Charlotte Hardy, Content Marketing Manager, Macfarlane Packaging: We all know that e-commerce is a fast-paced and challenging environment, particularly during seasonal periods of high demand. However, for internet retailers and their 3PL partners, packaging can be a critical component in their success, which is why Macfarlane Packaging introduced a peak performance survey in 2022.
The survey was conducted after another challenging year for the retail market. Lockdown restrictions at the start of 2021 continued to propel online shopping to its highest ever levels. However, the lifting of restrictions saw some consumers head back to a bricks-and-mortar shopping experience, causing a decline in internet retail sales. Then the UK was hit by labour shortages, raw material price increases and demand for much-needed warehouse space. Turbulent times.
So, what did the survey uncover? The survey assessed the biggest achievements and challenges faced by retail and 3PL businesses during the Q4 2021 peak period, and what their priorities are moving forward.
The challenge of operational efficiency and rising costs
It comes as no surprise that almost a quarter of survey participants said that productivity was their biggest challenge during peak. 42% said their pack times increased, with almost a third saying it increased by a minute or more. Almost 40% reported hiring temporary labour to cope with seasonal demand too. Despite productivity being a big challenge for internet retailers and 3PLs, less than 10% used any packaging automation, which could have helped them speed up packing and offset the need for temporary labour.
On top of productivity, storage capacity was also reported as a challenge by 18% of survey participants who said they didn’t have enough room to store both their product and the volume of packaging they needed to cope. With space at a premium, this may have had a knock-on effect on operational costs if retailers and 3PLs needed to pay for temporary warehousing on top of seasonal labour. In the face of rising prices and labour shortages, it was no surprise that a quarter of retailers and 3PLs said they wanted to reduce their overall supply chain costs in 2022.
Making sustainability a priority
95% of survey respondents said that sustainability was important to their businesses. Positively, 88% of retailers and 3PLs reported that the packaging they used during peak is already recyclable. Another 40% said their packaging is made from sustainable materials too.
Looking at the future, 47% of participants said that improving their sustainability and reducing CO2 emissions or introducing more sustainable (or re-usable) packaging materials will be goals this year.
Balancing customer experience with the rise in eco-conscious consumers
37% of retailers and 3PLs stated that customer experience was their biggest success during the Q4 2021 peak. However, there is always room for improvement as a fifth of respondents said that their damages in transit increased during the peak season.
In our 2021 unboxing survey, 65% of consumers said that their top expectation of packaging is that it should deliver their goods safely. Damages and returns are a big frustration to consumers, and packaging plays a key role in cementing a great customer experience.
52% of peak survey participants also believed consumers wanted packaging that is recyclable and 49% said that consumers want retailers and 3PLs to use packaging made from sustainable materials. Eco-friendly packaging is no longer a nice to have – it’s a must have as part of a balanced customer experience.
A quarter of respondents reported that consumers expected packaging that’s branded and creates a memorable unboxing experience. Packaging is often the first physical touchpoint for many consumers, and it represents an opportunity for businesses to connect with customers. What other marketing collateral has a 100% open rate? And sustainability can play a part in this too – through appropriate choice of packaging materials, as well as clear messaging that reflects a retailer’s sustainability strategy.
There’s no doubt that retailers and their 3PL partners face an ever-challenging landscape and Macfarlane Packaging’s peak survey results confirm this. To combat rising costs, while maintaining (or improving) supply chain efficiency, businesses will need to get even more creative. Packaging will play a vital role in that if they want to future-proof for seasonal demand and growth.
Macfarlane Packaging is dedicated to supporting internet retailers and their 3PL partners with packaging solutions and warehouse equipment that can help them optimise their packing operations so they can deliver year-round, even in peak.
To download the complete results of Macfarlane Packaging’s Peak Performance Survey 2022, visit: macfarlanepackaging.com/peak-performance-survey-2022-results