Walmart vs. Amazon: a comparison to the printing and packaging space
We have all felt the effects of the pandemic. It has impacted the way we communicate, gather with family and friends, the way we shop, and the supply chain. Having to work, shop, and communicate from home wasn’t a completely new concept. Many of us were already appreciating the conveniences of a remote lifestyle. The pandemic merely expedited trends that were becoming mainstream conveniences like online shopping, shipping to your front door, and curbside pick-up are all trends being embraced by a growing number of consumers.
When the pandemic hit, many consumers were required to stay home. Many businesses resorted to allowing “non-essential” employees to work from home. Most people stayed home and avoided restaurants, movies, and retail stores. But that didn’t stop them from enjoying the conveniences of staying home. They ordered food delivered to their front door, they streamed movies to their TVs, and they shopped online a lot! The demand for custom packaging, short-run, branded, customized packaging that addressed the shop-from-home consumer increased significantly. This pushes the CPG and custom packaging market in a new and profitable direction: on-demand packaging with the advent of e-commerce opportunities taking a primary commercial channel.
Essentially established e-commerce businesses were pandemic ready. It has become apparent that business is moving in two different directions. One direction is toward the High-Volume market. This process benefits come from the economies of scale and manufacturing optimization. The other direction is heading towards High-Frequency printing addressing the need for an immediate request based on consumer trends and the popularity of online purchasing. The demand for custom packaging has gone up. People are buying products, manufacturers are producing more, and trends in custom CPG (Consumer Packaged Goods) have increased. The need for long-run, high-volume print has increased. But the growth for customized, brand-specific continues to capture more of that print volume.
Print production demands are separating. Today, there are two different markets. Retail purchasing is developing two types of shopping preferences. There is the “Walmart” shopper and there is the stay-at-home, “Amazon” shopper. “Walmart” shoppers will “Buy it when they can get to the store,” pragmatic shopper who takes advantage of discount pricing. The “Walmart” model is based on a high-volume, lowest price, distributed model. The “Amazon” model focuses on the low inventory, high frequency, “get it to me now of overnight” customer who tends to be a more impulsive purchase. (You may argue that Amazon offers low prices but there are hidden costs like membership fees.) This is a metaphor for all businesses today. Either you buy in bulk, lowest cost per piece or you buy it in smaller, easy to manage, shorter run, customized versions, branded products that target specific markets.
How Can You Take Advantage?
Longer runs high volume, package printing requires an understanding of manufacturing optimization, using the best methods available to produce the Highest Quality packaging at the lowest costs. Manufacturing efficiencies are critical when producing CPG solutions for this market. Knowing how to create 100,000 boxes for vitamins or producing millions of labels for beverage bottles requires highly efficient manufacturing and production processes.
High-Frequency printing requires the ability to produce shorter-run, brand-specific, versions of packaging that address the trends or shifts in markets. Having the ability to adjust quickly and produce high-quality packaging offers Brands a unique packaging solution. Packaging for seasonal coffees, or special boxes for sporting events like a championship celebration, or maybe it’s for a limited production of a special batch of a beverage. This requires the ability to proof, process, produce, and ship quickly and accurately.
What Are the Benefits?
Both the “Walmart” and “Amazon” models offer obvious unique challenges and amazing opportunities.
The high volume longer-run print model requires more ways to cut costs, improve production, and increase efficiencies. Faster printing and converting solutions have helped but are limited by the capabilities of the equipment. One way to improve performance, optimize production, and increase profits is through automation. Implementing workflow optimization like automated job ticketing and proofing, faster processing, automatic color management, process continuity, and accurate inventory management, have shown substantial improvements in supply chain management and productivity.
There are two types of print business models. Centralized printing and Distributed printing. You are either Printing and then distributing the product such as large corrugated businesses, or you are Distributing the print process and then localizing the print process such as intensely built e-commerce and web-to-pack businesses that deliver personalized, digitized and modern smaller-run services.
Some Package printers have reduced costs by eliminating redundant pre-press steps, improving communications between one production step to the next, implementing better inventory management, accurate supply chain management, and introducing accurate job estimation solutions to control manufacturing costs in real-time.”
Some manufacturers have introduced Autonomous Robotics into their plant to minimize laborious tasks like material handling and inventory management. Autonomous Robots can move pallets around the plant, on-demand, and deliver your print materials to the right location, when needed, safely, efficiently, and without errors. Robots can be programmed to take tasks in the middle of the night so that the first shift will be ready to start production when they come in for the morning shift. Robots can be integrated directly into your supply chain management solution so that everything is in the right place when you need it.
High Frequency, On-demand printing requires a whole new way of manufacturing. It can be more complicated, requiring different printing and production equipment, but it offers much higher margin print profits. In this model, automation is critical. You can’t afford to make a mistake. Understanding how to process high volume, shorter-run print requests is the key to higher profits. This type of manufacturing will demand the implementation of automation into your workflow. Less touches mean more profits. You must implement solutions like automated job submission and estimating, quick and accurate job creation, hands-free processing and production, automated printing and finishing, accurate supply chain management, and accurate shipping solutions. The only way to meet the demands of supply chain integration is through workflow management. The results are very accurate, streamlined, low touch, and highly profitable manufacturing. This type of workflow automation addresses the increasing demand from consumers for customized, overnight printing.
“In the midst of chaos, there is also opportunity” – Sun Tzu
Author: George Compiani – My 20 plus years in the print industry has focused on disruptive, innovative technology. The industry has seen a tremendous shift in print solutions. The internet has had a profound influence on the value of printing. My focus has been to understand how technology has improved and transformed communications. Technology and Automation will provide the improvements that Print Service Providers need to stay competitive. I’ve had the good fortune of working with industry leaders, which allows me to share best practices and successful programs. This is a “Consumer” driven economy, and your value is helping deliver a better customer experience. He can be reached at firstname.lastname@example.org or via LinkedIn.
About Significans Automation
Significans Automation Inc specializes in delivering next-generation automation to the Printing and Packaging industry. The company offers programming and expertise in custom workflow development, communication and project management, color management, prepress training, and end-to-end business integration.
The level of sophistication that is provided increases profitability, improves quality control, and enhances production efficiency, enabling Artificial Intelligence and unmanned production while also facilitating new revenue opportunities in web-to-print and e-commerce.
The company is driven by the conviction that customized automation is the only path forward.