COSMOFACTORY

99 - Fulfillment Experience, featuring International Logistics Group Business Develop Manager Emily Di Fante
[00:00:00]
Deanna: This episode is about the 3PL service model. It's about the pick, pack, and ship of order fulfillment. About the cosmetic market insights that logistics providers see firsthand. It's about the practical and strategic functions of tertiary packaging, and it's about omnichannel retail product, returns, and consumer experience.
On today's episode of the CosmoFactory podcast, I am joined by Emily Di Fante, business development [00:01:00] manager at International Logistics Group. Emily, welcome to CosmoFactory.
Emily: De Hi. Thank you. It's lovely to be.
Deanna: No, it's my pleasure and I'm, I'm expecting a good conversation. The company you are with is a three PL company, three pl, meaning third party logistics. For listeners who don't work in this area of our industry, please give us a quick outline of the services that a, a standard three PL partner provides.
Emily: Yeah, of course. Absolutely. Um, so a standard three P would typically provide warehousing. Um, inventory management, order fulfillment, retail distribution, uh, returns management, technology integration, and value added services. Ultimately, this allows brands to focus on growth while the three PL handles operational complexity.
Deanna: Oh, I like that operational complexity. Um, and, and help us understand then your particular perspective more fully. What market tier does [00:02:00] ILG specialize in? What region or regions does the company serve? If there are similar details that could be helpful for listeners to know.
Emily: Of course. So ILG um, predominantly specialize in premium and luxury brands. Um, and the over where the overall experience really matters to the. Firstly to the brand and also the customer. Um, so ILG operates in the uk. We have 10 UK facilities. We also have a site in the EU in Poland, and we also offer global shipping to all of our customers.
So we really can touch anywhere in the world.
Deanna: Okay. Okay, perfect. And, and certainly shipping practices vary globally. Um, I think it was about 20 years ago, uh, when Amazon introduced two day shipping in the us uh, and consumers started really expecting something different. In terms of product delivery and for the past five years or so, um, we're seeing the rise of quick commerce.
Rapid delivery of things like fresh groceries, I think has only further normalized this [00:03:00] type of convenience. Three PL includes convenience, uh, but it, it, it, as you've already suggested, goes beyond that. I think everyone in packaging can tell you how important, uh, packaging is. Not only for very practical reasons, but also for aesthetic purposes, for branding, for brand experience.
I'm hoping you'll talk about how tertiary packaging, the, the boxes, the bags, the protective cushioning materials. How does, how does this type of packaging do that branding or brand experience work when it shows up at the consumer's door?
Emily: Yeah, I think it's a really interesting topic and I think that in e-commerce, the shipping box has essentially become the storefront for. Brands. So actually it's that initial, it's that first time that a customer has potentially ever touched a product, experienced a product. So it's so key that brands are getting this right.
Um, it's really interesting looking at the different brands that we have and how they manage their packaging differently. So kind of your high, high-end luxury to your [00:04:00] kind of more mass market and what that typically looks like, your high-end probably using higher quality. Um. Kind of boxes. Um, more in inserts tissue paper cushions, like you say, potentially ribbons and actually your mass market going potentially just in polys.
Um, it really, really sort of changes depending on who the actual customer is.
Deanna: Yeah, no, that makes good sense. And you know, CosmoFactory guests that I've, I've spoken with before and certainly listeners know that I, I personally love to think about words. I'm hoping you can, uh, say a bit more about really the metaphorical vocabulary of this kind of packaging. What materials or design details you've mentioned ribbon and tissue a bit.
What, what details communicate luxury? What might help distinguish a legacy brand from a startup? Or is the packaging that Sun Care has shipped in remarkably different from what's appropriate for a Color Cosmetics brand? Help me think about, um, I guess it's the signals, right, that tertiary packaging can give us.
And if you have any [00:05:00] relevant examples, uh, please share that as well.
Emily: Yeah, absolutely. I think, you know, having the high quality materials and even just the thought of the presentation of the. Products going into the boxes itself, how they're positioned. Are they positioned just straight in? Are those products individually wrapped or actually do the boxes have inserts? So there's no movement.
It's the entire experience of actually from receiving that box, even from actually physically open it, the way that the box opens the sound that it creates, what that first looks like. When you look inside, you know, is there tissue paper over with a sticker or is it the products have just been. You know, they're just in the box there to see.
