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E-commerce Packaging for a Booming Industry

Since 2019, retail e-commerce sales and e-retail revenues have grown exponentially. Companies have been forced to pivot in their business models to accommodate the changes in distribution environments and rethink e-commerce packaging. When brick-and-mortar stores began to close due to COVID-19 disruptions, many businesses had to choose between shutting down entirely and adapting to meet the challenge.

Enter the e-commerce channel.

Brands will need to invest in packaging solutions that are robust, sustainable and consumer friendly as they refine or adopt online retail as part of their business model.

According to Mordor Intelligence, The e-commerce packaging market was valued at $27.04 billion in 2020 and is expected to reach $61.55 billion by 2026.A report from Spiralytics projects the number of online shoppers will reach 2.1 billion in 2021, up from 1.66 billion in 2016.

This growth will force brands to acknowledge the potential of building or expanding e-commerce capabilities. With this increase in e-commerce popularity, distribution environments will change dramatically and make it even more important to consider these changes when designing packaging.

Optimizing Packaging to Stay Successful and Competitive

When designing packaging for e-commerce, it is important to think beyond the current distribution environment and evaluate how primary packaging will perform in future environments as e-commerce and last-mile delivery continue to evolve. It may be worth investing in redesign or innovation and robustness of the primary pack. If a primary package redesign is not feasible, there are a few additional considerations that may help: 

  • How can the secondary packaging be optimized for product protection while avoiding excessive packaging and the use of void fillers? 
  • Is it cost effective to design specifically sized secondary packaging for each product or develop fewer sizes and ship some products with access space and void fillers? 
  • How do companies find the right combination between product size and package size ranges?

Throughout this distribution cycle, a package can pass through up to three times as many touch-points as a traditional distribution environment. By optimizing primary packaging for e-commerce, brands can invest in packaging formats that use less secondary packaging, which can help to reduce shipping costs while preventing damage and providing better functionality for consumers.

Opportunities to Boost Sustainability

Growing in parallel with consumer interest in e-commerce is consumer concern about the sustainability of the products they purchase. This demand drives the use of more bespoke designs that eliminate excessive packaging and new material concepts, such as fully pulp-based, easy-to-recycle mailers.

More than in the traditional retail environment, e-commerce presents an even bigger responsibility to the consumer to reduce waste. In the traditional retail channel, the consumer is responsible for disposal and recycling of the primary package. In e-commerce, the consumer is left to dispose of and recycle all of the packaging (product and shipping packaging and materials).

It also presents increased opportunities to leverage sustainable packaging. Unlike packaging for the brick-and-mortar retail environment, where the look and feel of a package on a store shelf may influence consumer behaviors, many brands can prioritize sustainability over aesthetics for e-commerce packaging. Because consumers do their shopping and purchasing online, the packaging provides an opportunity to community sustainable messaging and recycling instructions.

As requirements for e-commerce packaging solutions grow, new demands emerge to encourage companies to rethink logistics, marketing and supply chain sustainability.

Key considerations for e-commerce packaging

Unknowns Abound during Last-Mile Delivery

Even after accounting for the rest of the distribution environment, the final delivery is difficult to plan for. How the package is handled by the carrier, its exposure to weather and several other factors are beyond the brand’s control. When the package reaches the consumer, however, the experience they have is not with the carrier, but the e-retailer. Damaged packaging and/or product can significantly impact a brand’s reputation.

According to eMarketer, ecommerce damage is estimated to set companies back nearly $6 billion per year, with 58% of Americans saying their relationship with the e-retailer would be impacted by a damaged product, making it important for packaging to withstand a wide variety of conditions it may face during last-mile delivery.

While the current state of last-mile delivery includes plenty of unknown factors, the future of this portion of the distribution environment also includes conditions that are difficult to predict and plan for, and that future may be closer than it seems.  

Amazon, UPS, and Google are already experimenting with delivery drones. Wing Aviation, owned by Google’s parent company Alphabet, has already received authorization from the Federal Aviation Administration to begin delivering goods via drone. When designing e-commerce packaging, companies need to consider what’s around the corner.

Packaging as Part of the Consumer Experience

As new online stores and subscription boxes emerge and physical retail stores turn to e-commerce, customers are prioritizing three benefits when they choose who to buy from online: speed of delivery, reliability, and hassle-free returns. It’ll be those three qualities that will have the largest influence on future e-commerce and omnichannel packaging design.

