2020, for all its faults, is the year that almost every company and business “decided” to finally jump into Ecommerce. This includes not only selling online directly to end users, but the various means of getting the product into their hands including in-store fulfillment. While Retailers’ online sites in 2018 totaled sales over $400 billion, they will far exceed that in 2020 and are expected to grow to over $700 billion in 2020, with some of the fastest growth coming in food and beverage (23.4% - 58.5%) and health and beauty increasing from 16.6% to 32.4%. (source: eMarketer.com). That pace along with the expected drop in total brick-and-mortar sales means Ecommerce will make up over 14% of total retail sales in 2020.
I wanted to share today a few of the key changes going on in the warehouse and logistics industry from our perspective. These are not comprehensive of course – the impact is much deeper and far-reaching – but if you have not been making these changes or adapting to them yourself, our recommendation would be to get some assistance in taking a look and making sure you are not going to be missing on something that is going to be permanent from 2021.
The Impact of E-Commerce We Are Seeing
Moving from a model where you are shipping packages to packing less products in smaller packages is not a simple adjustment. It requires changes up and down the entire process, and a much larger variety of supplies and equipment to do it effectively: multiple box sizes, packing stations with the right equipment, new labels, printers, etc.
A short list of a few things we are seeing:
- Many are using more shrink wrap which will need to be labeled with bar code labels printed at each packing station.
- Bar codes being printed and applied so that every product/package can be tracked through the manufacturing process, and then as it goes to the Distribution Center or Fulfillment Center before it is shipped to the customer. For this to be effective it is very important that the bar code labeling system be flexible and able to handle changes as business continues to change to meet new business requirements.
- Tools to increase picking accuracy. With so many industries needing to make every shipment count under heavy demand, picking accuracy matters more than ever because shipping the wrong product means disappointing TWO customers. Voice technology or updated picking processes and labeling are common investments now.
Some common upgrades that help make the transition easier include a labeling platform like Bartender and expert to help you with it, and additional printers. Having extra printers serves two purposes: not only to accommodate spikes in volumes, but to have as a backup. Losing a few labels for some pallets is not always a major disruption, but when you need to label 2-3,000 packages per day going directly to customers, having your printer not keeping up will harm your business quickly.
Shipping Options Retailers are Learning to Adapt
Some Brick-and-Mortar retailers are having to learn a large variety of new skills in order to offer the same product portfolio online that they have in their stores – and some have figured out that moving online also means you can expand your offering significantly with the unlimited “space” a website has relative to the retail space. If the back end can be managed then there is very little to limit what can be offered online.
Two examples of this trend we see proliferating in 2020:
1. Drop Shipping
Drop Shipping is a method that allows a company to re-sell products that another company stocks in their warehouses, puts in shipping packages, labels and drop ships directly to your customer. It’s commonly used for oversized items or high value items that are harder to stock and manage yourself. While it’s a great way to expand your offering while minimizing your risks in the back end, it does have challenges for customers and your service teams as it means items won’t get shipped at the same time and shipping charges are often duplicated, and returns are more complex too.
2. Being a Wholesaler And having your own Warehousing Operation
Moving from a strictly wholesale operation to a hybrid operation shipping directly to customers requires some investment in hardware and software. You have to manage your product inventory, invest in stock that is need to fill orders as they come in, manage and track these customer orders, and put in a process to ship the products ordered that including picking individual items from different types of categories, sorting them so they arrive at a packing station together, packing, labeling, shipping and more.
Expanding from wholesale-only to a hybrid operation impacts how you sell the products and also requires multiple varieties of new labeling options as they will be required for every item. While wholesaling products requires case packing, labeling, pricing and shipping, selling to the end user also requires individual pricing, packaging, labeling and shipping. Picture a case of a specific product containing 16 units of the product. Shipping the case to your retail store requires ONE label, shipping it to consumers means 16 labels – one for each customer address.
Upping the Labeling Game for Ecommerce
Product Labeling has always been very important. Product Branding is what the end user first sees when he looks at a product whether it be in a store, online or when it is received. One of the most important things to a customer 1st image of a product is the label and the information on the label. The migration to Ecommerce in 2020 has created a need to expand the quantity and type of labels that are needed or can be used.
“Custom Labels” refers to those that come made to order with a logo or a custom size or other information specific to your Brand or the product/service. A few basic principles of custom labeling we see being followed out there include:
- Labels Creates the First Impression – make sure it is a good one.
- Make sure the label Identifies your Product or a Particular Brand
- Labels need to Identify the Quality of an Item
- Labels Need to Provide all Important Product Information
And while the labels you use to ship cases on pallets will have the type of information used to identify locations, destinations, etc., your new labels might need some or all of the following to satisfy the demands of being a customer-facing message or critical information:
- Ingredients – that lets customer know what they are buying
- Health Risks - that lets customer know what they are eating – IE allergies
- Where Product is Manufactured - country of origin
- Expiration Date / Use by Date (if any]
- Instructions - on how to use the product
- Warnings - all warnings need to be clearly stated
Finally, if you want the ultimate level of flexibility in custom labeling, you can do all of it dynamically with software like Bartender. Bringing in a higher-quality printer with 300-600 dpi means you can set up a “print-on-demand” process that can incorporate artwork, logos and precise product information in a dynamic manner that can adopt to each product. Pre-printed labels, which were always the standard for custom labels, can generate a lot of waste – up to 20%.
Learn How Labeling Is Always Improving
The materials, adhesives, printers and applications for labels are always evolving. Whatever you started doing as a band-aid to get through 2020 is not just going to be a long-term cast, but most likely a permanent feature of your operations. If you recognize the opportunity to upgrade the quality of your labeling and are not sure where to start, we are always open for a free consultation – or start below with your free 30-day trial to Bartender.