The rise of eCommerce is an inexorable fact. Readers of this space know that.
Think trillions of dollars in sales, where the reach is global, and where customers can order what they want, when they want it — and delivery had best be speedy when getting things direct to consumers.
But nothing gets products to consumers without a vessel … you know, a package. A wrapper. An envelope. A box more likely, if we’re talking about goods of the physical kind.
Thus, packaging is part of the last mile of any shipment, and packaging, in some respects, is an analog industry that could get a boost from digital. (Maybe you could consider it the last mile before the last mile traveled?)
One company, Lumi — a startup based in California that offers eCommerce firms customized packaging that spans everything from tape to boxes (and the services tied to manufacturing those boxes) — seeks to bring packaging into the 21st century, in a way.
Simply put, brands that take shape on the internet may not be as well-served by traditional models.
In an interview with PYMNTS, Lumi Co-Founder Stephan Ango said, “Companies have been buying cardboard boxes for 100 years, and the technology of making a cardboard box hasn’t evolved. But the companies that use them have evolved a lot.”
As Ango told PYMNTS, historically, companies grew relatively slowly and regionally. The packaging industry developed to suit that need. The result has been a fragmented space serving packaging needs — one that is regional in nature.
But today, he said, “Companies are starting off their life online. They have customers all over the world, and, at the very least, all over the country.” When speed bumps arise as they scale, these firms don’t have to reinvent the wheel when it comes to, say, accepting payments on the internet or finding new markets. The barriers to successful scaling are now tied to supply chain, logistics and manufacturing processes.
“We are trying to help companies that started online remove the bottleneck that is custom manufacturing,” he told PYMNTS.
Think flexible manufacturing then, where the packaging can reflect a company’s unique imprint (literally, as design and graphics are among the services offered in a custom manufacturing setting.)
Ango told PYMNTS that “today, if you are a company that is based in New York, the fulfillment or distribution center might be in Kentucky, with another one in London or Texas … or anywhere. So, where your office is [is] not necessarily where your manufacturing is.” And the old models of shipping goods over hundreds (perhaps thousands) of miles adds to costs, of both the shipping and the freight kind, along with costs to the environment. Packaging can be heavy, said Ango, and transporting it can be wasteful from an environmental standpoint.
Lumi has developed a network of factories all over the country as well as in China, accessible to wherever a firm might set up its warehousing. The key, he said, is to design the supply chain to be flexible to wherever Lumi’s (eCommerce) customers might be.
Ango said the purchasing, order management and procurement process happens through Lumi’s software and dashboard, where items and options are on display from the various manufacturers. Ango said clients typically might place orders with a range of 10 to 20 factories.
“When you think about the old way of doing things, that means you would have a dozen or more points of contact,” and purchase orders would be scattered across manufacturers, said Ango. With a nod toward less than efficient processes, each of those entities would have their own artwork and approval process (unique ones), and the firm placing the order would then go about sending checks to each partner on the supply chain. Ango noted centralizing the process through technology generates efficiencies.
Though Lumi does not offer third-party logistics, they do have a significant hand in getting the materials to the eCommerce firms themselves in a more timely manner — a ripple effect with positive implications for the traditional last mile that reaches the hands of the end consumer.
In reference to payments, purchases are made through Lumi, which uses Stripe as a payments processor. Ango said in the past few weeks, the company revamped billing functionality and now accepts pretty much every bank in the world. Payments functionality is integrated, and customers need to pay only once per order.
In reference to a recently closed $9 million funding round, Ango said Lumi plans to expand its team. Software will get continued focus, as will a prototyping lab based in Los Angeles, where “customers, if they are experimenting with a new form factor or product and they want to see packaging,” can test their ideas and speed time to market.