It's very, very, um, I think when you look at some of the brands that we have at ILG and the, the kind of the way that a brand differentiates itself from the market and wants to stand out in the market as well. Um, for example, some of our customers, you know, each product is individually wrapped shoe paper and then is wrapped again in a box.
But then actually looking at different customers who are probably have. [00:06:00] More, they're probably more eco-friendly and actually they're going in sustainable packaging so they don't have any sort of outer packaging. They're actually just placed in like a fully recyclable box.
Deanna: And you mentioned the box there. Certainly, um, maybe this will let let listeners know where I'm shopping, but a lot of plain brown boxes show up I think for consumers these days. Can you say more about sort of that aesthetic? Like, is that, is that every brand or, or what are we seeing?
Emily: I definitely don't think it's every brand. I think it very much depends on the brand's positioning within the market and actually the message that they want to give to their customer. So I think if you look at mass market, it's uh, it's a lot of, it's based on efficiency and it's very cost focused. And those typical brown boxes are, you know, they're fast, they're inoffensive, they're probably fully recyclable.
And actually what the message is very different. The customers that are probably purchasing from those. Particular sites actually are looking at sort of speed and efficiency as [00:07:00] opposed to actually experience. And I think if you are delivering, if you are ordering directly from a a customer's website or perhaps from.
Social commerce, that experience that you are expecting is entirely different. And I think actually if you're delivering off a website and paying three or 400 pounds for a product, it needs to turn up and give you that experience because you may have never even walked into the, a boutique or never physically actually been in contact with that brand.
And so therefore, if you've spent a substantial amount of money, I think that whole unboxing experience is, is crucial.
Deanna: Mm-hmm. And what you're talking about, there is a bit of a link, isn't it, between how consumers buy, not just sort of the market tier of the brand, but how consumers buy the, the retail chain. That they're shopping and then how that might match the expectations or the experience, the, the package that gets shipped to them gives, do you have, do you have more comments there?
Emily: Yeah, absolutely. I think it's, it is a, it is very interesting to understand the type of buyer that's actually purchasing. So for example, [00:08:00] a, somebody that's shopping on social commerce potentially might not even know what it is that they're shopping for that day. And actually they purchase something and it's arriving and it's coming very quickly, and they're very.
Excited and they just want to open it. And it's not necessarily the experience of the brand that they're buying into, it's just actually that they've seen something that perhaps there's an offer and they want it, fast, or actually that the customer needs something to be delivered the next day.
And actually it's not about the experience, it's actually, it's about actually having the needs to purchase and it for it to arrive very, very quickly, I think. They're entirely different customers, and I think that brands are absolutely aware that those customers, you can actually have, you can be selling, you know, omnichannel and be sending your products in a certain type of packaging through one channel, and then actually through another channel be be more aware of who that buyer is.
And actually the packaging is totally different. The experience is entirely different, but it's really knowing your customer and actually where it matters and perhaps [00:09:00] where it doesn't matter as
Deanna: Mm-hmm. And you, you've talked a bit about. Positioning here in your answers. I, I wanna go back to this idea of, you know, the semiotics of, of packaging, really the vocabulary that's involved or the, the signals these, uh, components suggest. Do you have maybe an example, um, maybe two, um, of various, you know, premium brands, maybe a couple premium brands in your portfolio that are differently positioned.
So even though right, it might be that $300 price point you have referenced, the box that shows up or the way it's packaged. Signals something very different about the brand. I, I'd like to really sort of paint a picture for our listeners here.
Emily: Yeah, of course. So one of our customers, Charlotte Tilbury, they're a longstanding customer of ILG and the way that their products are. Delivered consistently is, is very consistent to the customer. So if a customer orders Charlotte Tilbury, ultimately they know what they're getting in that unboxing experience.
If you're buying that as a gift, you know that it will turn up beautifully packaged
Deanna: [00:10:00] Can you describe it a little bit for someone who maybe hasn't received a Charlotte Till Berry Box?
Emily: Yeah, of course. So their packaging is actually quite interesting now, and this is the direction that a lot of brands are heading in, where actually the majority of the work is on the inside of the box. So the box inside is very beautiful. The, the, the product packaging is absolutely stunning as well. So as soon as you open that box, you're automatically getting that, that.
Experience of Charlotte Tilbury, you know what to expect. And also the level of, um, there's customization there as well. So with value added services, there can be engraving to the lipstick tops. It's just a very, very high level. The way that the items are packaged, each item has to be facing in the front.
