E-Commerce Packaging East Pack 2017 1
Sonoco Overview Some Items you may know us by Display & Sonoco Confidential, 2014 2
Sonoco Overview Founded in 1899, Sonoco is an estimated $5.4 billion global provider of consumer packaging, industrial products, protective packaging, and packaging supply chain services. SONOCO S FOUR OPERATING SEGMENTS Consumer Packaging Industrial Converted Packaging Services Protective Solutions Protective Packaging Foam Components Thermal- Shipping Solutions 340+ Plants Globally 3
Adding value by providing total solutions! Innovation Protective Packaging Components
How Is E-Commerce Affecting Packaging? Sustainability: Reducing waste through the entire supply chain. Starting with product packaging, delivery methods, and customer satisfaction, all the way to recycling and/or recovery of packaging. 5
How is E-Commerce Affecting Packaging? Remember when. (1995) Over-Packaging 6
How is E-Commerce Affecting Packaging? And then Increased Value / Increase Fragility Over Packaging Protective Packaging 7
How is E-Commerce Affecting Packaging? And now THE QUESTION NOW IS WHO ISN T SELLING ONLINE AND SHIPPING DIRECT???? 8
How is E-Commerce Affecting Packaging? Retailers and Manufacturers now: Ship by multiple methods (Dedicated Freight, LTL, Parcel, etc..) Shipping pallet loads and single units Ship through retail distribution and direct to customer Have one package that works for all the different distribution methods. Increased Value / Increase Fragility Increased Weight / Higher Complexity Lower Volumes / More SKUs 9
How is E-Commerce Affecting Packaging? From a packaging manufacturer s point of view, this is a collision of different objectives to try and meet the market needs. E-commerce systems want: Ability to ship single unit without damage Ship by Parcel or LTL Packaging that is more generic (no point of sale effect) Minimum size and lightest weight to reduce shipping costs And yes that is a toilet Businesses want: One type of packaging for both No damage for either system Lowest cost Less environmental footprint Retail Store systems want: Unit loads of product Ship dedicated loads to warehouse and then mixed loads to retail Graphics for in-store displays Maximum pallet / container pack out to help reduce freight 10
So, we have created an imbalance Marketing / Business Packaging / Manufacturing Why to be selling through e-commerce 1. Worldwide, ecommerce is expected to grow by as much as 13 to 25 percent. 2. The ability to earn as you sleep. 3. It's easy to get up and running. 4. Eighty percent of the web population has made a purchase online. 5. You can sell more to customers down the line. Thomas Smale Who wins or where is the balance? 11
How do we help resolve these conflicts? Working with our customers.. Problem Analysis Develop Prototype Evaluate Document 12
Protective Solutions Independent Material Design Problem Analysis Develop Prototype Evaluate Document Optimal design, made from different materials that meet the customer s needs at the best possible system cost, while always considering the environmental impact 13
Effective E- Commerce Packaging By designing for the total system and using the appropriate materials, we can help produce packaging that will: Reducing over-packaging Create the right size the package for your product and its shipping environment Help reduce damage and the impact that damage has to your products, your brand and the environment. 14
Sink - Example Manufacturer of Cast Sinks Outline: Original distribution and sales channel was through pallet loads to retail store No Damage Increased ordering through e-commerce and shipping direct to customer High Damage They want one package for all shipments Effect: Over 2+ years of packaging development and testing with over 3 packaging suppliers Packaging went from 4 parts to 6 parts Overall damage numbers have not improved Now looking into secondary packaging Problem Analysis Develop Prototype Evaluate Document Customer quote Not happy with the first one I got via internet order. The online company I used has initially given the impression that I could replace with the same product, change to a different sink or get a full refund. I'll try for a replacement but if something similar happens again, I'll have to rethink my sink choice 15
Let s look at this by the numbers Real Cost Of Damage Numbers are for example only and not reflective of actual sales or profits. Current level 6% But ecommerce orders are increasing
Coming Soon www.sonocoprotectivesolutions.com Online Analysis Including: Real Damage Cost Damage Sensitivity Packaging Performance Impact Environmental Impact New Business Development Marketing and Technology Jim Lowry Sonoco Protective Solutions 502 Brick Church Park Drive Dock 20 (for shipping) Nashville, TN 37207 Tel: 615.744.2475 Mobile: 843.601.1000 Email: jim.lowry@sonoco.com 17