ARE YOU PART OF THE PROBLEM? – INTERNET SALES INCREASE PACKAGING
I don’t consider myself as a prolific shopper but I do buy some products using online shopping especially for Christmas gifts and I would guess that you are the same. Have you ever received a delivery of a parcel and marveled at the volume of packaging encasing the item you purchased?
Here is a picture of one parcels packaging that I received Dec 22:
It makes you wonder how it all fit in the box in the first place! But the good news is that the item was completely protected and arrived undamaged and I can put the paper and cardboard into the city’s recycling program.
The rise of internet sales is creating many changes from marketing of products to survival of brick and mortar stores. It also creates a challenge for use of
packaging that includes types of packaging, design, volume, collection, recycling and disposal. When goods are shipped via the internet they are mostly individually wrapped compared to distribution through retail stores where they arrive grouped on pallets so the volume and type of packaging is changing.
Let’s take a look at some background information and where the industry is going.
- History Online Shopping
Online shopping or e-shopping was first ‘invented’ in 1979 by British entrepreneur Michael Aldrich who modified a TV to a real time transaction processor via a domestic telephone line called Videotex. Aldrich went on to manufacture and install many online shopping systems that allowed business transactions to be completed electronically in real time.
In 1991 the world wide web servers were available and by 1995 Amazon.com and EBay launched online shopping.
In 1995 there were 16 million internet users.
1996 – email on the web introduced – 36 million users
1998 – Google launches – 147 million users online
2000 – 361 million
2001 – online crime an issue – 513 million
2003 – Apple iTunes store – 719 million
2004 – Facebook – 817 million
2007 – iPhone – 1319 million
2010 – China highest number of users – total 1971 million
2013 – 3 billion users with over $1.2 trillion in sales
Internet sales show no sign of slowing.
2. Packaging Increase
Aside from the plastic and cardboard wrapping the products come in, there are the boxes, the labeling and the paper wrapping or foam packing meant to protect what is nestled inside. It’s not unusual to end up with far more packaging than stuff, and the sheer amount of waste that results is staggering.
According to the Environmental Protection Agency, containers and packaging accounted for 30% – or 75.2m tons – of total solid waste generated in the US in 2012. To put that into perspective, we discard our own weight in packaging every 30-40 days, on average, according to Stanford University.
This figure will likely only increase as e-commerce does the same and the magnitude in dollars reflects the demand: protective packaging represents a $22bn industry, with plastic foam alone – mostly expanded polystyrene, aka Styrofoam – valued at $6bn. (Source: The Guardian – Rachel Nuwer and Jennifer Kho – Nov 18, 2014).
These are US numbers but you can imagine the volume on a global basis as internet sales increase.
3. Do Consumers Care?
It is hard to imagine that most people are not aware of climate change and the need to reduce waste in any form. One of our SAP Customers, Sealed Air commissioned a poll on consumer attitudes:
Consumers reveal perceptions, and pet peeves, of e-commerce packaging
E-commerce packaging pet peeves
As online sales of consumer goods continue to grow, so does demand for packaging that meets the shipping requirements of those goods. A recent Harris Poll conducted on behalf of cushioning leader Sealed Air examines packaging’s role in online sales.
The 2014 Sealed Air e-Commerce Survey: Packaging for e-Commerce Success explores issues such as e-commerce growth, order-processing speeds, how packaging reflects on retailers, how it conveys the value of shipments, how product damage affects the consumer/retailer relationship, attitudes toward environmentally friendly packaging and consumers’ pet peeves about packaging.
“Without the right packaging materials in place, online retailers face increased risks of damage during fulfillment and delivery that can not only elevate costs during return and repair, but significantly impact consumers’ perceptions of that business,” says Ken Chrisman, president of Sealed Air’s Product Care Div.
“The benefits of offering the most sustainable, affordable or best-looking package will be lost if it doesn’t perform its primary function—ensuring items reach consumers unharmed,” Chrisman adds. “Our…survey showed that preventing damage through packaging can make the difference between retaining consumers’ future business and losing them to a competitor.”
Two-thirds of Americans think the packaging for their online purchase reflects how much the retailercares about their order and about them. Less than half (48%) of all Americans equate the packaging quality with the product quality; Millennials in particular are prone to making this connection, with 59% of 18- to 34-year-olds believing packaging conveys the shipment’s value. About a third of Americans (34%) see e-commerce packaging as a reflection of the retailer’s environmental commitment.
Shipping-related product damage is a fact of life, with more than one-quarter of Americans reporting they’ve received online orders containing broken or damaged goods. Although only 10% blame the retailer alone for this problem, product damage can significantly affect a consumer’s relationship with a retailer. One-fifth of Americans said they would not buy from a retailer again if an order arrived damaged, and 38% would consider purchasing from a competitor.
The vast majority of Americans (94%) believe environmentally friendly e-commerce packaging exists, but they have varying opinions on what characterizes it. Three-fourths say it is made from recycled materials, and 78% think it is easily recycled. Others point to reusability, compostability, biodegradability or prevention of product damage and returns as hallmarks of environmental friendliness.
Many Americans—68%—are more conscious of packaging design and materials than they were even five years ago. Ideally, they would like those materials and designs to deliver both sustainability and product protection. Fully 77% believe online shipments’ packaging should reflect the seller’s environmental values. Yet only 26% are willing to risk potential damage to their online purchases by retailers using more environmentally friendly packaging materials.
