled with some amazing events, as well as ones that truly no one could’ve predicted. People experienced job loss, the switch to all things virtual, masks and social distancing, panic and uncertainty, and economic turmoil – as well as new opportunity. 2020 was a year of history making, but people are turning to 2021 with a “fresh start” and glimmer of hope. Despite peoples’ readiness to move forward, it’s importance to think about what has or hasn’t worked in 2020 and make adjustments to be even more successful in 2021.
Business Disruptions of 2020
It’s no secret that every industry has been affected by the pandemic. Business operations have had to dramatically shift due to the “new normal” and companies have needed to adapt new business models to keep afloat. 2020 brought unpredictability, shipping limitations because of carrier capacity constraints, labor challenges, and adjustments in selling strategies as the world shifted to online shopping. Major carriers such as FedEx, UPS, and USPS even reached the limits of their capacity in 2020, causing them to increase shipping rates. In addition, traditional brick-and-mortar retailers have had to become omnichannel retailers as health restrictions remain in place and ecommerce marketplaces grow more and more dominant.
An immense struggle for companies in 2020 was their ability to change their business models. Industry leaders once used to transforming companies in a few years were given only a few months to adapt to our new reality. Not only was time not on their side, they had an enormous pressure to continue being successful, or the pandemic wouldn’t support them. For example, major retailers adopted BOPUS, or “buy online, pickup in-store” (or curbside) programs to meet their customers’ needs and offer an alternative way to shop. These programs have allowed customers an increased choice on how they shop, while also helping to reduce the costs of fulfillment for these retailers.
With the innovation of new business models, companies also had to look towards digital transformation. Not only in the workplace, but our whole lives depended on digital interaction. Remote work and school dominated internet traffic and businesses were forced to evaluate how to transition their employees to a work-from-home setting. Life now spent primarily at home helped grow supply chain as online ordering skyrocketed, with the U.S. ecommerce industry growing up to 44 percent in 2020(1).
Lastly, 2020 brought about consumer refocus on company sustainability efforts. According to research from FCMG Gurus, a market intelligence firm specializing in consumer, packaging, and product insight analysis, the pandemic prompted consumers to reflect on their attitudes towards the environment and how to reduce their carbon footprint.
In fact, about 55 percent of global consumers stated that they were more concerned about the environment due to the virus, with 62 percent saying that this concern will continue past the pandemic(2). With an increase in consumer awareness, brands should engage in these conversations and work to integrate sustainable practices within their business models.
2021 ecommerce predictions: no rest for the weary
Given the effects of the pandemic, ecommerce has developed faster than ever before. These industry developments are indeed exciting for both buyers and sellers – when properly prepared. We’re predicting this growth to continue in some capacity as we move into 2021 and beyond. Delivery is becoming the new normal, pushing companies to have concrete and robust fulfillment plans to meet consumer demands and ensure customer satisfaction. Reliable, efficient and flexible fulfillment will help ecommerce businesses stand out from the competition, while ultimately keeping customers happy. The process of picking, packing, and shipping orders is mostly invisible to the end consumer. That changed in 2020 when a massive spike in demand led to backlogs and delays for many companies.
Today, online fulfillment is facing a new reality, with spikes in demand depending on economic conditions in addition to time of year. This will continue to cause significant supply chain challenges for ecommerce retailers, especially in the packing and shipping areas. As 2020 has shown, customers are doing more shopping online than in-person, causing shipping rates to rise in order to keep up with its growth.
With that, peak periods aren’t predictable anymore, so it’s important to be prepared. That’s why many retailers, 3PLs and distribution centers are switching to automated packaging solutions. It is the most efficient and economical way to boost productivity, save costs and enhance the customer’s overall experience. With Sparck’s CVP Everest and CVP Impack, companies are able to package each single- or multi-item order in a fit-to-size box in as little as three or seven seconds, respectively.
5 Ways Automated Packaging Can Prepare You For 2021
Now that 2020 is behind us, we can learn from the increased demands in ecommerce and adapt and prepare for 2021. Here are the top five ways automated packaging can prepare you for 2021:
1. Predictability
The ecommerce numbers keep rising and so do the challenges in the fulfillment industry. In 2021, we’ve learned resiliency. The pandemic is not over, climate change is ever present and we’ve come to realize that we can’t plan for everything. That being said, you can have a backup plan to your backup plan.
Once a previous pain point, social distancing can no longer be a challenge in the warehouse. Traditionally, however, the packaging of online orders for dispatch was a manual process, often times requiring scores of people packing parcels and processing orders placed in close proximity to one another. Fortunately, packaging technology has advanced significantly. Innovative, fully-automated packaging systems have been developed to auto-box orders in a fit-to-size box at high rates of speed. The CVP Impack packs up to 500 parcels per hour and requires only one operator while the CVP Everest packs up to 1,100 parcels per hour and uses two operators, meeting social distancing requirements.
2. Flexibility
Peak periods aren’t as predictable anymore, as retailers also face sudden surges in demand outside of the Thanksgiving and Christmas holiday season. As a result of unexpected events, weather, health, economic conditions, sports or fashion, spikes in demand occur as consumer behavior shifts. These shifts led the global parcel volume to reach 103 billion in 2019, with a prediction of parcel volume most likely to more than double and reach 220-262 billion parcels by 2026(3). With the continued parcel growth, peaks can put a strain on the whole fulfillment and delivery process, especially in the packing area.
