In the health, beauty, and wellness e-commerce market, strategies that streamline inventory management, enhance customer satisfaction, and boost sales can help brands gain a competitive advantage. One of these strategies is specialized kitting and packing services. But what exactly is kitting? How does it differ from bundling? And why is it important for health, beauty, and wellness e-commerce brands to consider how their kitting operations effect their supply chain in addition to their customer experience?
In this blog we’ll explore the benefits of kitting for health, beauty, and wellness e-commerce brands, its role in enhancing customer experiences, best practices for kitting, and how to choose the right kitting service provider.
What is Kitting?
Kitting is when individual items or product SKUs are packaged together to create one product or “kit” that’s ready to be delivered to a consumer. As a single shipment, the kitted products become one new SKU prior to being shipped. Kitting is an effective inventory management and e-commerce technique that packs, stores, and ships related individual products together.
Product kits might be variations of the same product or provide an assortment of complimentary products that tend to be ordered together. They also offer an excellent avenue for retailers to move slow-selling products by kitting them with higher volume items. Kitting techniques are also used for subscription services, which continue to grow in popularity. Flexible kitting operations allow retailers to run promotions related to the time of year, holidays or sales by changing the look of the packaging, adding special inserts, etc. This can be an effective e-commerce inventory control management and sales technique for your brand.
Kitting vs. Bundling
Kitting and bundling techniques ship a selection of individual items in one package. A kit offers value by pre-packaging different items in bulk to create items such as gift sets or subscription service kits ready for sale. A bundle is picked item by item after an order is placed. Bundling is often used as an incentive to buy more and save, while kitting is a strategy often used to move less popular items or sell products through partnerships with several different labels.
Different Types of Kitting
Different kitting methods allow you to pivot operations to meet changing customer needs and manage kitting to improve inventory movement. Kitting solutions include:
Kit-to-Stock: This refers to pre-kitting inventory to await specific customer orders and maintaining stock levels to ensure fulfillment requirements are met. An example of this method is subscription boxes. Subscription kits create “experiences” with a mix of themed products sent out weekly or monthly. Subscription boxes are pre-packaged, ready to be picked and shipped under one SKU.
Kit-to-Order: When kits are created as clients send orders, or as customer’s order them. This is also known as ‘On-demand’ kitting. These personalized kits contain separate items selected by customers, assembled when the order is received, and charged as individual SKUs.
Key Elements of Successful Kitting
Successful kitting requires careful thought to ensure it appeals to customers. This includes:
- Product selection and bundling: Kitting logical products together by identifying common SKU combinations is more likely to appeal to your customers.
- Inventory management and forecasting: Using warehouse management software to identify top sellers and slow movers allows you to sell slow movers on the back of your most popular items. Understanding the numbers and customer behavior increases kit appeal while also keeping items organized as SKUs become more complicated.
- Customized packaging and labeling: Creating customized packaging sets you apart from the competition, whether it is a unique, branded box or themed packaging such as shipping beauty items in a makeup bag or summer skincare items in a beach tote. Labeling applies to a unique identifier, such as a barcode or RFID tag used for tracking purposes.
Benefits of Kitting for E-commerce Brands
Kitting is essential for e-commerce success providing several benefits as a strategic logistics management and supply chain solution, including:
- Improved order fulfillment efficiency: By putting together multiple products, kitting makes locating and picking packages easier during the fulfillment process. From an inventory control standpoint, you manage fewer SKUs, improving inventory tracking and maintenance efficiency.
- Enhanced customer experience: Kitting allows you to create personalized shopping experiences based on customer preferences for health, beauty, and wellness products. You also reduce the risk of human errors with less manual picking, leading to enhanced customer satisfaction.
- Increased sales and revenue: Kitting increases revenue by improving your Average Order Value (AOV). It also allows you to raise awareness of deadstock, tracking slow-moving inventory and pairing it with top sellers. Most customers will avoid returning kits as they are likely to enjoy the purchase as a whole compared to individual purchases.
- Faster shipping and reduced shipping costs: Kitting streamlines the shipping process and reduces the risk of costly human error. A faster fulfillment process allows you to enhance shipment and delivery times to improve customer satisfaction. Cost savings are also realized through optimized warehouse space.
Steps in the Kitting Process
Kitting is a seven-step process often fulfilled by a third-party logistics (3PL) provider, including:
- Planning and product selection
- Inventory management and forecasting
- Procurement of components and materials
- Quality Control and Inspection
- Assembly and packaging
- Labeling and branding
- Inventory tracking and management
Best Practices for Kitting in Health, Beauty, and Wellness E-commerce
When creating kits, you can follow these best practices:
- Personalization: Create personalized kits based on customer preferences.
- Increase basket value: Use cross-selling and upselling opportunities to increase basket value.
- Forge partnerships: Collaborate with like-minded suppliers and vendors to create unique, appealing subscription kits.
- Maintain quality: Adapt quality control and product safety best practices to protect your customers and grow trust in your brand.
Choosing the Right Kitting Service Provider
Third-party logistics companies like SCI provide kitting services for e-commerce health, beauty, and wellness brands. SCI offers the following expertise:
- Capability: SCI offers a broad range of logistics services to handle your entire order fulfillment, including kitting and packing, inventory management, technical services, a wide range of transportation management solutions.
- Specialized experience: SCI has years of experience in the logistics management industry with specialized services related to kitting and packing in the healthcare supply chain and/or beauty and wellness sectors. We have the flexibility to meet your brands vision and create the perfect un-boxing moment. Our agile services easily allow you to add special messaging, promotional inserts, special tissue paper, and more.
- Network: SCI has an expansive coast-to-coast Canadian warehouse and distribution network to save on shipping costs and improve customer experience.
- Supply chain solutions: SCI has a team of dedicated supply chain experts to help plan, and optimize the best kitting solution for your supply chain. We can help source materials and advise on best industry practices to save on costs and provide a better customer experience.
- Technology: By partnering with SCI you gain access to the latest technology and digital solutions to maximize efficiencies, reduce manual tasks and decrease errors. Our innovative technology and business intelligence tools also provide insights with key metrics and inventory control management to help you optimize your kitting operations.
SCI’s Kitting and Packing Services
Kitting and packing is fundamental to your health, beauty, and wellness e-commerce strategy. In some ways the appearance of the box and presentation of the product has become as important as the appearance of the product itself. Brands looking to convey a cohesive brand identity, an aspirational lifestyle, or a particular message need to design their packages with the un-boxing experience in mind. Working with an experienced 3PL with in-house value-added services such as packing and kitting can ensure you exceed customer expectations.
SCI is a leader in providing agile in-house packing and kitting services across Canada. As your 3PL partner our services we can increase speed-to-market, reduce costs, and risks. Specific co-packing and kitting areas have been engineered in our warehouses to ensure optimal flow and higher productivity. This allows teams to process significant daily fluctuations and allows for same-day e-commerce order processing. We also provide quality assurance oversight, including end-of-line order accuracy checks prior to shipping confirmation.
No matter how unique your packing and kitting needs are, SCI’s team can skillfully fulfill your orders to satisfy you and your customers. Whether you ship stock or offer custom subscription kits, we’ll execute a fast and accurate kitting process, with a personalized touch where needed.
For more information on kitting and packing in the healthcare supply chain, contact our 3pl experts today!