So as soon as you open that, you know exactly what it is you're looking at. Like even when the care of the packaging, like when it's being picked and packed, that level of detail. Has to be spot on every single time. Um, so yeah, I think that's a customer that's ordering from Charlotte Tilbury will [00:11:00] know what to expect, and they get that time and time again.
Deanna: And those sorts of details you're mentioning. Uh, if a product is engraved for a particular end consumer, I don't know what they put on them, initials names, these sorts of things, or when all the package or the, the products inside are facing front, that's the sort of piece that your team is physically responsible for.
Emily: Yeah, absolutely. And for each customer it's very different. So a customer would outline what it is that their like specifications are when it comes to packing and how those products need to be packed. For example, we have another customer, Lisa Aldridge, and each item is individually wrapped in tissue paper.
Um, and that's across the board. So. That will be something that at the point of onboarding a customer, they would outline to us what it is that they expect and what it is that we have to deliver for their customer. Um, and it has to be consistent throughout.
Deanna: And I think, you know, it's not uncommon for a brand, say, working with a contract manufacturer to work [00:12:00] primarily with the ingredients in that manufacturer's library, but maybe bring in a specialty ingredient, um, you know, if it's particularly relevant for their brand. I'm curious, I guess if it's the same way for these materials that we're talking about, right?
If a brand comes to you with a brief about how their product should be presented. And they are in love with a particular tissue. Do you source that for them or do you have a library where you, you know, pull the light blue tissue off the shelf and ship it out? As long as it matches the color.
Emily: Yeah, typically brands will have, um, their own packaging suppliers. Um, and actually what it is, is they will come to us and they will. You know, they will tell us who they're using, what they use, what they want that to look like. There are often cases where actually the packaging, for example, might not necessarily be as great as they think it is, and then we would be in a position to be able to advise them, you know, if the seals are not sticking, for example, if the tissue paper's not actually folding in a nice way.
And so I think brands. Uh, at the scale of kind of the brands that [00:13:00] ILG deal with, they're very, they've spent a lot of time and a lot of effort and a lot of money in their packaging and they're kind of really aware of what works and what doesn't. But there are absolutely times where they may have had a manufacturer for many, many years and actually all of a sudden the boxes that they thought were fantastic and no longer as great, they may have changed something.
And that's ultimately our responsibility to kind of keep our customer informed that it's not doing the job that it perhaps should do.
Deanna: Yeah, interesting. I love thinking about little quality details like this. Um, and Emily, you know, what we've discussed so far is really what I would call outgoing mail, right? It's the order fulfillment, the. To three PL team like yours handles consumer returns too, or I, I think you'll probably use the word reverse logistics.
Um, what are you noticing with consumer return behavior?
Emily: Um, I think returns are. Really a really important part for our customer. It really enables them to build trust with their customer. Essentially, having easy, fast, effective [00:14:00] returns can really build customer loyalty. And actually we are seeing that brands are potentially really trying to eliminate that, you know, return processes in refund and actually more.
You know, looking at exchange, why isn't this right? How can we get it right? And even potentially sending out new products before they've even, um, we've even received the order back in. It's ultimately our job to give the brands full transparency on those returns we need to get the stock. Back into inventory so they can resell it.
It's also a really great opportunity for us to be able to speak to brands and if, you know, if we are receiving lots of the same products back, okay, why is this happening? What can we do? And it really then gives the brands the, um, ability to go away and notice very, very quickly if there's an issue with products that they're potentially selling as well.
Um, and I think that's why having. Really, really great visibility on your stock is so important, and I think using that data is how brands are getting really smart [00:15:00] about returns as well.
Deanna: Mm-hmm. Mm-hmm. So I have like a million questions, but, um, I, I'm assuming with a company like yours, the brand can literally see that stock data, um, in
Emily: Absolutely. In real
Deanna: well as your team. Yeah, I spoke over you. Go ahead.
Emily: No, sorry. Yeah, it's in real, it was real time. So absolutely at any point they can see where their stock is, um, and where it is in the warehouse, and if it's, you know, been returned or if it's out for pick or if it's been ring-fenced for potentially a B2B order. So, and that's so key for brands to have that visibility over their stock.
Deanna: Mm-hmm. No, that makes very good sense. And this is probably just my overactive curiosity, but I'm wondering too if a company like yours does any work to educate the consumer about. Packaging or shipping a return back, do you care how it comes back to you and are you making any sort of effort to teach the consumer the right way to do that?
