Despite the opportunities for increased profitability and better customer satisfaction retailers are still overlooking the benefits of optimising their packaging when it comes to delivery, says Isabel Rocher, head of ecommerce at DS Smith.
As a whole, packaging performance in e-commerce is far from optimised: it hasn’t caught up with the rapid movement of the industry. The packaging is often too large, meaning boxes can be half empty and do not offer appropriate protection to the contents. These factors can significantly increase costs for retailers.
The e-commerce supply cycle has up to 50 touch-points, 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 found that 39% of shoppers who have bought something online are concerned by excess packaging, while 15% worry about how to recycle packaging.
This concern has increasingly led consumers to act. 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.
Adopting a one-size-fits-all approach may initially simplify operations but in the long run, e-tailers need to develop right size packaging which not only ensures products arrive safely and maintains a brand’s reputation but also streamlines costs.
Hitting the bottom line
Ultimately, poor packaging decisions don’t just impact the way a company is perceived and jeopardise 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 shipping 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 optimised 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.
Reducing the gap
The good news is that technology is now available to help e-tailers design packaging fit for purpose. We have recently launched a customisable packaging solution which enables e-tailers to manually create 339 different box sizes in a quick and easy way.
Creating a correctly-sized pack lowers costs for e-tailers by reducing both operational and shipping costs – saving storage space, and cutting labour costs, order administration, assembly and packing times. It also significantly reduces product movement, helping to reduce damage.
The new technology 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 and means retail customers don’t need to dispose of void fill.
There is still work to be done however. We need to work together with e-commerce retailers to address this issue and continue to innovate and create packaging that is highly efficient in its use of space, even when multiple, differing objects are delivered together.
Isabel Rocher is head of ecommerce at DS Smith.
Image credits: DS Smith and Fotolia