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Design headaches, late shipments and poor quality product: packaging is a million pound puzzle

Packaging Solutions

The packaging supply chain is ‘old fashioned’ and ‘inefficient’, that is according to UK e-commerce firms who typically spend around £1 million per year on packaging. The verdict, detailed in Sourceful’s Solving the Packaging Puzzle study, follows from the revelation that British e-commerce firms must each absorb waste of around £150,000 per year through late shipments, damaged goods and poor quality product.

Packaging is complex and the typical e-commerce firm has around 20% of the workforce involved in the design, sourcing, manufacture and shipment of packaging. Businesses are seeking a more efficient way to undertake design, with almost a third of packaging buyers stating that the design and prototyping process takes ‘too long’.

Another significant challenge for e-commerce firms is the need to deliver sustainable packaging products. For 57% of firms, reducing packaging waste and increasing sustainability is one of their top priorities. Buyers say that this is largely a trend driven by consumers demanding more eco friendly materials. Over half of businesses say that say that a key need is to strengthen relationships with suppliers who they rely on to inform sustainable decision making.

Close to half of the industry agrees the packaging supply chain is old fashioned, with 56% of e-commerce start ups holding this view. One in four shipments is delivered late and one in ten shipments contains packaging that is damaged or is poor quality. The risks and inefficiencies in the packaging supply chain have a real impact on the bottom line.

Speaking about the findings, Sourceful’s founder Wing Chan said: ‘This wide ranging and in-depth study underscores the packaging challenges faced by online retailers. The UK e-commerce landscape is ultra competitive and businesses need a smart solution that can give them an edge. Buyers need a great product, where both form and function live up to their values and consumer expectations on sustainability.

‘Whether it is Spring, Sourceful’s generative AI design tool, our ability to provide real time pricing and sustainability data or our auto re-stock feature, Sourceful has a suite of tools that will help business to solve the packaging puzzle.’

Indeed, the industry is clamouring for technological transformation and three quarters of e-commerce businesses say they are intending to invest in tech solutions to improve their packaging operations. Nearly half (47%) of firms predict that AI will help with demand forecasting, particularly around the perennial challenge of forecasting around promotional events and peak seasons. A significant number of firms (44%) say real time shipment tracking could solve logistics issues while 39% say automated fulfilment could aid inventory management

Four technology trends that will transform packaging supply chain:

Copilots rolling out across all productivity suites (Google, Microsoft, Adobe) that make it easier to do language and creative tasks. This will bring practical AI use cases to day to day business activities.

Large language models will transition from being seen as supercharged chatbots to being seen as operating systems in their own right.

The next version of Sourceful's Spring AI will allow you to use your actual brand assets, such as pantone colours, logos and fonts, which will further accelerate design ideation.

Continued investment from chip manufacturers into graphics technology is making visual media (images, videos, interactive experiences) more and more lifelike. The cost of photoshoots will go down as more media can be generated algorithmically.

The full report can be found on Sourceful’s website here.


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