Right now, contract packing is underway for Christmas gifts in 2020. And shortly, marketing teams will be holding their kick-off meetings for their 2021 Christmas gift campaigns.
Many of you will be assessing learnings from the past year in an effort to make everything run more smoothly, from co-pack procurement to managing component suppliers.
Here’s what we’ve - well, not so much learned, but observed this year. And it’s all about budgets and added value - how to best use your budget to create a product that will fly off the shelves (in store and on your website).
Because, while budgets will suffer particular stress in the coming months, it’s critical to find efficiencies that don’t impact commercial performance.
Budgets are tight and the coming year will bring exceptional pressures on marketing teams to achieve commercial goals during a pandemic.
Cost efficiencies will need to be found - but our advice is to look for savings by aiming high rather than undermining the foundations of the campaign.
Contract packing is very cost-driven - procurement contracts can be won and lost on the bottom line. This year we’ve seen brands seeking to cut the costs of fulfilment by trimming co-pack budgets even further.
But at the same time, they want to offer their customers the most beautifully, creatively and environmentally conscious gift packaging ever. This is, after all, what sells the products. The quality of the end product is essential to maximising its commercial potential.
Scrimping at the co-pack stage will cause issues down the line. We’ve observed fulfilment projects getting into difficulty because the co-pack partner realises they cannot collate the BOM in the time and resource allocated.
This is often because economising has affected the packaging in a variety of ways, It might also be that the fulfilment system isn’t working hard enough. We also can’t under-estimate the effects of trying to remain operational during a pandemic.
Collating (assembling the BOM) can be under-estimated in its complexity when it’s costed up. If there’s a mistake in the quote at this point, you’ll pay for it later on. At best, will cost you more at the collation stage than was planned; at worst, the packaging will need reworking.
If packaging is assessed and even designed correctly from the start, you won’t end up paying for it later on. Using packaging engineers will make sure you get the best results for your budget.
For example, our packaging designers are particularly strong in creating lovely packaging that minimises waste and is easy to collate - so it doesn’t inflate the cost. Packaging designed with this in mind adds real value to your campaign - the ability to offer your customers a gift they are happy to pay more for.
Whichever system your co-pack partner uses should track and clearly show the whole range of components’ statuses in a way that eliminates nasty surprises. If shelf deadlines can’t be met, your sales window suddenly becomes much smaller.
Our fulfilment system SCOPe works very hard. It offers full clarity on realtime status and is made available to the client in the form of dashboards that supplement our regular reporting. Integrated collation forecasting and LOT control mean we can set a delivery date deadline and SCOPe will alert us if the deadline is at risk of drifting.
Social distancing rules at work are not a factor any of us has had to tackle before 2020 but they will be in place for at least some of 2021. Collation (BOM) capacity is only a third of what it was pre-pandemic and this needs to be factored in and handled correctly.
The question to ask when you’re reviewing the year and planning for 2021 isn’t necessarily where you can cut costs, it’s where your budgets will most impact.
If you’d like to talk to us about getting the most from contract packing or your entire gifting campaign, get in touch.
Photo by Jan Huber on Unsplash
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