Deufol Packaging Solutions Blog

3 Forces That Are Revolutionizing Consumer Packaging

Posted by Bill Morgan on Thu, Jul 27, 2017
Bill Morgan
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custom packagingHere at Deufol, we design and build all of our packaging solutions custom for each of our customers. The reason why is simple. We believe that every package has to be designed and produced for a specific set of needs and objectives. What works for one company or product may not work for another. The only way to match the best solution with each set of objectives is to implement a custom design.

Of course, you may feel that you don’t need a custom package for your parts or products. You might think that your needs and objectives are fairly standard, and that you can meet your goals with a generic solution.


Custom packaging isn’t so much an expense as it is an investment in a more cost-efficient process.


Even if you’re interested in a custom solution, you may be concerned about the price. It’s only logical to assume that custom packaging is more expensive than standardized solutions, everything else being equal. After all, custom packaging requires specialized design and engineering that may not be needed with standard packaging.

However, customized packaging can also lead to cost savings that can’t be realized with a generic solution. You can’t truly evaluate the cost of customized packaging without accounting for the savings and cost reductions you will also realize.

Below are some of the costs to consider as you compare custom packaging to other standardized options. Don’t make a final decision on your packaging solution until you examine how all your costs will be impacted.

Labor

You might assume that labor costs for custom packaging would be higher than that of a standardized solution. After all, customization requires special design, engineering, and testing. All of those things require labor. 


View More: How to Cut Labor Costs [PDF] ✂️

However, custom packaging design isn’t just about the package itself. Often, we design not only the package, but also the packaging process. That means we may design a new process that implements some levels of automation, which could drive down your per-unit costs. Over time, the savings from the automation may more than make up for any upfront costs you paid for custom design and engineering.

Materials

Much like labor, a custom packaging solution may actually reduce your material costs rather than increase them. Our engineers and designers evaluate all aspects of your objectives when they create their packaging blueprint. That includes any cost objectives you may have. If your goal is to reduce your materials costs, the engineers look for material combinations that may cost less while also protecting product quality.

Deufol Engineer explains the thermoforming process (3:04)

For example, we often produce plastic packaging using a process known as thermoforming. We recently helped an automotive manufacturer reduce their materials costs and improve their quality by adjusting the mixture used in the thermoforming process. That kind of alteration can usually only be achieved through custom engineering.

Quality

Of course, the whole reason for using packaging in the first place is to protect the quality of the product inside the container. The package’s first objective is to minimize risks and potential damage.

Quality issues always lead to increased costs. You may need to reproduce orders to replace damaged parts. You may lose trust with your customers, possibly leading to reduced orders or lost business altogether. Those are indirect, but sizable, costs that can come from using inferior packaging.

deufol floor

One of the main advantages of custom packaging is that it is specifically engineered to minimize the most dangerous threats your product’s face while in transit. Would moisture exposure cause catastrophic damage? Is your product vulnerable to temperature changes? What about sunlight, vibration, or other risks?

Part of the custom design process is analyzing those risks, prioritizing them, and developing strategies for minimizing potential damage. We custom engineer packages to eliminate the risk of product damage. That may mean using stronger materials, changing the shape of the package, or even rethinking the transit process.

The bottom line is that custom engineered packaging may cost more because of the upfront design process. However, that process could save you money through the elimination of quality issues. You don’t have to rework jobs or offer price cuts to customers because of defects. You boost your product quality and in turn, improve your relationships with your customers.

Custom packaging may or may not be more costly than your current standardized option. However, the only way to know is to do a thorough side-by-side comparison that accounts for both the costs and the potentials savings you will realize as a result of the custom solution. You may find that custom packaging isn’t so much an expense as it is an investment in a more cost-efficient process.

 

 

 

 

 

 

Technology is rapidly changing nearly every aspect of our lives, including the way we shop. E-commerce was introduced as a concept in the late 1990s, but it’s only become a dominant force over the past decade or so. Today, consumers are as likely to shop from the cell phone as they are in person. That evolution is shaking up not only retail businesses, but also the suppliers who distribute through retail stores.

Packaging is one area that’s seeing dramatic change. It’s usually the last step before distribution, so it’s a prime area to implement strategies for improved speed, customization, and efficiency.

Whether you package your products in house or work with a contract packaging partner, you’re likely to see continued evolution in the retail channel in coming years. Below are a few of the top forces that are impacting consumer goods companies, especially when it comes to packaging and distribution. If you haven’t developed strategies to manage these changes, you could soon find it even more challenging to compete for retail shelf space.

1. Speed of Delivery

For years, major retailers have been tightening their delivery expectations. It’s not unusual for a major retailer to submit a purchase order with a delivery schedule of a week or even less. If you can’t meet the deadline, you could have to accept discounted pay or you might even lose shelf space to competitors.

Retailers are tightening these schedules because they’re facing competition not only from each other, but also from online platforms like Amazon. That means retailers have to cut costs and boost margins anyway they can. One way to do that is to delay delivery of inventory until the very last minute.

Expect these deadlines to get even tighter in the future. This is especially true as data plays a larger and larger role in retailer purchasing decisions. Retailers are already starting to customize and change their orders and packaging needs based on nearly real-time shopping data. That means they hold off on placing an order until they have the latest information.

The suppliers who can quickly customize their products and packaging and deliver on tight deadlines will be the ones who win more shelf space in the future. A contract packager can help you meet the challenge by warehousing your inventory and then making any adjustments necessary to fulfill your retailer’s last-minute order.

2. Customization

Speed of delivery is a big consideration for retailers, but so too is customization capabilities. As we mentioned above, retailers are now relying on data more than ever to influence their purchasing decisions. Sales trends in stores can change from week to week, and those trends can change the next purchase order.

For example, a retailer may see that certain colors or themes are more appealing to consumers in Los Angeles, while an entirely different type of packaging works better in New England. What works well as an endcap in one store may work better with an island display in the middle of an aisle in another store.

Again, much of this need for customization is driven by e-commerce competition. Amazon can offer their customers thousands of products, so it’s possible for a customer to find the perfect product for their unique needs.

Walmart can’t house the same volume of products in every one of their stores. However, they can customize products based on regional or even local data and trends. Again, your ability to offer that high level of customization will influence your future success with major retailers.

3. Last-Minute Differentiation

The combination of tight delivery deadlines and customization has led to another development in packaging. It’s last-minute differentiation, or the ability to make changes at the very final moment before distribution.

Last-minute differentiation can take many forms. It could be space that’s left blank on packaging so it can be updated with promotional pricing at the last-minute. It can be a basic design with color variables that are added as the packaging is produced.

If you have last-minute differentiation capabilities, it becomes much easier to meet your retailer’s customization and delivery schedule demands. Of course, one of the best ways to achieve this is by working with an experienced and knowledgeable contract packaging partner. They can use their engineering, tooling, and design capabilities to help you fully maximize the retail opportunity. Deufol_Logo_opt.png

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Bill Morgan
Bill Morgan

As president of Deufol North America, Bill Morgan is focused on building and empowering teams to drive growth. He worked for 15 years in marketing, both B2B and direct to consumer, before he took on a leadership role in the manufacturing space. Bill has solved complex business initiatives that have generated tens of millions of dollars for Deufol and resulted in breakthrough solutions for his clients.

Categories: Engineering Services

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