Traditionally, to manually construct boxes, pack goods, insert void fill, label the parcel and then send it to the shipping department, it can be a very slow and redundant process. Now with the pandemic, companies are focused on their employees’ health and safety, adhering to strict social distancing precautions. Few shippers have either the physical space or the available labor to create additional packing stations for what may be only a few days, weeks or months of work. Shippers must be prepared to cope with the new reality of frequent and dramatic spikes in consumer demand.
Through automated solutions, packaging online orders is now fast, efficient and extremely economical. The CVP Impack and CVP Everest can grow and scale with operations packing while alleviating peak season challenges. These solutions give retailers the ability to minimize ease labor concerns with scalable automation, keeping employees safe and eliminate the need to hire seasonal laborers and upskill existing staff.
3. Green Advocacy
With global awareness increasing more than ever in 2020, many companies and customers demand sustainable practices when it comes to packaging. In fact, 55 percent of global online consumers say they’re willing to pay more for products and services provided by companies that are committed to reducing their carbon footprint(4).
Automated packaging solutions are designed to use less packing and corrugate materials. Shippers can create custom-fit right-sized parcels to eliminate larger-than-required packages and void fill materials. By warehouses using automated packaging solutions, they can save an average of 29 percent on corrugate and an average of 38 percent less on material costs. Additionally, with right-sized packaging, it leads businesses to save on transport costs and CO2 emissions. In other words, you don’t have to plant a forest to let your customers know you care. One of the simplest and best things companies can do is use less materials and boxes that are 100 percent recyclable.
4. CX Strategy
With an increase of online shopping, there are fewer opportunities to connect and engage with customers in person, at a time when shoppers want more interaction with you. As we know, first impressions are crucial. This also applies when customers unbox their order, since packaging is the most outward testament to a brand and its commitment to sustainability. Many customers are becoming more environmentally conscious, putting pressure on companies to do the same. With automated packaging technology, it requires no void fill, can quickly get the package out the door, is easy to reuse or recycle and the corrugate used can be easily branded with any company’s logo, making it unique to them. When opening their package, customers will notice that their order is on-time, the perfect size and has been customized specifically for them, resulting in an overall positive customer experience.
5. Shipping costs
With 96 percent of U.S. growth expected to come from ecommerce by 2023(5) , carriers continue to deal with capacity constraints because of the pandemic and peak seasons. UPS, FedEx and other shipping partners announced that their annual shipping rates will increase by an average of 4.9 percent, so shippers need to make changes now to combat these price changes. This is where DIM weight plays a significant role in package delivery – because of DIM weight, sending large, bulky packages can get expensive and negatively affect your business’s bottom line. As a result, businesses should be aware of this pricing and prioritize fitting packages in the smallest box possible.
Automated packaging allows shippers the opportunity to create the smallest parcel possible through right-sized packaging. In this process, each unique order is 3D-scanned on demand to determine the minimum box size required. Then, corrugate packaging is custom cut to eliminate unnecessary volume and the need for void fill. Finally, the order is then auto-packed in a fit-to-size box, saving shippers on material spend and transportation costs, due to there being less need for trucks when there are no oversized packages.
Auto-boxing will increase throughput and scale with your business while using less
As the industry has proliferated, ecommerce is still ever-changing and growing. Each year, several trends emerge that can help a business grow – and 2021 is no different. However, automation seems to be the number one technology companies are looking to switch to, especially during the pandemic.
Quadient’s innovative auto-boxing systems can be found at warehouses across the country due to its efficiency, reliability and sustainability. The state-of-the-art solutions measure, construct, seal, weigh and label each order in a custom-fit parcel in seconds.
The CVP Everest and CVP Impack will also auto-box orders as well as produce parcels for hard or soft goods without any additional equipment while optimizing all steps of parcel fulfillment, saving retailers on shipping and material costs, and even reducing the warehouse’s reliance on labor. Ultimately, realizing the full benefits of the CVP comes down to ensuring maximum uptime is achieved all year round, especially during times of peak.
Overall, auto-boxing will increase throughput and scale with your business while using less. These automated technologies are what sets retailers apart from their competitors. Its reliable processes can auto-pack in a matter of three to seven seconds, and without excess waste. The efficiency and strong green initiatives that automated packaging brings can truly differentiate you from others in the ecommerce and fulfillment operations space. Future-proof your parcel packaging process today with the CVP Impack and CVP Everest Automated Packaging Solutions.
Automated Packaging Power
Increased Efficiencies
Up to 500 boxes per hour
High-Velocity Packaging
Maximum Flexibility
Up to 1,100 boxes per hour
Automated Packaging Power
Increased Efficiencies
Up to 500 boxes per hour
High-Velocity Packaging
Maximum Flexibility
Up to 1,100 boxes per hour
Ready to be a fearless auto-boxer?
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Sources:
(1) Digital Commerce 360’s 2020 U.S. Ecommerce Market Report
(2) FMCG Gurus Report – How Has COVID-19 Changed Consumer Behavior
(3) Pitney Bowes 2019 Parcel Shipping Index
(4) The Nielsen Global Survey
(5) Journal of Commerce Annual Review and Outlook: Jan. 4, 2021