These days it is quite common to hear people complain about consumer products getting smaller, blaming manufacturers for contributing to “shrinkflation”. Consumers (including me) accuse companies of selling smaller or fewer products just to increase their own profitability. There is no doubt some of that is happening. However, an article I recently read quoted renown brand strategist, Laura Burkemper as saying, “This isn’t just downsizing – it’s repositioning.”
Smaller Food for Thought.
The article and Laura went on to explain the reason brands reduce size and count of products is because today, that is what many consumers want. The drivers for this change in consumer buying varies from one buyer to another. It may be about cost and budget limitations, portion control (less chocolate chip cookie temptation), and in many cases, fewer people per household. Not everyone can be a price club buyer.
What Does This Mean for Direct-to-Consumer Companies?
This newest consumer trend means shippers need to be prepared to pick and pack smaller, lower count orders. We have been talking about “right sizing” your e-commerce packaging for the last 18 years and except for a few very large chronic offenders (Target, Amazon, Walmart, Staples), most companies have done an excellent job of not using larger boxes than necessary to ship products to their DTC customers. However, if the products and orders are becoming smaller, the same old box is probably now too small and wasteful.
How the Market Has Evolved.
In the early days of e-commerce, the guiding light in terms of shipping boxes for pick and pack operations was “minimize your packaging SKU’s. That truly was the right thing to do, for larger order quantity pricing and labor efficiency at the pack station.
Today when reviewing packaging usage for a customer, we often find that 30 to 40% of their orders can and should ship in a smaller box. Of course, overall volume is an important factor because 30% of 500 orders per month is different than 30% of 5,000 orders per month.
When Does Creating a New, Smaller Box Size Make Sense?
Many companies avoid this type of analysis because it takes time and, in some cases, they simply don’t know where to start. How do you capture the data that will guide you to a wise decision? We have found that there are some fairly simple to read indicators that can be helpful. They include:
- The amount of void fill being used. If your orders have grown 25% but your bubble wrap or loose fill usage and cost have doubled in the last couple of years, you are probably shipping a lot of smaller orders in bigger boxes.
- Average and individual order total. There are exceptions to this but if your average order size in dollars has shrunk, chances are you are shipping out fewer products per box. Reducing the shipper box size is simply practical.
- Weight per order. Are you shipping out a lot of air? Dimensional weight can be your worst enemy, but it can tell you a lot about what you are shipping out. There may be substantial savings by squeezing into a smaller box size.
- Shipping cost per order. This works together with dimensional weight and being able to “right size” your box can produce real savings.
One of the most important services we offer our clients and customers is Packaging Cost Reduction Analysis. We understand no two customers are identical so we take the time to listen to not only your question but to help you formulate a path forward. Sometimes, a new set of eyes does help, especially if they have seen as much as ours have. Eighteen years and millions of boxes have given us a perspective few companies can offer.
Call us at 630-551-1700 or contact us via this link so we can schedule a time to learn more about your needs.
Related posts:
https://www.salazarpackaging.com/blog/5-packaging-services-for-cost-reduction/
https://www.salazarpackaging.com/blog/how-a-good-packaging-design-can-reduce-your-3pl-costs/
https://www.salazarpackaging.com/blog/avoid-unexpected-hidden-packaging-costs/