Withstanding the Rigors of the E-Commerce Supply Chain
The e-commerce supply chain standards that CPG brands need to adapt for brand success
Retailers aren’t the only ones adapting to change as consumer behavior and preference rapidly progresses toward online shopping. Brands are dealing with their own growing pains as they evaluate the often rigorous journey their products take from fulfillment centers to consumers’ homes.
As important as it is for CPGs to continue to optimize their online and mobile user experience, it is equally important to ensure consumers have a positive experience when products arrive.
Most CPG packaging was designed for brick and mortar retail. It’s neatly packed with identical products on pallets and kept in backrooms and store shelves before use. What worked well for traditional retail, however, may not hold up to the tumultuous trips products take along the e-commerce supply chain.
Neglecting the need for e-commerce-capable package designs means losing money for some brands as e-tailers are implementing chargebacks for the addition of protective tertiary packaging.
Amazon is at the top of the list of considerations for many brands—and for good reason. According to research from eMarketer, Amazon alone will make up 49.1 percent of online sales in the U.S. this year, including 5 percent of all retail sales. For comparison, eMarketer says Walmart’s online sales will account for 3.7 percent of U.S. e-commerce in 2018. Amazon has also stated it plans to be a top-five grocery retailer by 2025. Recent acquisitions and new service lines have the company well on its way.
The same way Walmart’s decisions regarding packaging influence brick and mortar retail standards, it is expected that Amazon will lead the way in e-commerce packaging requirements. Ultimately, a strategy that works for both traditional and e-commerce supply chains is necessary.
The good news is that packaging suppliers are developing innovative solutions to address current packaging challenges as well as designs that will take brands into the future. Additionally, the International Safe Transit Association (ISTA) has introduced a protocol, known as ISTA 6, to conduct packaging testing for its “Transit Tested” certification. At the same time, Amazon launched a network of reliable experts (APASS) to help CPGs evaluate how well primary packaging will survive this new supply chain.
Ista 6 and the apass network
In 2016, Amazon and ISTA released a set of testing protocols intended to guide brands and suppliers toward designing e-commerce-capable primary packaging. Amazon also launched a certification program based on the protocols as well as the APASS Network.
Packaging suppliers that participate in the APASS Network provide exclusive services to vendors, sellers or manufacturers related to package design and testing that complies with Amazon’s guidelines and approved certification methods.
APASS participants assist vendors, sellers and manufacturers in achieving certification in one of three levels of e-commerce capable packaging:
prep-free packaging (pfp)
PFP is covered under the ISTA 6-Amazon.com-Over Boxing protocols. It means the product and its package are certified to be shipped in a corrugated over box without any extra preparation, such as putting lotion or laundry detergent in a separate plastic bag. Amazon fulfillment center employees can remove an item from the shelves, put it in a box and ship it to the consumer with the knowledge that it can withstand the stresses of the e-commerce supply chain.
ships in own container (sioc)
SIOC packaging, for which protocols are described in ISTA 6-Amazon.com-SIOC, can be shipped without an over box. The primary product package itself is deemed suitable for the transport hazards encountered in the e-commerce supply chain. Amazon can simply attach a shipping label and send the product on its way.
frustration-free packaging (ffp)
The goal of Amazon’s FFP certification is to quell what’s known as “wrap rage” and reduce packaging waste in e-commerce. Wrap rage occurs when consumers become extremely frustrated with excessive packaging. This makes the e-commerce supply chain more efficient, sustainable and consumer friendly.
Many household products are not yet at a point where package design can easily attain SIOC or FFP certification. Designing packaging that is Prep-Free, however, is achievable and worth pursuing.
The best place to begin looking for ways to improve package design and earn PFP certification is to examine the potential for two macro failure modes in the e-commerce channel: leakage and broken primary packaging. It is important to keep products from leaking during transport, which is typically connected to the seal or dispensing closure/pump. It is also important that the overall package endures shipping hazards so that it functions as intended for the purposes of consumer use.
Certain APASS Network participants operate laboratories in which official ISTA testing is conducted so that brands can submit findings to Amazon and be considered for PFP certification.
Every different combination of container, product, closure, seal and dispensing system must be tested as a whole because changing just one of these elements can impact the overall performance during transit.
There are some tangible benefits to having primary product packaging undergo ISTA 6 testing and certification. If Amazon grants PFP certification, shippers will have the advantage of:
- Reduction in damage and product loss
- Fewer chargebacks from Amazon
- Product-to-market time reduction
- Improved customer satisfaction leading to increased brand loyalty
An important goal connected to focusing on end-consumers is delivering a positive unboxing experience. Aligning with partners and suppliers who have access to the technology used to conduct testing, obtain certifications, share best practices and solve common problems will help avoid a negative consumer experience.
Brands and manufacturers who make strategic moves concerning packaging design now are investing in the future of retail while simultaneously gaining a competitive edge and winning consumer loyalty.