Children's items - a challenge for e-commerce and logistics

High quality of both products and delivery are factors that should always go hand in hand - especially given consumers' growing expectations of e-commerce retailers. Particularly high requirements should be met by articles for children and babies. In their case, the consumer is at the same time a parent who attaches great importance to the quality and safety of both the products themselves and the associated logistics processes. As a consumer, the parent sets the bar very high with regard to proper storage, adequate packaging and safe delivery. These elements should be implemented taking into account the best available logistics standards.

Baby-care products worldwide

The global baby products market was worth around $47 billion in 2021, with estimates for 2022 of more than $52 billion. This is an increase of nearly 11% year-on-year and really few industries can boast such good figures [1] . At the same time, it is a very broad product category. The following main segments are most often identified within it:

• baby skin care
• hair care products
• bath products
• toiletries
• baby food and drinks
• inside [2] .

Nearly 30 per cent of this global cake of children's items was occupied by an online piece in 2021:

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Source: https://www.precedenceresearch.com/baby-care-products-market

At the same time, experts point to some major trends that are also responsible for the growth of the category as a whole, such as:

• fast-paced lifestyles and work-related constraints leading to to look for simple and ready-made solutions - both in the area of hygiene and nutrition,
• growing consumer awareness supported by educational activities of producers' representatives and health services,
• the industry's particularly strong focus on use of natural, safe and environmentally friendly ingredients,
• increasing expectations regarding protection against bacteria and allergens.

Prospects for the domestic market

In our home field, trends are similar to global trends, despite some turbulence for the market as a whole. The year 2020 was the first in years in which the market value in this category fell. Experts put this on the back of a significantly lower birth rate this year, which automatically translated into a drop in demand in the area of the baby product category.

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Source: https://www.pmrmarketexperts.com/kryzys-demograficzny-glowna-bolaczka-rynku-produktow-dla-dzieci-w-polsce-w-2021/

Although experts from PMR forecast further declines for the 'baby care' market as a whole due to demographic reasons, it is undisputed that the share of e-commerce in total category sales will grow and these will be above the declines for the category as a whole. According to PMR forecasts - by 2026, every third zloty spent on children's products will be spent in the online channel [3] .

Similar conclusions can be drawn from the 'Mr&Mrs E-commerce 2022' report, which indicates that the e-commerce channel for the 'baby' category is still a growing one and the outlook for the future is very good [4] .

From the point of view of a responsible e-tailer, children's products are a very demanding category - especially in the target group 0-3 years. This group includes a range of products with specific requirements in terms of both storage, trade registration and secure logistics. At a glance, this applies to products such as:

• baby food
• cosmetics and hygiene products
• feeding accessories
• clothes
• toys

Formal requirements and consumer expectations

Children's and infant products are not only subject to strict restrictions at the production stage (especially with regard to chemical composition), but also at the storage and distribution stages, and possible traceability of outlets if any irregularities are detected:

• proper storage conditions with monitored temperature and humidity (usually 10-22°C and humidity up to 70%)
• full marketing monitoring with registration of production batches and best-before dates
• FEFO (release first with the shortest best-before date) with blocking of short-dated (e.g. 3 days to go) or out-of-date products
• the shortest possible delivery time to minimise the time the product has to spend in uncontrolled conditions (courier sorting office, courier lorries)

From the point of view of a small online shop with a low turnover, these challenges can be overcome without great effort, but the situation changes dramatically as the scale of turnover and the breadth of the product range increases. Apart from the issue of the warehouse, simply keeping track of batches and best-before dates is beyond the real capabilities of a simple sales system and the owner himself and his employees.

Increasing the product range, maintaining high quality customer service and scaling sales requires in this industry a highly professional approach to logistics at many levels and ensuring, among other things :

• a warehouse of an appropriate standard, heated, well insulated and with low visibility
• high standards of warehouse maintenance, equipment with industrial hoovers and floor scrubbers
• a WMS (warehouse management system) not only for managing products, but also for recording batch and date turnover
• operational processes to ensure smooth picking and shipping of products
• developed packaging techniques and tested packaging for safe shipping
• well-negotiated courier contracts, allowing for very late cut-off times and, in practice, a high next working day delivery rate.

Some of these requirements are dictated by formal requirements - for example, records of circulation down to batch level and use-by dates. In the event of communication by the relevant supervisory authorities or the manufacturer itself of potential problems with a batch of product, such an e-tailer should be able to immediately identify and notify the relevant customers of irregularities and next steps.

Children's and infant products are not only subject to strict restrictions at the production stage (...), but also at the storage and distribution stage.

All other requirements stem from very high consumer expectations in this area . Virtually every parent wants only high-quality products for their child, stored and delivered in the right way. After all, the health and safety of the child is of paramount importance to us. The parent-consumer expects the products he or she has bought for his or her child to be safe for him or her, meaning that they have been stored at the right temperature and that the package with them arrives quickly and safely. Moreover, such a consumer expects the products he or she has purchased to arrive pristine. Dust on milk cans or fingerprints on bottles or clothes are unacceptable and can irretrievably 'burn' such a shop in the eyes of the purchaser.

Sales development through professionalisation

Maintaining such high standards on a larger scale can prove to be a difficult goal for many fast-growing e-shops to achieve, and this is where professionals in the form of logistics operators can come to the rescue. As a rule, companies providing fulfilment services for e-commerce come with everything that a fast-growing e-commerce business would have to build from scratch at great expense and effort.

An operator such as InPost, as part of its fulfilment service, not only offers high-end warehouses but also a full suite of processes dedicated to the handling of such a demanding product range as children's products, among others. A warehousing system and appropriate procedures ensure that, as part of the e-commerce logistics service, both efficient warehouse operations as well as all legally required records and traceability . Internal regulations ensure maintaining cleanliness at a high level .

It is worth noting that in the logistics service outsourcing model, the e-tailer can tie logistics costs to revenue quite favourably, as the logistics operator's tariffs are based on a variable cost model: the customer pays only for the pallet space actually occupied and for the operations actually performed. Such a model, despite its seemingly higher unit characteristics, can be very beneficial for all retailers with large differences in warehouse stocking levels or number of operations. There is no need to constantly maintain the entire warehouse regardless of how full it is, or a team of employees regardless of the number of orders.

A parent-consumer expects the products he or she has bought for his or her child to be safe for him or her, meaning that they have been stored at the right temperature and that the package containing them arrives quickly and safely. Moreover, such a consumer expects the products he or she has purchased to arrive pristine.

When choosing a fulfilment provider, it is worth paying attention to InPost's offer for three more important reasons:

• very late cut-off time (even up to 20:00) allows a wide portfolio of potential consumers to be attracted who transact in the afternoon and would like to receive their purchases the following day
• close cooperation between InPost Fulfillment and the InPost Courier and Paczkomat® InPost services, guaranteeing very high rate of actual next day delivery which translates into minimising the time that sensitive products remain in less favourable and unmonitored conditions
• special package offers for InPost Fulfillment customers which allows them to benefit from attractive commercial terms and conditions for Paczkomat® and InPost Courier services.

This means that in order to guarantee a fully professional logistics service for such a distinctive and demanding industry as children's goods, it is worth considering a partnership with InPost Fulfillment. This will translate into both more efficient shipping and a smoother business flow, as well as meeting the requirements of the most demanding customer in the market - the parent.