That’s a Wrap

If your company caters to gift-givers, providing gift-wrapping services can be a point of differentiation that wins you the sale from your competitors. If done correctly, offering gift-wrapping to customers can also be a small profit center, especially during holiday seasons. But if your foray into offering gift-wrapping is not well thought out and planned in advance, the service can be wildly inefficient, leading to wasted supplies, space, and time, not to mention unhappy employees and customers.

Before you implement gift-wrapping, Framingham, MA-based operations consultant Wayne Teres suggests deciding which products in your SKU mix you’ll offer the service for. “You can’t gift-wrap everything,” he says. Oversize and awkwardly shaped products are obvious contenders for items that should be excluded from gift-wrapping services.

So should products that aren’t generally considered gifts. If you have a highly diverse merchandise line, that could mean as few as one or two dozen items. That’s the case at Madison, VA-based Plow & Hearth, part of Westbury, NY-based 1-800-Flowers.com. The “country living products” cataloger sells everything from garden benches to electric fireplaces to composters. “We picked items that we felt made sense to be gift-wrapped, which totaled about 18-20 items,” says Buzz Van Santvoord, vice president of fulfillment and facility management. “For us, how many products do we really have that are appropriate to gift-wrap? For us to say ‘we gift-wrap anything’ is really ridiculous.”

You also need to determine the precise duties of the gift-wrappers. There are two basic options, Teres says: The wrapper can pass the package to another packer once it has been wrapped, or the wrapper can complete the order himself — choosing a shipping carton, adding dunnage, and the like. Teres advocates the latter option. “Gift-wrapping is not an easy thing to do,” he notes, “and it typically comes at a time when orders are concentrated and the last thing you want is to create a bottleneck at the packing station.”

Indeed, gift-wrapping requires a huge amount of manpower, says Van Santvoord. He estimates that one worker can hand-wrap a mere 12-15 items an hour, depending on the type of product.

And unless you automate (more on that in a minute), you can speed up the process only so much. David Bauer, project manager in distribution for Seattle-based kitchen accessories merchant Sur La Table’s Brownsburg, IN, distribution center, says that “the biggest challenge here is making sure the workers dedicated to gift-wrapping are following the process we set up.” Cutting corners can lead to a shoddy presentation — and given that gift-wrapped packages are almost always especially important items to the customers and their recipients, a shabby wrapping job is highly likely to lead to lost business and bad word of mouth.

Not adhering to wrapping procedures can also lead to excess waste. “We used to gift-wrap by hand,” says Van Santvoord, “but the piles of wasted paper in our distribution center was a crime.”

Ensuring that staff are properly trained can, of course, minimize the likelihood of substandard packaging and waste. And as Bauer observes, wrapping gifts efficiently “is not something everybody can do.”

To facilitate the process, Teres suggests limiting the wrapping choices available to the customer. During the Christmas season, for instance, offer just two types of wrapping: a traditional Christmas-themed paper and a secular option. He also advocates skipping bows and ribbons. “Ribbons slow you down, and bows often get crushed,” he says. “And that only sets up more customer disappointment and complaints.”

And during high season, be sure to delegate someone to be in charge of keeping supplies stocked up at the wrapping station. “A problem we’ve had in the past is that we’ve run out of supplies at a station and the worker would leave to try to track down more supplies,” Bauer says. The resulting bottleneck wasn’t something that Sur La Table could afford, especially given that during the October-January holiday period, gift-wrap requests in its direct channel surge 400%.

MAN VS. MACHINE

Most other functions in the warehouse are automated. So why not gift-wrapping?

Meridian, MS-based Gift Wrap Solutions, which bills itself as “the only source of random-size automation in gift wrapping,” has offered the Big Wrapper machine for about two years, says sales manager Mike Miller, who invented the product. With one person working the machine, it can wrap about 25-30 items an hour — roughly twice what a person could gift-wrap by hand. But at $35,500, the Big Wrapper is only cost-effective for companies that wrap a significant number of gift packages.

Key warehouse personnel are given a short training session when the machine is installed. All merchandise must first be put in a box or already be in a box supplied by the vendor. Spindles suspended about the machine can accommodate six rolls of wrapping paper. The worker selects the type of paper to be used by pushing a button on the computerized touch screen. Then he places the box in the corner of the measuring device and hits the start button. The paper is cut to the correct width; the worker transfers the box and centers it over the paper and up against the machine stop. The length dispensed is such that the leading edge can be wrapped around the box and adhered just past top center. Pushing another button then finishes the dispensing, and the trailing edge of paper will always land on the center of the box ready for adhering. The paper forming the end folds for the box is perfectly cut to size and just requires one fold by hand.

Other features of the machine include a repeat mode, so that boxes of the same size do not have to be measured each time. Sur La Table, which bought the machine in October 2004, uses it during the holiday season to prewrap more than 35,000 units of wine glasses, popcorn makers, and other gift items that it then sends to its 55 stores. Bauer says the machine has already paid for itself with a 40% gain in gift-wrapping efficiency.

Van Santvoord is another advocate of the Big Wrapper. The machine worked so well at Plow & Hearth’s Vandalia, OH, facility, where it gift-wraps products for the company’s HearthSong and Magic Cabin Dolls children’s products catalogs, that Plow & Hearth purchased an additional machine for its Madison, VA, facility. “Until we got the machine, we never offered gift-wrap at the Madison facility,” says Van Santvoord.

PRICING IT RIGHT

If calculated properly, gift-wrapping can yield a modest profit. But as when setting shipping and handling charges, you need to evaluate both direct costs (labor, supplies) and indirect costs (general and administrative expenses, inventory carrying costs).

Most merchants have conducted only brief studies on the expense for gift wrapping, says Bob Betke, vice president of Richmond, VA-based operations consultancy F. Curtis Barry & Co. “For costs they’ll usually include labor and materials, and then they calculate a production rate in terms of packages per hour. Most will then compare that cost to what their competitors are charging to determine what the market will bear.”

A quick glance of the catalog industry finds that most merchants charge $3.50-$6.00 per package for gift wrapping. One marketer was as high as $8.00.

The worst position thing you can do, says operations consultant Wayne Teres, is to offer gift-wrapping at no charge. “That’s a killer,” he says, “because your customers will take full advantage and all your workers will probably go running from the distribution center.”
MDF

SOURCE BOOK

Here’s a sampling of suppliers of paper, boxes, and other gift-wrapping products. Note: Many of these companies will personalize bags, boxes, and even tissue paper with your company name and logo — making the packaging a subtle branding tool.

Gift Wrap Corp. of America www.800-giftbox.com 800-443-8269 boxes, bags, paper, accessories
Gift Wrap Solutions www.giftwrapsolutions.com 601-479-2162 automated solutions
Mac Paper Supply www.macpaper.com 800-486-5783 boxes, bags, paper, accessories
Mr. Giftwrap www.mrgiftwrap.com 877-222-2097 boxes, bags, paper, accessories
Nashville Wraps www.nashvillewraps.com 800-547-9727 boxes, bags, paper, accessories
Nu-Era www.nu-era.com 888-467-8673 boxes, bags, paper, accessories
Seaman Paper Co. of Massachusetts www.satinwrap.com 978-939-2146 tissue paper
Shamrock Gifts www.shamrockgiftwrap.com 800-334-8982 wrapping paper
Uline www.uline.com 800-958-5463 boxes, bags, paper, accessories

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