Packaging on the Net
The shakeout among packaging Web sites left the survivors lean and mean and leaning toward supply chain management
By Jim Wagner, Contributing EditorKiss & Tell is a remarkable concept. Two bottles, one inside the other, hold two different fragrances so that the wearer may layer scents or use one during the day and the other at night. The concept made Kiss & Tell a top-selling fragrance at Sephora and attracted the attention of Nordstrom, which began selling the brand last month.
When Nordstrom asked for minor packaging changes, Brad Levy, president of Fragrance International (Youngstown, OH), Kiss & Tell's creator and marketer, turned to the Internet for ideas and services. "Frankly, I was surprised by how difficult it was to find unique packaging," he says. "The sites did not carry a broad range of components for a small manufacturer like me who needs something out of the ordinary. I think there's room for a good general packaging site for cosmetic packaging."
Levy's disappointment isn't unique. Many packaging professionals at small companies have been frustrated by the number of packaging sites that expect browsers to make purchases without any research, design, or tracking assistance, the tasks for which small firms often have no staff. Consequently, dot-coms that are weak on content are faltering, while those that offer a variety of information and services are still on-line. Many of the survivors have evolved, adapting their business models as packaging professionals determine how best to use the Internet. Currently, popular uses include research, supply chain management, collaboration, and design assistance.
Researching Suppliers
The Internet has emerged as one of the greatest research tools of all time. Because of it, browsers can point and click their way to millions of bytes of information. Unfortunately, that information isn't cataloged nicely like books and periodicals at a library. As a result, many hours can be wasted following links to dead ends.
To help packaging professionals find relevant information, a number of sites have attempted to organize as much packaging-related information as they can. The most successful sites are those that offer comprehensive suppliers lists and those that screen suppliers for quality.
For instance, Packexpo.com is one of the most successful packaging e-commerce sites. A joint venture between the Packaging Machinery Manufacturers Institute (PMMI; Alexandria, VA) and Cendex (Falls Church, VA), Packexpo.com contains information about every conceivable piece of packaging machinery and service. The site attracts more than 40,000 unique hits per month and pulled more than 1.2 million unique visits last year. In terms of sheer volume, the site had more than 26 million hits in the year 2000.
Packexpo.com's success is largely based on that of PMMI's successful trade shows, Pack Expo International and Pack Expo Las Vegas. Known for their size and comprehensiveness, the shows attract tens of thousands of attendees. "When Chuck Yuska, the president of PMMI, noticed the various exchanges opening up, he foresaw the need for a lead generator that leverages the brand equity of Pack Expo," says Stuart Stafman, CEO of Packexpo.com and Cendex. "The site is a place where customers can find information and packaging equipment suppliers can develop leads. This is particularly helpful in the cosmetic industry, which is so fragmented that suppliers have no idea where their next customer is coming from."
ometimes, however, cosmetic packaging professionals need a little guidance in selecting suppliers, so a few sites have chosen to limit their lists of suppliers to those that adhere to a set of stringent quality guidelines. B2BPKG.com, launched at the HBA Global Expo in June 2000, uses the Internet to aggregate top-level packaging vendors and make their services available to the packaging community. Vendors must pass a five-point certification to assure packaging buyers that they are only working with the best of the best. The model was based on quality and on price, two important purchasing considerations.
Packtion.com, which went on-line in February 2001, also screens suppliers for quality. Those that pass are added to the detailed listing of packaging components on the Web site. "Packtion is a neutral e-commerce solution company," says Chris Day, cofounder and copresident of the Chicago-based firm. A former general manager of Silgan Containers Corporate Closure Division, Day cofounded Packtion on April 5, 2000, with William McLennan, a former senior vice president with Silgan.
Managing Supplies
Once packaging professionals have chosen the suppliers from whom they would like to buy equipment and supplies, their colleagues in engineering and purchasing need to interact with those suppliers routinely to fulfill orders and request service, among other things. In the not-so-distant past, such interaction usually took place over the phone or fax and sometimes even in person.
Recognizing that engineers and purchasing agents could benefit from a faster and more convenient way to order and track inventory, several companies have created Web sites that enable browsers to manage their entire supply chain. For instance, Packtion allows users to track all packaging materials throughout the entire packaging life cycle, from design to procurement, says Day. "With packaging, particularly in the cosmetic and personal care industry, speed to market is everything," says Day. "We came from packaging, so we built the site with the features needed most by package engineers and designers."