Choosing delivery formats that enhance the customer experience is a huge added value for businesses and consumers alike. Since most of the world’s shopping is currently being done online, companies have had to compensate for the loss of the consumer’s singular experience of being able to see or touch something on a shelf or rack before heading to the checkout line.

Birchbox, Julep, Trunk Club, FabFitFun and Glossier make the receipt and unboxing of their packaging fun and personalized. With more and more unboxing videos being posted to social media platforms like Instagram and YouTube, the impact of e-commerce packaging has never been greater.

How the package looks on the outside may impact how the product or brand is perceived, even if the product is not damaged. As more consumers move to e-commerce, brands should consider new ways to improve the packaging experience from start to finish.

If new to e-commerce, companies should evaluate a variety of scenarios, including outsourcing packaging, partnering with a third party/co-packer and build an in-house packaging and fulfillment center.

To understand the e-commerce channel, companies need to establish a solid packaging strategy. Adept Packaging has channel audit and market research expertise, internal innovation panels and an established relationship with an Amazon approved testing facility. With a team of over 70 packaging engineers, Adept has the capability and expertise to help companies create an e-commerce roadmap and implementation plan.

At Adept Group, we have engineers that specialize in the design, engineering and qualification of new or redesigned packaging. If you’re looking for assistance developing e-commerce packaging that will withstand its distribution environment and delight consumers, contact us.

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E-Commerce Damage: Why Packaging Matters

Designing packaging specifically for the booming E-commerce market is essential. With up to 15 additional touchpoints in the distribution environment, E-commerce packaging requires more robust, tailored packaging than that which sits on the shelves at your local Walmart.

Understanding the requirements of your product when experiencing hazards like compression, shock, vibration, and atmospheric conditions are paramount to design a package that ensures the product arrives without damage.

Overlooking the additional touchpoints, methods of transport, packaging handlers, storage, etc. when moving from a traditional distribution environment to E-commerce will often leave the product and brand reputation damaged.

Holiday E-commerce Challenges

With the increase in E-commerce sales due to the holidays, trucks are packed with boxes en route to the doorsteps of anxiously awaiting shoppers. During 2018, holiday E-commerce shoppers spent $126 billion, up 16.5% from 2017. With 55% of all sales taking place online, package handlers experience a much higher volume of deliveries.

Between trying to fit as many packages on a truck as possible and rushing to get them all delivered on time, it’s no surprise that damage rates increase as well, especially in packaging not designed for the E-commerce distribution environment.

E-commerce Nightmare

For example, at Adept Group, we ordered tumblers for our associates from a promotional merchandiser for holiday gifts. (Pictured below) To give you an idea of the product composition, these tumblers have a stainless-steel exterior; glass insert and plastic top.

What would have been a beautiful gift for our associates turned into four boxes of shattered glass, a panicked phone call, an extremely compressed shipping timeline and a lot of rework for the promotional company.

The Damage

Our products arrived in four double-walled corrugated boxes with obvious compression damage. When we picked them up to move them, the sound of shattered glass was evident. Separated by single-walled corrugated dividers, the glass insert of 56 of 100 tumblers was in pieces at the bottom of the box, rendering them unusable.

Without the dividers being strong enough to keep the box from compressing, and no padding to absorb any of that pressure, the force of whatever packages were piled on top of the box crushed all of the glass that stuck out above the stainless-steel exterior. This presented several problems:

  • We’ve been forced to delay shipping gifts to our associates, as we wait for the new shipment to arrive
  • The opportunity for shipping gifts to our associates across the globe in Italy before the holidays is quickly closing.
  • This compressed timeline increases shipping costs for us to attempt to get gifts to associates before the holidays.
  • The damaged products caused a production loss of four associates for 2 hours, as we went through the boxes to determine the number of broken tumblers, cleaned up the broken glass and washed the products that were not broken to ensure our associates do not consume glass particles once they receive their gifts.
  • We were covered in piercing glass particle and had to move and dispose of four boxes littered in shards of glass. There were more than a few minor cuts and pokes.
  • Correspondence with the promotional company involved their quality assurance department, resolutions team, our direct contact, and 3 other people; as well as 2 calls and 29 emails to get this rectified.
When the cost is calculated, the price of a damaged brand reputation is the highest. Due to this experience, there’s a high likelihood that we won’t be ordering from this particular company in the future.

