Monday, 19 November 2018

A Articles

E-Commerce Packaging

What is E-Commerce? Business transactions on the Internet are called "electronic commerce,” or more commonly E-Commerce. Some of these electronic transactions include online shopping, electronic payments, online auctions, Internet banking, and online ticketing. There are many companies that participate in E-Commerce. Amazon is a large E-Commerce company based in the United States. Amazon utilizes electronic transactions such as online shopping and electronic payments. Amazon was originally called, “Cadabra.” Jeff Bezos founded Amazon in Bellevue, Washington 1994. It went public in May of 1997 at $438 million. In 2014, it had a market cap of $157.52 billion. Alibaba is very similar to Amazon, but it is based in China. Wal-Mart, Kroger, and Google utilize electronic transactions such as online shopping and electronic payments. eBay utilizes electronic transactions such as online auction, online shopping, and electronic payments.

"While traditionally confined to the sale of non-consumable items, online sales of grocery products have exploded over the past several years. Statistics vary widely on the trajectory of this market, but many analysts predict that between 2013 and 2018, online grocery sales will grow at a rate of 21.1%, reaching nearly $18 billion by the end of the forecast period. In comparison, offline grocery sales are expected to rise by just 3.1% annually during the same period." [3]

Kroger and Wal-Mart have started utilizing electronic commerce as well. This start of selling and buying food is new and will spread as fast as when Amazon first started their business in the E-Commerce. In Memphis, TN, Kroger has a website where consumers can order and pay for the food online. During the time it takes the consumer to drive to Kroger, the Kroger employees packed the consumers order into bags. So, when the consumer arrives at their Kroger, they confirm their order, pick it up, and head home. The same concept of online food shopping has started to spread to Wal-Mart as well.

There are several types of E-Commerce. First, there is Business to Business (B2B). This B2B is just as the name suggests. One business deals with another business directly. The second type of E-Commerce is Business to Consumer (B2C). Business sells electronically to consumer. The third type is Consumer to Consumer (C2C). This is very similar to the barter system. For example, auction sites are consumers to consumers since they deal directly with each other.

What are the advantages and disadvantages of E-Commerce? A few of the disadvantages of E-Commerce for businesses are the cost of a branded packaging and the consumer's unboxing experience. As the technology world continue to grow at an exponential rate, so does the consumers need. As though the arrival of their purchased product was not enough, now businesses must consider how the shipping box appeals to customers to keep them coming back. The business must come up with a package that is not too costly but also reliable and stable.

"You’ll need to decide based on your average order size and profit margins what you can and cannot afford along with which options present the greatest value to your business and most importantly, your customers." [5]

Custom boxes tend to be the most expensive costs associated with creating a custom branded unboxing experience. Some custom printed boxes can start at a minimum order of 500 units for $5-$25 per box. The Uline company sells 50 boxes for $2.50 per box. The AliExpress offers 50 units for $0.39 per unit plus free shipping in most areas. In almost every case, the greater the order size for the various packaging materials, the cheaper the cost.

"Dimensional weight pricing, a move aimed at leading shippers towards packaging that’s closer to the exact size necessary for safe delivery (previously, most consumers chose boxes much larger than necessary, which caused vehicles to “cube out” before actually reaching their physical weight capacity)." [8] Dimensional weight pricing is solving the issue of costliness of decorated corrugated boxes. This new regulation came about from the retailer's awareness of excessive packaging in transportations such as planes and trucks. With dimensional weight pricing, optimal sizing and protective packaging can mean major saving on shipping costs.

There are a lot of advantages. One big advantage is that ecommerce packaging promotes businesses.

"When was the last time you really thought about your packaging and unboxing experience? For many online retailers, the answer is usually never. Packaging in ecommerce came out of necessity for protecting the most important thing, the product that the customer ordered. However, as ecommerce evolves and as consumer habits shift, delivering a complete brand experience extends beyond the product itself and transcends into the whole experience." [5] E-Commerce packaging is a chance for companies to make a lasting first impression on their customers. "Research shows that people form first impressions incredibly fast- usually within 100 milliseconds. A positive first impression of a product’s packaging heightens expectations for the product itself, which, when not contradicted, leads to a better customer experiences." [8]

What is a branded packing experience? The branded packaging experience is a carefully thought out selection of packaging and shipping materials that is deliberated place in a certain way to provide an overall aesthetic for the customer. For example, TrunkClub packaging is a custom printed box with a handle that resembles a trunk. Inside the trunk, the contents are thoughtfully laid out to create a presentation. In addition to this, TrunkClub includes a handwritten card that explains what each item is.

"The value of premium packaging extends far beyond the customer experience into residual marketing effects. The experience goes beyond the online order to when the customer actually opens the beautifully wrapped package and shares that experience across social networks. That act of online and social recommendations drives loyalty from your customers and promotes brand awareness." - Maria Haggerty, CEO of Dotcom Distribution

In a recent survey from Dotcom, they found that 52 percent of consumers are likely to make repeat purchases from an online merchant that delivers premium packaging. In that same study, Dotcom also found that nearly 4 in 10 consumers would share an image of a delivery via social media if it came in a unique package. There are a lot of elements that goes into creating a perfect experience for the consumers. Some elements to consider are the shipping box, tissue paper, filler, stickers, business card, receipt, custom note, and the packaging tapes. The shipping box is a must have if any company wants to do business. The custom shipping boxes usually come as either a white or brown corrugated package because they are cheap and sturdy. The most common filler is the popping bubble wrap. Some consumers love the bubble wrap more than the product that they purchased. Other types of fillers include Styrofoam packing peanuts and foam inserts.

Stickers can be used in several ways. If there is tissue paper, then a branded sticker can be used to seal the tissue paper together or it can also be used instead of custom and expensive printing on your box as an option to brand it. Stickers are versatile and inexpensive. Business cards represent a very inexpensive way of adding small branded promo pieces to a package. For example, a business can add a card that gives the recipient a discount on their next order or, consider adding an additional one that the customer can give to their friend for some extra word of mouth marketing. Another important element is the product's receipt. Putting the receipt with the product is a standard custom. Handwritten notes add a personal touch that makes people aware that there are real people behind the brand. Packaging tape on packages are usually clear, but if a company wants to be original, then the company can put their brand on the tape itself.

References

  1. Definition of E-Commerce https://www.thebalance.com/let-s-ask-the-basic-question-what-is-ecommerce-1141599
  2. The Four “Be”s of E-commerce Packaging http://www.ernestpackaging.com/the-four-bes-of-e-commerce-packaging/
  3. Statistics on the growing popularity of E-Commerce https://www.packworld.com/article/trends-and-issues/e-commerce/how-e-commerce-changing-packaging-landscape
  4. E-Commerce Logistics: The Evolution of Logistics and Supply Chains from Direct to Store Models to E-Commerce http://cerasis.com/2014/04/30/e-commerce-logistics/
  5. How To Create a Memorable and Shareable Unboxing Experience for Your Brand https://www.shopify.com/blog/16991592-how-to-create-a-memorable-and-shareable-unboxing-experience-for-your-brand
  6. How e-commerce is changing the packaging landscape https://www.packworld.com/article/trends-and-issues/e-commerce/how-e-commerce-changing-packaging-landscape
  7. Manufacturing Boxes for the Competitive E-Commerce Market http://www.accuratebox.com/litho-laminated-boxes-displays/mailers/
  8. The Costs and Benefits of Custom Packaging for Ecommerce https://www.shorr.com/packaging-news/2015-03/costs-and-benefits-custom-packaging-ecommerce

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