The packaging supply chain is ‘old fashioned’ and ‘inefficient’ according to UK ecommerce firms surveyed in Sourceful’s Solving the Packaging Puzzle study.
The study also found that a ‘typical’ UK ecommerce firm spends £1m-a-year on packaging and employs between one and six people in the packaging supply chain. It also revealed that ecommerce firms each absorb wastage of around £150,000 per year through late shipments, damaged goods and poor-quality product.
Another significant challenge identified in the report was the need to deliver sustainable packaging products. For 57% of firms, reducing packaging waste and increasing sustainability is one of their top priorities. Buyers said that this is largely a trend driven by consumers demanding more eco-friendly materials. Over half of businesses said 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 ecommerce 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.
Sourceful founder Wing Chan said: “This wide ranging and in-depth study underscores the packaging challenges faced by online retailers. The UK ecommerce 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.”
Chan highlighted four key areas of tech that could give ecommerce firms the edge in business:
- 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.
Solving the Packaging Puzzle was complied using research by global market research agency, Coleman Parkes. It was conducted in July and August 2023 with 280 direct-to-consumer businesses, as well as ten in-depth qualitative interviews with senior supply chain professionals from each business category. The respondents included 100 startup businesses, 75 medium established businesses and 105 large established corporations. The businesses represent diverse industries across health and wellbeing, food and beverage, subscription services, retail, appliances and home electrics, beauty and personal care, arts and crafts, consumer electronics, fashion and apparel and furniture and home decor. The full report is available here.
Sourceful is “the smarter packaging platform for climate-conscious brands.” Headquartered in Manchester with offices in London, Amsterdam and Shenzhen, the company aims to create beautiful packaging in the most efficient way possible.
