E-commerce has boomed over the past decade, and the trend won’t be slowing down! According to BigCommerce.com, e-commerce is growing 23% year-over-year, and 67% of Millennials reportedly prefer shopping online versus shopping in brick-and-mortar retail stores. With more and more people shopping online and more businesses offering online retail, the packaging industry has needed to adjust to accommodate more single-parcel shipping and ensure secure carton seals. E-commerce has boomed over the past decade, and the trend won’t be slowing down! According to BigCommerce.com, e-commerce is growing 23% year-over-year, and 67% of Millennials reportedly prefer shopping online versus shopping in brick-and-mortar retail stores. With more and more people shopping online and more businesses offering online retail, the packaging industry has needed to adjust to accommodate more single-parcel shipping and ensure secure carton seals.
For their seventh mission, we asked Caroline, Tristen, and Kari to do some digging on the rise of e-commerce and how it is impacting the packaging industry.
Caroline: Changing the Standards
The packaging industry directly relates to the industries of the products being packaged, and evolves to meet the changing needs and trends of these industries. E-commerce has drastically changed retail shopping and continues to engulf other consumer sectors, an example being grocery retail. So how does this impact the packaging industry?
The standards set by E-commerce have forced packaging to evolve to meet these needs. E-commerce is driven by the ease of placing an order and receiving it quickly at your door step without any trips to the retailer needed. This seemingly simple process for the consumer is a complex one for the packaging industry considering the packaged product is being touched 20 or more times during transportation compared to 5 times in the traditional retail process (2017). To account for this, packaging needs to be able to handle automation, prolonged distribution, and be standardized to account for high demand.
Products are packaged and delivered in both single parcel shipments and large bulk shipments, and packaging differs among these approaches. Large bulk shipments are less likely to be handled manually, which reduces the chances of damage from handling and is further driven by automation. This means that packaging must be easily unitized and are often designed with little curbside appeal. Single parcel packages are designed for delivery appeal with both extensive graphics, closures, and overall functionality to create a unique experience. Single parcel packaging is typically heavier and produces more packaging waste than bulk packages due to concerns over damage, which are driven by the slim margin of error when shipping 1 product as opposed to a larger quantity.
One challenge with single parcel/E-commerce shipments is maintaining a secure carton seal. Sealing is a vital aspect to a package as it is the last line of defense to ensure customers get their product in good condition as well as discouraging theft. A proper seal, and importantly the right kind of seal whether it be tape or glue, keeps foreign material out of the package and assists with structural integrity. If flaps aren’t properly secured they’ll collapse or fail under a weight that would be tolerable otherwise. However, making a carton seal too secure can hinder ease of opening and functionality once the package is delivered. It’s important to consider all aspects of a package and its end delivery including product protection, anti-theft, ease of opening, and functionality to execute the right seal.
The primary function of packaging is to protect the product, and the demand for products delivered in perfect condition tend to lead to over-packaging. A common example of over-packaging is a product shipped in a box that appears too big. Amazon addressed this problem in 2016 by developing “frustration-free packaging” through the Amazon Packaging Certification Program. The program outlines the benefits of more sustainable and “right-sized” packaging including reduced environmental impact, damages, and costs throughout the supply chain leading to customer satisfaction (Mohan 2016).
Not only are companies modifying their packaging to prevent damage, but are also adding anti-theft functionality. Packaging is designed with interlocking walls that when folded prevent access to the product as well as tongue or folding locks that when tamped with damage the package extensively. Additionally, E-commerce packaging have little graphics or decoration that might reveal the product being shipped, which would make the package more susceptible to theft.
Mohan, Anne Marie. “How e-commerce is changing the packaging landscape”. Packaging World, 3 May2016, https://www.packworld.com/article/trends-and-issues/e-commerce/how-e-commercechanging-packaging-landscape. Accessed 26 August 2017. “The Rise of E-commerce and its Impact on Packaging Waste”. Reclay StewardEdge, 17 May 2017,http://reclaystewardedge.com/insights/blog/rise-e-commerce-impact-packaging-waste/. Accessed 26 August 2017.
Tristen: Analyzing the Growth in E-Commerce Security
Companies like Amazon have sparked a boom in E-Commerce that is only going to accelerate, and with this revolution in commerce comes drastic changes in the packaging industry, especially secondary packaging. Traditionally, products have always been shipped via bulk shipments, also known as freight, however E-Commerce relies on rapid, reliable single parcel shipments.
