The explosion of e-commerce in the last decade has caused consumer packaged goods (CPG) companies to rethink day-to-day processes across their entire enterprise, according to the Omnichannel Retail - Operating Harmoniously in an Integrated Digitally Enabled Supply Chain white paper from PMMI, The Association for Packaging and Processing Technologies.
In the United States, online sales are growing 15% a year, compared to just a 1.5% increase in overall retail sales, as reported by McKinsey. The U.S. Chamber of Commerce reported Q1 2019 online sales as 10.2% of total retail sales, with the market share rising steadily quarter after quarter.
With omnichannel, the challenges are even more complex. Omnichannel has come to mean a fully integrated approach to e-commerce and refers to a multiple channel model of selling products. First and foremost, companies within the omnichannel supply chain must adapt to orders coming in from many disparate channels. According to the PMMI white paper, omnichannel companies must become proficient at managing and fulfilling orders simultaneously from many sources, which could include a direct online portal, vendor requests, third-party warehouse and drop-ship orders.
A high level of integration is one of the defining traits of all omnichannel companies. To succeed, omnichannel companies must manage shorter production cycles, keep track of inventory levels across numerous locations and vendors, track packages accurately and externally in real-time and process a high volume of returns.
Companies stepping into the omnichannel universe need to innovate new packaging configurations that are suitable for this new type of distribution, as well as automate new processes to improve efficiency and create new data collection points. They are facing external pressures from retailers, industry peers and consumers to minimize packaging and prevent product damage. These companies continually look to collaborate with partners to forge operating models and solutions, while communicating with customers to provide a seamless, repeatable and integrated shopping experience.
As they pursue omnichannel strategies, 71 percent of companies interviewed for the report agreed the biggest impact was on software and enterprise systems, while half of these companies report the need for modifications to their existing systems.
Sourcing the needed advancements to support the omnichannel can be challenging, according to the white paper. PACK EXPO East 2020 (March 3-5; Pennsylvania Convention Center, Philadelphia) provides the opportunity to take a more focused approach to explore packaging solutions and systems needed to support this growing sector. Produced by PMMI, the three-day event will bring together 7,000 attendees with 400 companies showcasing new technologies in 100,000 net square feet of exhibit space. PACK EXPO East attendees will enjoy all the educational and networking opportunities traditionally offered at larger PACK EXPO shows on a more personable scale. For more information and to register, go to packexpoeast.com.