The rapid and vast expansion of e-commerce presents new challenges in shipping and packaging. Once, consumers shopped online through choice, a year ago it was through necessity, and now it is a consumer habit that is unlikely to recede. This increased volume of shipped products means packages are travelling further, wider and for longer.
Joe Cook, vice president of Delta Global, a packaging solutions provider for luxury fashion brands, explains how this has created a new, essential requirement for brands and retailers wishing to maximise e-commerce opportunities: robust and protective packaging.
A closed high street, travel restrictions and several lockdowns. Just one of these constraints would have driven consumers to e-commerce in record numbers. The near-simultaneous arrival of all three created retail uncertainty for a significant period and a brought forth a likely permanent consumer shift.
According to a Shopify global survey of eleven markets, 84% of consumers consistently shopped online in 2020. Given the conditions of retail this past year, this is hardy an earth-shattering revelation. What is interesting, however, is the breakdown of that percentage.
Those of us that have follow e-commerce forecasts are familiar with reading about older shoppers being reluctant to move online. This was a portal for Gen Z and Millennials, whose lives are lived in a perpetual online sate. The past year proved otherwise, with over 50s quickly and comprehensively embracing the new e-commerce reality.
We are now currently amid a climate where all demographics are accustomed with e-commerce shopping. It would seem highly unlikely that reliance on online shopping will be reversed, when consumer demand for speed and ease is higher than ever, with 70% of shoppers declaring rapidity and ease as their priorities.
The packaging journey
With the number of shipped products rising, more packages are travelling through cross-border logistics networks. As they pass though, the number of touchpoints increases, and the risk of damaging products and packaging significantly rises. On average, an e-commerce package is handled 20 times more frequently than shop-purchased goods.
Traditional retail does not pose such a risk. In that framework, a consumer product would travel from the manufacturer to the warehouse, then to the retailer and, finally, to the consumer. But the e-commerce process can add an indefinite amount of stops along the journey to the purchaser.
After the warehouse, a ‘fulfilment’ process is added, before products are sent to be stored and picked at local sortation centres. Then, delivery companies can handle the ‘last mile’ of the journey in various ways, passing product and packaging to one delivery person and location to the next. Then we have the additional complication of returns, which double this elongated process, in reverse.
A recent DHL survey revealed that around 50% of e-commerce customers would not likely purchase again from a retailer if a package arrived with damage. Brands that do not have a robust protective packaging solution are jeopardizing the opportunities that e-commerce presents them.
Sustainability and the wow factor
If you were to pick a retail report to study at random, there is a good chance that you would encounter the issue of sustainability. Consumers demand and expect - and will even pay more for - sustainable products. This is especially the case with packaging. At Delta Global, all our packaging is produced to the highest sustainability standards.
We do this for two reasons. The first is the ethical responsibility we have as a packaging producer, which is central to our business model. The second is: market, consumer, and government legislation across the globe are heading steadfastly in the direction of sustainability. To avoid sustainability is a commercial misstep akin to avoiding protective packaging.
Therefore, any protective packaging solution needs to incorporate sustainability. And, if e-commerce companies wish to fulfil consumer expectations, they must also think carefully about providing the ‘wow’ factor in packaging design.
The rise of the unboxing video and the organic marketing opportunities that offers is not to be ignored. If your e-commerce platform isn’t creating packages with the unboxing experience in mind, your competitor likely is. A memorable unboxing experience can turn an e-commerce purchaser into an e-commerce customer.
Protective packaging challenge
Combining sustainability, an unboxing experience and protective packaging is a challenge that e-commerce retailers must meet. The market requires this to be achieved without reliance on traditional protective packaging, such as kraft paper, air pillows and bubble wrap. They can leave heavy carbon footprints - and the presence of plastics defies the wants of the consumer.
Generally, protective packaging does not perform well regarding performance and sustainability. Either the packaging concedes too much to unsustainable materials in pursuit of protection, or its sustainability credentials are robust, but its protective elements are not.
And, according to DHL, more than 24% of e-commerce packaging is empty space. Consumer awareness of plastic pollution and excessive waste means the current model of packaging is neither environmentally nor commercially tenable.
The answer for e-commerce retailers and brands is to switch to packaging specialists who can manufacture sustainable, protective packaging, incorporating brand story and an unboxing experience that retains customers. To delay in doing so is to forfeit those customers to competitors that are doing packaging better.
And in an uncertain retail environmental, this could cost more than missing e-commerce growth. The price to pay may be the sustainability of the business itself.