There’s no denying it—more and more of today’s shoppers are turning to online grocery shopping.
Cross-channel retail is evolving, and consumers are eager to try new digital channels, according to findings released by Periscope By McKinsey, New York.
In fact, nearly 60% or more of consumers in Germany, the UK and United States say they engage equally with online and offline shopping channels, suggesting that multichannel is certainly becoming the new norm. However, despite consumer perception and industry rumors, the e-commerce channel is not replacing the in-store experience—it’s simply co-existing—allowing brick-and-mortar to succeed off and online. That’s why co-packers must adapt, adopt and succeed in the e-commerce world.
Fortunately, co-packers are built around flexibility, agility, scalability and resourcefulness. They help consumer goods packaging (CPG) manufacturers develop new products and expand distribution, sometimes into the direct-to-consumer (DTC) channel.
Co-packers also optimize processes, ensure food safety, create sustainability and boast a network of contacts to bring a new product to market faster and in a more cost-efficient manner. Here’s how co-packer’s ability to adapt to the e-commerce world can help companies succeed online.
Meeting e-commerce supply chain challenges
U.S. online grocery is on the cusp of a major increase in consumer adoption. And, e-commerce penetration is expected to at least triple in the next decade, according to new research from Bain & Co., Boston, Mass., and Google, Mountain View, Calif. In fact, 25% of consumers surveyed said they used an online grocery service in the last year.
Furthermore, U.S. grocery e-commerce—specifically online food and beverage sales—will grow 18.2% to $19.89 billion in 2019 and will rank as the fastest-growing product category online, as outlined in this report by eMarketer, New York.
What’s more is, today’s consumers want options—options to choose how, when and where product is purchased and delivered. Expanding into the e-commerce world forces food and beverage processors to restructure their business model.
From updated packaging sizes and enhanced speed to market to shorter runs and more SKUs, the DTC channel presents a different way of delivering product from Point A to Point B. That’s why it’s pertinent for co-packers to meet the supply chain challenges of an e-commerce world.
One recommendation is to define the missing puzzle pieces in your company’s e-commerce supply chain structure, and partner with a co-packer to fill those gaps.Perhaps it makes more financial sense to partner with a co-packer to outsource packaging vs. building a fulfillment center and learning the processes from the ground up.
Maybe your company needs warehousing, shared distribution, updated equipment or the infrastructure to meet e-commerce needs. Whatever the problem or need, co-packers act as a one-stop-shop for solving today’s e-commerce supply chain challenges.
Applying the “phygital” experience
Phygital (physical and digital) marries both the online and offline environments by taking the best aspects from each space to create a more complete customer experience.
According to the “2018 e-commerce study,” presented by IAB Spain, at least seven out of every 10 internet users buys online. But, 22% of those users miss the physical interaction, so they browse online and then make their purchase in a brick-and-mortar retailer.
But, how do co-packers fit into this equation? Co-packers act as an ally for brands and supply chain operations, providing packaging design and distribution services yet still addressing marketing expectations, such as personalization, connected packaging and other technologies.
The specialty food industry, for example, could not exist without co-packers, according to an article published by the Specialty Food Association, New York. According to the 2017 “State of the Specialty Food Industry” report, one-third of manufacturers surveyed do not own their own plant, and of those that do, 45% provide co-packing services for other manufacturers.
That being said, because co-packers already cater to both the on and offline worlds, collaborating with one will only enable your company to excel in the “phygital” experience.
Technology takes e-commerce to new level
Enhanced technologies continue to take the food and beverage industry to the next level. From Internet of Things (IoT), blockchain solutions and smart controls to driverless forklifts and automated machines, technology helps co-packers bring a new layer to the food manufacturing process.
For instance, robotic flexible case packers increases flexibility, uptime and product changeover. Automated packaging equipment measures, constructs, tapes, weighs and labels single and multi-item orders in one seamless process.
Warehouse management systems come equipped with smart controls and cloud-based features to help operators monitor the safety of each product, package and line.
Many co-packers have also added pick-and-place equipment driven by an e-commerce platform to bring shoppers same-day service with customized features.
Adapting to the ever-changing e-commerce world can be tricky. Luckily, co-packers act as the total solutions partner to getting product from in-store to online and vice versa without missing a beat.
For assistance with choosing the right co-packing solution for your product, contact Gray Growth Strategies at submit a request through our contact page or call (888) 998-8762 today!