June 28, 2022
June 28, 2022
The holiday season is an important time for both e-commerce and brick and mortar retailers around the world. While peak purchasing times will vary based on different cultures and social rhythms, the holiday season that takes place during the fourth quarter of the year can account for as much as 35% of the annual revenue of certain businesses. The popularity of holiday gift giving makes a significant economic impact in countries all around the world, with Ranpak and Harris Research finding that 69% of Japanese consumers had packages delivered to their homes during the 2021 holiday season.
With so much earning potential tied to the holiday season, the preparations made by retailers will typically begin well in advance of prime shopping months. September and October are often when preparations are put into place to execute a flawless seasonal marketing and sales strategy.
The stakes are high for businesses, but the rewards are also growing; in 2021 within the US alone, holiday spending grew 16.1% year over year, the fastest growth in more than 20 years.
In the current moment in time, making the most of the holiday season requires retailers to adapt to several market challenges. Adapting plans to account for these challenges is another reason why it makes sense for e-commerce retailers to start their planning earlier in the year. Here are several of the most pressing challenges that retailers will be facing this season, along with strategic solutions for overcoming them.
When customers make orders during their holiday shopping days, they usually come with the expectation that they will receive their packages in time to give and receive gifts for family and friends. Today, a global supply chain slowdown means that extra time may be required to account for unpredictability.
Increases in fuel costs, backed up ports and warehouses, and other factors mean that businesses must optimize their shipments as much as possible. One of the most effective ways to do so is to right-size packaging.
Right-sizing shipping boxes makes e-commerce more cost-efficient and saves room during logistics. This means that a greater volume of packages can be shipped at once, saving time and money, especially because logistics costs for shipping are often based on dimensional weight, or DIM weight—a calculation that considers both the weight and volume of a box. A small item in a large box will cost more to ship than the same item within a box that fits with little to no void.
Businesses can reduce their voids in several ways, manually or through technologies like automated height reduction, which detects voids within a carton then modifies and seals a box to the highest point of filling.
Regardless of the relative competition for retail employees (which in some markets, including the US, has been heating up post-pandemic) many businesses need to take on more staff to deal with their busy seasons. The need to plan for seasonal hiring months in advance and the tough competition some businesses face makes automation into a viable and attractive solution to hiring challenges that has the added positive of providing productivity benefits through the whole year, rather than just during peak season.
While fully automating a fulfilment center with robotic solutions is a possibility, retailers who are just beginning to consider automation to keep up with holiday demands will likely look to the areas that pose the greatest challenge for their staff. These areas are commonly repetitive manual processes, which include:
Picking, where an object is retrieved from a warehouse or storage area to fill an order and to be packaged for shipment.
Packing, the process of assembling and placing products within packaging, then adding any other required protection for the goods in transit. This could include void fill materials or cushioning to secure the item and protect it from damage.
Palletizing, where packed and sealed boxes are placed onto pallets, ready to be removed from the warehouse.
E-commerce provides a greater audience for businesses, but in situations where a customer cannot physically interact with products in a store environment, they will need other ways to learn about a brand and its products before they buy. In fact, 55% of consumers will typically first learn about a brand on social media, and 34% prefer to use social media to learn about companies that they are interested in. And for retail brands looking to improve their organic reach on social media, the unboxing moment provides a perfect opportunity.
The value of unboxing should not be underestimated, spawning international fads and minting social media millionaires. Tapping into this phenomenon, retailers look to create attractive packaging that conveys the value of their products while surprising and delighting their customers. For e-commerce, packaging also includes the box, pouch, or envelope that an object is shipped in, and consumers have defined opinions on these elements of the shopping experience as well.
Adopting distinctive and sustainable packaging within the box allows brands to reclaim the wow-factor that might otherwise be diminished by the materials surrounding their own products. Consumers want to see sustainable packaging, in fact, across five global bellwether markets for e-commerce surveyed by Ranpak and Harris Research on their 2021 holiday shopping habits, 75% or more expressed a preference for paper instead of plastic packaging within each market.
Optimizing packaging sizes, increasing speed, and removing plastic to improve presentation are all solid strategies for e-commerce retailers that can help them ensure that their holiday seasons are merry and bright.
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