The importance of getting packaging right for e-tailers

A look at how packaging optimization can increase efficiencies and reduce costs for e-commerce businesses

11Jul

While e-commerce is rapidly accelerating, the packaging performance of the industry is far from optimized. The packaging is often too large, meaning boxes can be half empty, resulting in excess waste and a lack of appropriate protection for the contents. These factors can significantly increase costs for retailers, in terms of transportation, waste and damage.

The e-commerce supply cycle has up to 50 touchpoints, each with its own unique risks, which means there are potentially 50 separate opportunities for a package to be mishandled, damaged or lost.

What’s more, the damage to a company’s reputation if it uses oversized packaging is significant. Recent research by DS Smith, a leading British-based international packaging business, found that 39% of shoppers who have bought something online are concerned by excess packaging, while 15% worry about how to recycle packaging.


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Brand reputation

In the last couple of years, customers have gone online to name and shame businesses that have sent out products in unsuitable packaging. The tide has turned and e-tailers cannot afford to ignore the issue.

With so many e-commerce businesses around, differentiating from the competition has never been more important, so it is important that brands are providing the best customer experience possible. Adopting a one-size-fits-all approach may initially simplify operations but in the long run, developing the right size packaging will not only ensure products arrive safely and maintain a brand’s reputation but will also reduce waste and streamline costs.

Reducing costs

Poor packaging decisions do not just impact the way a company is perceived and jeopardize a product’s safe delivery – they also waste money. Oversized packaging means a company’s costs for raw materials and transportation are higher, with many businesses paying to ship masses of empty space. This results in more lorries on the road and a larger carbon footprint as well as higher production and operational costs.

In contrast, an optimized packaging range can significantly reduce costs. Businesses end up paying much less for the transportation of goods and if a box is made to fit the product it’s carrying, there is less chance of damages and returns, which also costs e-tailers dearly.

Innovative technology

The good news is that technology is now available to help e-tailers design packaging that is fit for purpose. Among those companies offering such solutions, DS Smith has launched a customizable packaging solution which enables e-tailers to manually create 33 different box sizes.

According to DS Smith, the technology, called Made2fit, is estimated to reduce void fill by 80% on average, and achieve a potential cost saving of 30% on inbound and outbound shipping.

Solutions such as these can increase an e-tailer’s profitability, as well as create packaging that offers a great end-user experience. Right-sized packaging shows that a brand has a focus on sustainability and curbing waste.

There is still work to be done, but there is no reason that companies of any size cannot have an optimized packaging range, it just takes a solid operations strategy.

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