Smaller single parcel shipping is much more expensive than shipping in bulk. This determines the packaging dimensions and materials, and creates significantly more waste in single parcel shipping than freight. This is because it’s much more efficient to ship larger quantities of an item.
The advent of e-commerce and a rise in single parcel shipping has also led to a proportionate rise in packaging waste due to significantly more packaging being used. Some companies, such as Dell, are thankfully making large strides to rectify this by using new materials such as bamboo and packing to size. Along with an increase in material is an increase in the handling of packages, imposing a much larger challenge of maintaining secure carton seals. Companies are focusing on improving carton seals, as they are the last line of defense against protecting the physical product. I believe retail space is slowly being phased out and ultimately all shopping will be done virtually. Therefore, it is especially critical that companies continue to make these advancements in e-commerce packaging.
“Differentiating Delivery: How to Win the ECommerce Battle.” How to Win the ECommerce Battle for Post and Parcel Delivery – Accenture ETailers Research. N.p., n.d. Web.”Effects of Ecommerce on the Packaging Industry.” DSSmith.com Packaging. N.p., 8 Sept. 2015. Web.Rahman, Mohammed. “What Is the Difference between Freight and Shipping?” LinkedIn. N.p., 30 Apr. 2015. Web.”The Rise of E-commerce and Its Impact on Packaging Waste.” Reclay StewardEdge. Reclay StewardEdge, 17 May 2017. Web.
Kari: The Shift to Single Parcel Shipments
E-commerce is completely changing up the way goods are exchanged. The way products are being sold and shipped is constantly developing, which is also influencing change in the packaging industry. It is becoming more common that items are being shipped individually, direct to location instead of in bulk to one specific store. However, it is more expensive to ship items individually than in bulk. One way retailers overcome this increased cost is that they might include shipping costs in the purchase price. The goal is always to keep costs as low as possible, and with the technology that the packaging industry has developed, that is an even more obtainable goal today. Due to the popularity of E-commerce, you see items being shipped using many different materials depending on what the product requires for secure shipping.
Packaging is different for single parcel shipments because the items tend to be more customizable. This means the packaging needs to be able to work in more ways to hold either different or similar items. This causes the carton sizes to be larger in some circumstances. When the carton size is larger and there are not as many items to keep everything in place, like in bulk packaging, there is a need for filler packaging to cushion the item(s). One type of filler packaging that is more common is made of plastic film that has large air pockets. This type of filler became popular because it costs very little compared to alternative options.
One of the biggest challenges of maintaining secure carton seals for E-commerce shipments is the amount of handling each box undergoes. In bulk shipments, packaging usually has the support of pallets and the structure of many individual packages to provide support and reduce the movement of each package. During single parcel shipment, the package does not have additional support. Also, there are so many packages going different places that they tend to be rounded up and then divided off multiple times, which means the package has to undergo a lot of transportation exchanges. There is such a high demand for packages to be shipped quickly, that often the packages are not handled with the most care, so the structure of the packaging has to be durable. If a seal is broken and the contents are separated from its packaging it is hard to track where that item was meant to be shipped and will more than likely lead to damage caused to the item. Therefore, the product will likely not reach the consumer in a satisfactory manner, if at all.
E-commerce packaging has to be able to adjust for various orders, and the packaging tends to have more waste because of the larger size used to accommodate this style of shipping. The size is larger, therefore using more material, and there is more filler inside the packaging. One way to minimize the waste would be to have more sizing options that fit the item(s) without much room to spare. With less space inside the packaging there will be less filler packaging needed. Recycled and biodegradable filler materials are popular as they reduced financial and environmental costs.
It is of utmost importance for E-commerce companies to ensure that they have adequate packaging so that the goods are received in perfect condition. Often companies will have to pay more and spend more time to replace goods that are lost or received in poor condition. It will be significantly more cost effective to ensure the packaging is durable enough to protect the item(s) the first time around. Also, consumers are less likely to purchase more items from a retailer that sends damaged goods. The retailer should ensure the products reach the consumer in quality condition to maintain a relationship with that consumer. Without a secure seal, none of this is possible. It is the first line of defense to ensure the packaging makes the trip without sacrificing quality.