By YonBee Yang | February 17, 2021
Consumers have turned to online shopping for almost all their needs during this pandemic. In fact, about 91 percent of Americans had packages delivered to their homes just this past holiday season. According to Salesforce, digital sales in the US alone grew by 71 percent with 55 percent in the second and third quarters of 2020, respectively. However, the elephant in the room remains – What about all the packaging? Achieving sustainability in the world of supply chain has been an ongoing effort for many years now, but with new hygiene and safety concerns surrounding reusable packaging due to the pandemic, the progress of environmentally friendly, reusable, and biodegradable packaging technologies has been temporarily put on hold.
Why worry about packaging?
Environmental Impact
Both paper-based and plastic packaging have a significant impact on the world’s forests, wildlife, and climate. Amazon alone shipped 412 million packages in July 2020, and as packages flood into homes, so does the packaging that keeps the contents intact. Herein lies the major problem – the massive quantity of packaging which only seems to be accelerating. The majority of the packaging despite increased efforts to recycle and reuse them end up in landfills or incinerators, and only about 14 percent of the nearly 86 million tons of plastic packaging produced globally each year is recycled.
Customer Engagement
Creating a Fulfilling Consumer Experience to Meet Consumer Expectations
With a variety of uncontrollable variables in the e-commerce supply chain, packaging is one that can be controlled. Overlooking packaging can directly impact consumer experience considering that a recent study shows packaging experience influences 56% of repurchase behavior with consumers. Delivering an easy-to-open package along with a hassle-free unboxing experience are two must-haves in terms of customer expectations whilst ensuring the safety of the product. Apart from the aesthetics and ease-of-use for returns of packages, today’s customers also desire sustainable packaging solutions.
Sustainability might not be the driver for the customer’s purchase but not being sustainable can be a driver to not purchasing the product. Excess packaging can be a major frustration especially when the box is too big for its contents or three items arrive in three separate boxes when it could all have easily been sent in one box. The right sizing of the package can help your business save money while also delivering on consumer preferences.
The Challenge with Higher Return Rates
With your desired choice of product being one click-away, the return rates of items bought online are much higher than purchases made in brick-and-mortar stores. The ability to return items without visiting stores involves the extra step of figuring out efficient packaging to receive returned products without damage. The increased return rate also implies multiple purchases of the same item further implying more packaging.
Sustainable Packaging – No Easy Solution
For any e-commerce player, ‘product damage is the least sustainable option’. The demand to ship undamaged products with sustainable packaging directly to customer’s homes while balancing product protection is a challenging task and differs from traditional retail requirements. In many cases, these purchases require more packaging than bulk items headed to a store. Many companies are experimenting with reusable packaging conducive to a circular economy. LimeLoop provides customers with reusable shipping containers to use around 200 times. RePack is a reusable shipping container service that aims to replace single-use packaging. Companies like Amazon are also experimenting with lighter and flexible packaging. Efforts are being made to design strategic boxes requiring minimal fillers to protect the product and using non plastic, recyclable, and natural fillers where possible. Recycling is no substitute for cutting down on waste in the first place, and the e-commerce giants still have a lot of work to do on that front. However, using materials like corrugated boxes for packaging which have a much higher recycling rate compared to other packaging materials can be beneficial.
Retailers can win their bottom line by building packages optimized for their supply chains. In fact, 72% of Americans would be more likely to purchase again from brands that shipped sustainably according to a report submitted by Ranpak. Each step taken to use less packaging throughout the supply chain reduces volume per shipment and results in a more efficient use of transportation ultimately reducing carbon emissions across the network. There are three main questions retailers are asking themselves in today’s packaging scenario:
- How does e-commerce packaging effect circular economy?
- What are consumer expectations from the unboxing experience?
- How will environmental concerns shape the realm of e-commerce packaging?
Contact Bricz at info@bricz.com to address these questions and to achieve your sustainability goals!
Contributor: Aanchal Narula, Supply Chain Consultant at Bricz