In summary the poll found:
- Consumers of online purchase find packaging hard to dispose
- Packaging reflects on the retailer image and if damage occurs, on future sales
- Most consumers believe environmentally friendly packaging exists as defined by recycle content and recyclability
- Awareness of packaging design and materials has increased
4. Actions to Reduce Packaging
Various factors are at work that encourages a change in volume, type and design of packaging materials driven by consumer attitudes and government regulations. Large retailers like Walmart are pushing suppliers to reduce packaging content and this also can impact the cost of transportation. Here are some examples:
The Side Effects of Consumerism – Large Producers and Retailers Cutting Back on Packaging
By BETH GARDINERNOV. 19, 2014 New York Times
LONDON — British supermarkets are selling beer in glass bottles that are a third lighter than they were a few years ago. Unilever, which makes products like Dove cleansers and Sure deodorant, has pledged to reduce its packaging by a third by 2020. Dell is cushioning computers and server parts with wheat straw and a compostable, mushroom-based material, instead of Styrofoam.
In Britain, Unilever has started selling a compressed version of its Sure, Dove and Vaseline spray deodorants, shrinking the size of cans by half, a change that cuts the aluminum content by a quarter and requires 35 percent fewer trucks for shipping, the company said.
Unilever is also using a new type of plastic, starting in bottles of some Dove skin care, in which embedded air bubbles reduce the amount and weight of the material by 15 percent.
The Ellen MacArthur Foundation is trying to coordinate such efforts, working with McKinsey and the World Economic Forum on an effort known as Project MainStream.
The project is trying to bring companies and cities together to coordinate the design of packaging and arrangements for its disposal. The group hopes to come up with a way to standardize the ingredients in plastic packaging, so any company or municipality can easily become part of one process of reusing and recycling packaging.
“It’s integrating what it takes to design the packaging and what it takes to design the system that captures the packaging after use,” said Mr. Rodger, co-director of Project MainStream.
Across the business world, more companies, mindful of the environment and their bottom lines, are scrutinizing their packaging and cutting the excess. Less packaging means fewer raw materials to buy and lower shipping costs. The changes can also add up to fewer climate-warming carbon emissions and less garbage in landfills.
Innovations to Reduce Packaging by SAP Customers
Graphic Packaging International Wins 2013 AF&PA Sustainability Award
The development of Tite-Pak® packaging demonstrates how a total system solution can generate transformational innovation. The reduction in bottle breakage and packaging material can save customers millions of dollars while also reducing greenhouse gas emissions,” said AF&PA President and CEO Donna Harman.
Graphic Packaging designed Tite-Pak® to reduce the amount of glass bottle breakage without increasing total packaging materials. Research indicates that the implementation of Tite-Pak® has led to a 30 percent reduction in greenhouse gases among the 12 and 18 bottle packs. Graphic Packaging promotes a long-term reliance on paperboard packaging instead of plastic through this innovation.
Mondi’s innovative and sustainable barrier material continues to triumph
On Wednesday, 8 October, the winning streak of Mondi’s “BarrierFilm” continued at the PPI Awards in Boston, MA, USA. The novel barrier liner for soup packaging has also won the 2014 WorldStar Award and the DuPont Silver Award for packaging innovation this year.
BarrierFilm is an innovative barrier material for food packaging that consists of a material mix of paper, polyethylene (PE) and a special coating that provide excellent protection and a long shelf life. It also helps reduce the carbon footprint of the packaging thanks to the removal of the aluminium. According to Mars, the carbon footprint of their instant and packet soup range could be reduced by as much as 25 %. Thanks to the introduction of a special sealing polymer, which helps to reduce the sealing temperature and subsequently lowers the energy consumption, its environmental credentials are further enhanced.
Bischof & Klein GmbH & Co. KG
The new Value Pack of B + K is a large-sized PE-wicketed bag with handle for packing of hygiene products such as paper towels or toilet paper. Such wholesale packings are mainly used in hospitals or industries. The film for the Value Pack is made from 100 % polyethylene and has a wall thickness of 100 μm. The handle is made of 150 μm PE film. The maximum filling weight is 7 kg.
This flexible large plastic packaging replaces the previously commonly used cardboard packaging and contributes to the conservation of resources. A
cardboard packaging for a filling weight of approx. 7 kg weighs around 600 grams. A comparable PE wicketed bag weighs just 145 grams on the scale. This
means a more economical use of resources and less transportation costs. The effect is further enhanced by the fact that e.g. a Value Pack of paper towels can absorb about 15 % more content. An additional advantage is the easier handling by the carrying handle. Target sector: Hygiene products for wholesale customers.
There are five major trends that will continue to deeply impact packaging and its associated industries in 2015: the growing importance of sustainability; the demand for supply chain transparency; the rise of new barrier/coating packaging technologies; continued emphasis on lightweight packaging; and the importance of delivering frustration-free packaging. (Source: Top five packaging trends for 2015 Posted by Ian Lifshitz, Director, Sustainability and Public Outreach, North America, APP, December 12, 2014)
Take a look the next time you order online and receive your parcel and see if the packaging is designed any differently or has easily recyclable materials.