As Online Sales Skyrocket, Here's How to Track Success in the Integrated Label Market
It’s no secret that traditional brick-and-mortar stores have long struggled, with consumers shifting to online shopping and the convenience of home delivery. But when the pandemic hit in 2020, retailers began shuttering at alarming rates, marking a new era in the aptly named “Retail Apocalypse.”
According to Insider Inc., in 2021, Gap Inc. announced it was closing 84 Banana Republic locations and more than 100 Gap stores to have a smaller and healthier fleet of stores; H&M planned to close 350 stores and open 100, citing a rise in e-commerce; Disney closed 60 stores to focus on e-commerce; and American Eagle scheduled closures of 200 to 250 stores (mostly mall locations). These are just a few examples of those joining 2020 predecessors J.Crew, JCPenney, Lord & Taylor, New York & Company and Neiman Marcus — all of whom announced permanent store closures or bankruptcies.
Other brick-and-mortar stores took note of the trend and continued to beef up their online presence. In fact, Walmart held onto the No. 2 spot, ahead of eBay, on eMarketer’s Top 10 US Companies, Ranked by Retail E-commerce Sales for 2021. And, based on analysis from Adobe Digital Insights, Americans are slated to spend $207 billion online on holiday gifts from Nov. 1 to Dec. 31, so expect to see a nice boost in revenue for these retailers.
This is all good news for the integrated labels segment. Their sales have increased alongside the growing need for shipping labels, return labels and packing slips. The name really says it all, as integrated labels can house a pick, pack and return label on one sheet, resulting in fewer materials, lower costs, and simpler tracking and return processes.
Mark Mallory, national sales manager at I.D. Images, Brunswick, Ohio, doesn’t believe the e-commerce trend will fade out either. “In our personal shopping, we never used to order dog food online prior to COVID,” he shared. “Now, we will most likely continue to because of the ease of going online and having it shipped directly to our door. We no longer have to deal with finding the time to make it to the store and hauling the bag of food around back to our house. In just a few clicks, it’s all taken care of.”
To learn more about where integrated products are excelling and how to balance the benefits and challenges of this product line, we spoke to Mallory; Dee Brown, CDC, director of sales for Flesh Co, a Div. of Ennis Inc., Parsons, Kansas; and Tina Furgason, sales office manager for PrintXcel, a Div. of Ennis Inc., Toledo, Ohio.
What to Remember
Integrated products allow for the card or label to be imaged at the same time as the carrier document, versus being printed at separate plant locations, thereby reducing the chance for error. But that doesn’t mean integrated products are without production challenges. Positioning of the die cut is one area that must be considered.
“Its relation to the edges or any perforations that the form may have are all relevant in how or if it can be produced,” Brown said. Mallory took it a step further, adding, “If using existing equipment, it is important to make sure the printers are compatible and properly maintained to avoid jamming.”
Because it’s an application-driven process, it is also important for distributors to understand the end-use and customer requirements — both of which will drive material selection.
“Some of the first questions we ask when finding the right solution for a customer and their end-user are related to the environment and application of the label,” Mallory said. “What is the label being applied to? What’s the environment like that the label is being applied in and that the label needs to withstand? Does it need to withstand cold temperatures or sunlight, or does it need to be able to resist abrasion and remain intact for the product lifecycle?”
How to Overcome
Though not unique to integrated labels and cards, we should still mention the well-documented supply chain troubles. On-demand ordering and quick turnaround times are luxuries that are on hold for at least the near future. Currently, Mallory is seeing limited raw material availability and freight issues push traditional two-week lead times into roughly six to eight weeks, and he said the spike in demand is only compounding matters. And, as Furgason pointed out, integrated labels are produced on multiple pieces of equipment with materials coming from multiple suppliers.
“It takes a little more time to put everything together and get the product produced,” she said. “The most common challenge with the current just-in-time mentality is our customers don’t always allow enough time for us to make everything happen.”
So, what’s the interim solution? Furgason admitted that securing supplies for all aspects of the business has been difficult. PrintXcel has tried to anticipate its customers’ needs and pre-buy as much as possible. The company recommends alternative materials when available as well.
For Mallory, it’s understanding customers’ needs and working with them to forecast anticipated volume. “Setting up inventory programs can also help to remedy supply chain issues,” he said.
Brown was more direct in her approach. “It is imperative that we, as manufacturers, urge our distributor partners to have frank discussions with the end-user so there are no surprises,” she said.
Where to Look
The time- and cost-saving benefits of integrated products are clear — and they’re not limited to the retail sector. Distributors should also research opportunities in the insurance, promotional and nonprofit verticals. Or, healthcare, which happens to be the largest vertical market for Flesh Co.
“We do a tremendous amount of chain of custody forms for labs and medical facilities,” Brown said. “… Chain of custody forms — whether [they] are for routine lab work, health screenings, drug testing or COVID testing — are an integral part of our healthcare system. It is essential that the product work as intended, and the numbering is accurate.”
Brown listed membership and ID cards as another big market for distributors to research. Specifically, they can look at a membership welcome letter with a membership card and a key card, or an insurance renewal form with the new insurance card.
“Since all is printed at once, there are no worries about colors, numbering or information not matching,” she reminded. “It allows for a cohesive look to the final product and incorporates numerous features into a single, highly efficient document.”
The possibilities with integrated products are almost limitless if distributors lean on their supplier partners during the sales process. With the busy holiday rush now here, Mallory recounted a timely case study. A large luxury department store needed a sizable quantity of integrated sheets (shipping labels, packing slips and return labels) to fulfill holiday orders. With the help of I.D. Images, the packaging distributor came up with a blank integrated label with two labels side by side — one 6x4” shipping label and one 1.5x4” label most likely used for returns. The top label, Mallory said, was used for branding and a packing slip.
“We went back and forth and quoted a variety of options, including heavier faces and lighter faces, and worked with the customer to find the best solution for their need,” Mallory recalled. “We also needed to consider lead times and product availability.
“We did a test run, and they liked the product. Our timing and price were what the customer was looking for,” he continued. “We helped mitigate any product delays by setting up a min/max. We ran a large amount of product and stored it in our facility, so it was available when the customer/end-user needed it. We were able to improve lead times on this custom product and ensure they had the labels they needed when they needed them.”
Furgason favors active listening, education and taking creative risks. “We have an excellent production team that works closely with sales to help come up with options,” she said. “We look at everything as an opportunity to help our customers grow their business, which, in turn, grows ours.”