Forefront

E-comm: Worth the Challenges?

ANNE MARIE MOHAN, Editor

To help better understand how COVID-19 has affected its members, the CPA’s Education Committee conducted a survey in July/August and in October, the results of which were recently released. One area it explored was how the pandemic has impacted those members providing e-commerce services. Said Committee Chairperson Jason Tham of Nulogy in a webinar discussing the results, “I think we all know that before the pandemic, e-commerce was on the rise. And if anything has been proven, COVID-19 has accelerated those trends already in motion. What I found insightful with the data on how members were affected by growth or retraction of their business was that it [the pandemic] amplified the winners and losers.”

According to the survey, just 40%, or 29 of the 48 respondents to the survey said they offer or serve e-commerce channels. As Tham explained, this number is in line with CPG industry information showing that for a number of brands, e-commerce is still a small portion—just a single-digit percentage, in many cases—of their business. “But what has happened is that just as contract packaging and contract manufacturing has converged as a service to a brand or OEM, there’s this late-stage customization, where a CP/CM is well-positioned to also potentially capitalize on this omni-channel or e-commerce amplification.”

When asked, “How has your company’s revenue in e-commerce channels been performing since the pandemic started?” the results were very impressive: Of the respondents who said they do offer e-comm services, 72% saw increased business, 6% saw a decrease, and 22% saw no change. And, for those who did see an increase, seven of them saw growth of 20%, followed by four who saw 30% growth.

While co-packers may ask themselves whether providing e-commerce services, with their attendant challenges of greater labor requirements for manual processes, higher volumes, and the different systems needed to support these channels, Tham said the survey results are compelling: “I’ll let you all make the decision, but I think you can see here that the growth is in the double digits.” CP

mohan@packworld.com

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