Or are we sort of past that phase with e-commerce?[00:16:00]
Emily: I think it's very hard to educate. Um, I think again, it very much comes down to the customer. Customer, the brands that they're purchasing. And you will notice behaviors with higher luxury end brands. The way that their items are sent back and the way that they're returned is probably a lot higher quality than like your mass market for sure.
And actually it really depends on. How much that customer cares. And if you are spending a serious amount of money on a product, the chances are you really do care about that product and you want to make sure it's right. I think you are never going to eliminate being, you know. The things that many three pls will have had returned that things are said that they're a certain item and they're not.
I think it's, I think that the more that brands communicate with their customer and the more that they try and help them and try and make things more, uh, you know, efficient, quick. And actually that then gives, I think you can eliminate that chance of return, [00:17:00] making your websites more friendly, giving customers the opportunity to, you know, by using ai, actually being able to try the products on your face without even purchasing them.
All of these things, I think eventually will help to eliminate the, the quantity of returns. But I think. You are always going to have returns. I think brands are now becoming more aware that you can really use this as a positive to really kind of build on your customer rather than actually, it just has to be a refund, and that's that you've lost that customer.
You can really build brand loyalty here if it's done properly.
Deanna: Yeah. Can you say more about that? A brand loyalty, building opportunity. Are there maybe brands in your portfolio doing it right or advice you're giving to many brands in, in hopes that you can help them leverage this as an opportunity?
Emily: I think website optimization for sure is something that lots of brands are now looking at and really trying to get under the cover of what it. Is that their customer really, really wants and using the data that their three pls can actually [00:18:00] give them into the reasons behind the returns. And actually, I think brands are now recognizing that it's okay to say no. You can actually refuse a return and that's okay. Um, because if you are building a, a loyal customer who genuinely believes in your brand. Then they will return if you are doing the right thing as a customer as well.
And I think that customer acquisition cost we all know is super, super high, but actually what customers is, do brands want to retain? Are they the customers that order six, seven items a month and return seven out of those eight items? Probably not actually. So I think brands are becoming, they're recognizing that probably they have more power than they once thought they did.
so yeah, I think returns is going to change massively in the future. And I think with a lot of the help of that with technology and also with brands really understanding their customers better as well.
Deanna: Mm-hmm. And, and you suggested there that this is what we're looking at for the future, right? Um, [00:19:00] returns are certainly changing. I, Do you have, uh, predictions or expectations really about the future of fulfillment more broadly that you can share?
Emily: the future of fulfillment I think is really going to change in a really positive direction. And actually linking back to something you said earlier about the Amazon and the two day shipping, and I think the speed of shipping is massively changing as.
We progress into the future, but I think it's gonna be a really interesting time where we are probably going to have two very different customers. We're gonna have that customer that wants it today, and I think we are gonna see an increase in same day, next day delivery for sure. But I also think we're gonna see.
An increase in a more eco-conscious customer that's actually like, hang on a second, do I need this tomorrow? Or could I wait four or five days? Could we bundle all of these items together and actually is it a necessity? And I think that's gonna be a really interesting journey from. Brands to be a part of as well because it's very much, who are you as a [00:20:00] brand?
Are you an eco-conscious brand that really wants to work with their customers and or actually, are you a brand that is always gonna be fast moving, fast paced, your customer wants it today, we'll deliver today. So I think for us as a three pl, it's very, very exciting because ultimately we are gonna be able to do the same day next day already.
Do you know the, but then for the eco customer, let's slow it down a little bit. Let's look at how we can be greener. Let's look at electric. You know, final mile delivery, um, especially into the cities. And I do think that that will sort of venture out into the small towns as well. And I do see that changing.
I think that the technology and automation within a three prs will change. And I think smarter warehousing systems will ultimately give brands more and more visibility, will give them more insight into data that inevitably is so precious for them and will help them to grow and evolve.
So. I think there's lots of change. Um, and I think that fulfillment ultimately is no longer, um, moving products from A to [00:21:00] B. It's about delivering the brand experience, um, all the way to the customer's door. So I think there's lots of exciting things ahead.
Deanna: Yeah. Wonderful. And Emily, it's been really fun, uh, to hear about the world of beauty from a three pl perspective with you today. Thank you for being my guest on the CosmoFactory podcast.
Emily: Thank you, Deanna. It's been a pleasure.