E-commerce has completely changed the way we shop, reshaping the economy and distribution channels. It has become a must-have during a global pandemic such as COVID-19. E-commerce provides a safe alternative to shopping in-store for many consumers. In addition, consumers are increasingly looking to the internet for lower costs, comparison shopping, and the opportunity to locate unique products. E-commerce continues to grow rapidly. Sales between 2014 and 2018 are expected to grow a cumulative 88.4 percent. As the rapid growth of E-commerce continues, new challenges and opportunities are presented and retailers must continue to adapt.
With more products being bought online than ever before, more packaging is ending up in the waste stream. E-commerce continues to be a key source of growth for many industries. With this growth comes an increased focus on environmental responsibility for retailers.
“Packaging is beginning to affect a greater portion of a company’s global operations”, according to Tom Blanck, principal and practice leader in the Packaging Optimization Practice of Chainalytics. Improvements in that area “have the opportunity to ripple throughout the supply chain.”
Optimizing Processes and Strategies for E-Commerce
The first step is to understand the specific needs of packaging and how delivery in an e-commerce channel is different from a traditional retail channel. The retailer is replaced by the consumer as the focal point in the process which adds many logistical complexities. Large quantities of products are then shipped to fulfillment centers where they are broken down and prepped for shipping. From there transport providers such as UPS, FedEx, and USPS collect parcels and aggregate regional packages for home delivery.
Ameripen’s recent whitepaper ‘Optimizing Packaging for an E-commerce World‘, points out that, in this new environment, the three-level packaging system designed for palletization and retail display becomes less efficient. In some cases, it may be less important for the primary package to serve promotional purposes and other attributes deemed necessary in a retail environment. Secondary packaging (from the fulfillment center) now plays a crucial role in product protection and in many cases replaces the need for tertiary packages.
When modeling packaging for a high-value item such as phone, the differences between retail and e-commerce packaging can be significant. The primary package of the phone box would be the same, but the secondary and tertiary packaging would differ depending on if the phone is being sent to a store or directly to a consumer. The e-commerce scenario would to be in a larger corrugated box with protective packaging such as air bubbles. The retail scenario would pack multiple phones in a larger shipper. There would be no pallet for the e-commerce scenario, but a pallet is required for business to business. The transportation also differs between the two, with a smaller truck being used for the direct to consumer. The LCA results conducted through EcoImpact-COMPASS show the retail scenario reduces environmental impact across all of the indicators, on average by 43%. It is worth mentioning that this is one example and it does not include the transportation impact of the consumer having to drive to the store to buy the phone in the retail scenario.
Leveraging Systems-Based Thinking
Optimizing package design and material selection for the needs of the entire system as well as the environment also becomes increasingly important. Optimized packaging for e-commerce may look much different than for traditional retail, due to the different demands of the respective distribution chains. The International Safe Transit Association (ISTA) has laid out step by step guidance on transport package optimization in its Responsible Packaging by Design guide.
“Current thinking is moving from “reduce” to “optimize”. Reducing packaging materials must be balanced with package performance as it applies to or impacts product protection. Serious consequences can result from carrying the packaging material light-weighting.” Source: Innventia AB Model, Global Packaging Project, 6/10
Data-Driven Package Design
A package’s main function is always to provide protection for the product and if it fails to do so it cannot be considered sustainable. It is recommended to get expert assistance from ISTA testing labs to find the optimum balance between material usage and protection.
Screening LCA solutions such as EcoImpact-COMPASS should be used during this process to facilitate material selection and concept development decisions to view environmental feedback, identify hotspots for improvement, and track the progress of your sustainability journey.
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