Packtion's platform integrates catalog components with value-added tools and services such as product management and research. Benefits include speed to market for new products and packages, as well as better communication throughout a project. The site also gathers content from industry articles, government sources, Web searches, patent databases, and other sources. On February 12, it announced an investment deal with Procter & Gamble and DuPont, including packaging for the health and beauty division.
In January 2001, B2BPKG.com expanded its site to offer similar capabilities. The portal now offers all members of the packaging supply chainÑbuyers, suppliers, subcontractors, and third-party vendorsÑreal-time access to order status and shipping information. "The site eliminates some of the pain of the supply management process," says Richard Lerman, CEO of B2BPKG.com, (Naugatuck, CT). The services, according to Lerman, were the result of a series of discussions with packaging buyers and suppliers. "We identified the urgent need to improve the way buyers and vendors share important information," he says. "The site addresses the lack of information in the supply chain about the status of a project."
Engineers and purchasing agents can find some similar functions at WebPKG.com. According to the site, "companies can standardize and manage a myriad of product packaging components and details across geographically dispersed sites and partners to achieve increased productivity, significant savings, and improved quality." On-line Collaboration
Researching suppliers and interacting with them over the Internet have probably enabled a number of package designers to meet tight deadlines. Another Internet tool may save them even more time and effortÑon-line collaboration.
"Some of the early sites looked at the Internet as a classic supply stream," says Virginia McLean, executive vice president, sales and marketing of Paxonix.com (New York City). "To us, the question is, what in the packaging business will change because of the Internet? The one thing we know about the world of packaging is that it is a time- and resource-draining route to product commercialization. We created a collaborative environment so companies can work better."
Paxonix.com allows packagers to access a network in order to check on projects. "The traditional way to execute packaging is linear, which wastes a lot of time," says McLean. "Imagine if an artist and an engineer and a regulatory expert and a printer could all come on-line and check proofs instead of waiting in line. That's our model." Currently, Paxonix.com has 18 members, or packaging manufacturers and contract packagers, that help create packaging for cosmetic companies.
Packtion.com offers browsing designers the Product Rocket, a collaborative packaging design tool that allows people managing a packaging project to interact in real time. Operating on a highly secure platform, the Product Rocket routes and tracks packaging components, which speeds communication between packaging functions and reduces development time.
In addition to offering tools to facilitate supply chain management, WebPKG.com allows all participants in the supply chain to interact in a secure, centralized e-location to collaborate on package design and supply specifications.
A new Web site, PackageX.com, also aims to make on-line collaboration easy for packaging professionals. Once a designer has picked and customized a design, he or she can share it virtually with any colleague. For instance, by using the Collaborate tool, users can share, modify, review, and approve designs.
Design Assistance
Before a package designer can even begin to choose suppliers and specify materials, they must have a prototype in mind. Devising one takes creativity, a deep understanding of the product's requirements, familiarity with consumer tastes, and, now, a mouse.
WebPKG.com allows designers to do what they do bes - design, only now they can do it on-line. Following a decision tree, visitors can custom design packages and generate computer-aided design drawings based on size and material parameters.
Another on-line design tool exists at eDesignerStudio.com. Only a year old, the site has been used by packaging executives from Avon (New York City), Estee Lauder (New York City), and Gryphon Development (New York City), among many others. eDesignerStudio.com allows a designer to choose from a variety of stock components and create virtual packages in minutes. For instance, browsers can select a bottle, fit a cap, and order a sample.
At PackageX.com, browsers can choose designs from the site's exclusive Design Library and resize them to meet specific requirements. After seeing several views of the package, browsers can approve and download designs and place their order on-line.
Decades from now, the rise and fall of packaging Web site companies will be the stuff of business school legend. "A few years ago, there was a proliferation of Web exchanges for packaging," explains Packexpo.com's Stafman. "The sites initially hoped to do trade shows on-line. But companies preferred to buy through their own network, which became a problem for [certain Web exchanges] in the long run." Today's surviving dot-comsÑand thriving dot-coms, in PackExpo's caseÑare successful because they make a packaging professional's job easier. They facilitate supply chain management, research, and networking. They also allow browsers to create virtual prototypes. And packaging is better for it.
Jim Wagner is the former editor of CPC Packaging and the current editor of Nutritional Outlook. Jim will continue to be a frequent contributor to CPC Packaging