Suggestions for a Redesign

This mishap could have been avoided had they used packaging that was designed for their specific distribution environment and considered the rigors the products must withstand during E-commerce shipping. We enlisted our design expert to provide some suggestions that he would make to decrease the likelihood of damage for these products:

Outer Carton: Upgrade the material specification for the corrugated to 44ect BC flute with specific liner and medium specifications that can withstand a single parcel shipment.

Interior partitions:

  • Upgrade the material specification for the corrugated to 44ect C flute with specific liner and medium specifications that can withstand a single parcel shipment. This will add the correct buffer between cups and eliminate glass to glass contact.
  • It’s important to maintain the caliper thickness on the partitions between glasses to keep a snug fit and isolate movement.
  • Raise the height of the partitions slightly to reach the top of the glass lip.
  • Eliminate any chance for the glass portion of the cup to make glass to glass contact. Improved partitions will help with this.

Add an interior top pad: This will allow the glass to compress into the pad, both restricting movement and reducing or eliminating impact and compression damage.

Negative impacts

When damage occurs in E-commerce, it presents unique challenges. With the shipping package being the first point of contact with a consumer, a damaged package can impact brand perception; whereas a damaged product will. Not only does it harm the brand reputation, but it causes frustration, time loss, extra effort, additional spend and frequently, loss of business.  

Designing for ecommerce

If your company has a high damage rate or is just getting into the E-commerce market, consider leveraging an expert to design packaging to avoid these pitfalls.

Understanding the product needs, having visibility into the distribution environment, and having access to the materials and expertise needed to develop packaging that protects the product is pertinent for success in the E-commerce market.

For any questions regarding quality remediation or new package development for E-commerce, contact us. Our experts are happy to help.  

For additional tips for designing E-commerce packaging, check out our white paper: Evolving Packaging for the Ecommerce Market in our resource library.


Follow-up (second shipment):

If you’re thinking, perhaps this shipping experience was an anomaly, you’d be wrong. The same company, shipped the same product, in the same packaging, through the same distribution environment, and guess what? We got the same result. Half of the tumblers in the second shipment were also damaged and unusable. 

Long story short: Packaging matters. Design packaging for the E-commerce market with your product and distribution environment in mind to avoid loss of business and a destroyed brand reputation. Contact us for assistance! 

Tips for designing sustainable ecommerce packaging

8 Tips for Designing Sustainable E-Commerce Packaging

With the continuous and exponential increase in E-commerce sales within the last several years, it is apparent that any business who wishes to perform globally needs to be optimized for it.

As consumers continue to demand more environmentally friendly packaging, sustainability needs to be a top consideration when designing packaging for the E-commerce market.

In a recent white paper, Design Packaging for E-Commerce with a Sustainable Mindset, which can be found in our resource library, our sustainable experts discuss what E-commerce is, why it’s so important, and how companies are preparing for the huge shift in distribution.

As an added bonus, we thought it might be helpful for companies wishing to design sustainable E-Commerce packaging, to have access to these 8 considerations:

1. Align Your Goals

Make sure you align your sustainability strategies, priorities, and actions with your stakeholders (suppliers etc.).

2. Design for Recyclability

Avoid over designing with special inks, coatings, or lamination that can reduce the recyclability and sustainability of the packaging.

3. Avoid Over-Packaging

Minimize the amount of material included in your packaging. Not only does it reduce material waste, but it reduces material cost, inventory, transportation weight, and storage cost.

4. Know Your Product

Explore shipping options outside of the standard cardboard box. Understand your product needs to determine if your packaging must be water-resistant, flexible, soft etc. and redesign with a sustainable mindset.

5. Avoid Excess Padding

Remove foam peanuts, shredded paper, etc. and utilize inserts instead if necessary.

6. Avoid Mixed-Materials

Avoid paper-out, poly bubble lined mailer envelopes. The mixed-material composition makes it difficult to separate and prevent them from being recyclable.

7. Choose Sustainable Materials

When deciding on material options, consider biodegradable, compostable and recyclable options.

8. Communicate Recyclability

One of the biggest issues in waste reduction are consumers. Educating and communicating the end of life options for your packaging is necessary so consumers understand how to close the loop.

If you need assistance developing sustainable E-Commerce packaging, contact our APASS certified sustainable experts.

Download

For a downloadable version of these tips, click the pdf below.

Sustainable-Ecommerce-Packaging-Infographic

Sources: https://www.environmentalleader.com/2019/04/6-tips-for-eco-friendly-dtc-e-commerce-packaging/
https://www.zaproo.com/sustainable-ecommerce-packaging/