Because of consumer demand, packaging vendors are becoming much more creative with their craft these days. While we can appreciate the hard work that goes into some of these modern designs, there are a lot of economic issues to consider before using any new packaging to ship items to consumers.
When we, a DTC wine shipper, talk about wine packaging, we are not necessarily talking about the wine bottle itself, but rather the box or carrier in which the bottle is placed for shipping. These can range from plain brown cardboard boxes to fancier packaging with printed designs and multiple degrees of movement.
Here’s an example we saw recently:
The imagery on this wine packaging certainly evokes the feeling of being there, and the way it opens up is a nice touch. This is a great example of a way to improve the unpacking experience for the consumer and further drive engagement.
But, before you go through a complete redesign of all your packaging, you will need to think hard about what you want to gain, what the challenges might be, and what those challenges will cost you in the long run. We’ve identified some of those challenges here to help you think through the process of switching your wine packaging to a new creative design. We highly recommend you speak with us prior to making the decision!
The Hidden Costs of Wine Packaging and Design
There are two types of costs associated with new packaging: Visible costs, such as the upfront cost of design and the price of the packaging itself, and hidden costs. Both have to go into your calculation to use new packaging. But the hidden costs might not be as obvious at first. Here are seven, that we have identified in our professional capacity as fulfillment experts:
- Consistency of branding requires several redesigns. If you are shipping wine DTC, chances are that you don’t have just one size of box. You’ll need an industrial designer to re-design for 2-pack, 4-pack, 6-pack, 9 pack, and 12-pack DTC shipping cartons, depending on what you offer through your eCommerce store and/or wine club.
- Volume purchasing. As with most printed products, you only really get a good value at high purchase quantities, due to the economics of scale. This creates a “damned if you do, damned if you don’t” scenario: If you don’t buy in bulk, each package will add an unreasonable amount of expense to each shipment. If you do buy in bulk, you will not only be putting more money up front for production, but also for storage, transportation between warehouses and handling.
- Turn-around time. Speciality packaging takes a long time to design, and a long time to produce. Frequent changes can introduce unnecessary delays in your operations over time and at a higher cost. Just-in-time delivery is highly unlikely in this scenario.
- Dimensional weight. Dimensional weight rates are always changing; moreover, they usually mean higher shipping costs for wineries. (Your can read more about Dimensional (DIM) Weight over at our sister blog at Materialogic.) Speciality packaging might be more susceptible to dimensional weight pricing, increasing both transportation costs and shipping costs to the consumer.
- Alignment and synchronization. Changes to package design cannot be made in a vacuum. Package size, shape, design, and capacity affect a number of other considerations, directly and indirectly. For example, any changes in packaging will need to be communicated to the winemaking team in case a change in bottle design is needed (and vice versa, too). This will naturally involve the fulfillment team, as well. And marketing will need to ensure that any new packaging is on-brand, and then monitor to see if the new packaging has the intended effect on consumer behavior. And so on.
- Protection. Sleek packages look nice, but if they do not appropriately protect a wine bottle, or need additional filler to get that protection, the cost of the shipment just went up. Wine bottle breakage creates all sorts of hidden costs: Sending the damaged goods back to the winery, resending undamaged bottles, communicating with the customer, and so on.
- Ice pack shipping. Even if you have considered all of the above, they will need to be rethought when it comes to summer shipping and the use of ice packs. Ice packs cannot be added to an existing shipper and be effective. This will require a completely different package type, costing you more money for packaging, the ice packs themselves, and potentially dimensional weight.
- Impact Testing. A not so well known fact is that whenever you introduce new types of packaging for shipment by carriers, it needs to go through a rigorous amount of drop and impact testing. If packaging is not tested and not approved by the carriers in advance, then they will not pay any damage claims. Without approval, it may also put your other approved packages at risk as well.
- Damage Claims. Damage claims are always time consuming. Responsibility falls on the shipper to prove that the carrier damaged a shipment. This will require extensive work, including taking pictures of the damaged products, stained labels, shredded glass particles, and more. Then the amount of time needed to print on-line claim forms, faxing the completed forms (yes, they still make you fax in a claim form!) and continuous phone calls with the claims department, resulting in hours of labor to process and hopefully get paid back for a claim to the tune of $100 maximum (unless you purchased additional insurance/ declared value). In the end, a second shipment will need to be sent to the consumer so that they can, hopefully, experience the brand association that they have been waiting so long for.
When Wine Package Redesign Makes the Most Sense
Hopefully we didn’t completely squish your enthusiasm for a package redesign! Even though there are hidden costs involved, there are times when a creative package redesign makes good sense. Here are a few examples:
- Sample packs. Sample packs usually have a few items and are shipped on demand, and not in large batches. A fancier package can make quite an impression, and volume discounts do not enter the picture.
- Corporate gifts/kits. Again, these are lower volume and shipped on demand, but can make a huge impression later. Wine makes a great corporate gift and surprise and delight both existing customers and potential new ones.
- Rebranding. If you are in the process of rebranding your winery, or launching a new brand, it might be the right time to explore new packaging.
Tips for Getting the Most Out of Your Packaging
As you can see, there are a lot of things to consider before pulling the trigger on packaging. Many times, customers are impressed with the fancy packaging product, but have not thought out exactly what the business case is for it.
If you are considering packaging, there are some other areas, too, where you can have a positive effect on your business with a much smaller outlay of cash. We would be remiss if we did not mention them here! For example, you can:
Track if you have enough packaging to meet demand. Keeps tabs on the packaging you have in-hand at your fulfillment center, and whether it is enough to meet the demands of the season. Did you ever run out and have to purchase more? (And were there ever delays because you ran out of packaging?) Did you have too much left over? Which sizes ran out, and which ones were left over? Try to keep track and keep packaging inventory levels in line with demand.
Record breakage. Were your shipments kept safe? This is priority #1 for any fulfillment center. Set a tolerance level for the amount of breakage you can absorb and track whether you are meeting that goal. If not, you might need to consider adding more filler, or even using a different carrier. (We have a few ideas for you there.)
Think through shipping deals. One way that wineries encourage eCommerce sales is by offering deals on shipping. But be careful: There are laws restricting what kinds of deals you can make. California’s ABC, for example, states that “No free goods or premiums may be provided in connection with the marketing and sale of alcoholic beverages.” This includes free shipping. Formulate a strategy for structuring your shipping deals first, and then keep careful track.
Choose the best carrier for the final mile. The impression that a wine package makes on a consumer is just a tiny slice of the overall delivery experience. Be sure to select the best carrier that can deliver that optimal “final mile” experience.
Think outside the box when it comes to the unpacking experience. Your winery can make a customer smile upon opening their shipment in plenty of ways that don’t involve a box. Add a handwritten note. Include a coupon or special offer, or a small gift. Create a “kit” that complements your wine. There are plenty of ideas, if you get creative, and smaller items usually add little to shipment costs if done correctly.
Want more ideas? Or just want to have a discussion about your packaging and fulfillment costs? Contact us here, or call 707-265-0100.
The Team at Copper Peak