Until recently, packaging optimization was largely overlooked as brands and retailers scrambled to keep up with exploding e-commerce demand and customer expectations for faster deliveries.
Now, packaging has become one of the highest priorities for many e-commerce providers. End consumers have made their voices heard and have demanded that providers focus on waste and recyclability of the e-commerce packages they receive. Providers are challenged with addressing often conflicting sustainability objectives to gain the approval of internal and external stakeholders. Ship your product in a box that seems too big and you’re sure to hear about it from customers on social media. If you shrink wrap packages too inadequately, you risk the product arriving damaged resulting in an even more dissatisfied customer. Move to a poly bag solution to reduce shipping costs and face criticism not only from end consumers for using non-recyclable materials, but also from in-house marketers for diminishing their brand image.
It is no surprise why providers and retailers feel like they are facing a no-win situation when considering changes to e-commerce packaging.
The reality is optimizing packaging can be a challenge as it requires consideration of multiple factors across the supply chain, including fulfillment speed, protection, transportation costs, the “unboxing” experience, and sustainability. Increased focus on packaging from leading 3PLs such as DHL Supply Chain has driven new innovations that enable brands and retailers to drive costs out of the supply chain while addressing issues related to sustainability to deliver a differentiated customer experience.
Here are three of the most promising sustainability strategies providers can turn to:
Research conducted by DHL Supply Chain found that on average 24% of the volume of an e-commerce package is empty space. Shippers struggle to maximize fill density due to all of the other factors that must be considered.
The solution to this challenge can be almost impossible to navigate using traditional processes; however, new technology-based approaches have emerged. Using sophisticated carton optimization algorithms combined with an on-demand approach to packaging within the distribution center helps brands and retailers produce the right package at the right time for each shipment, driving down transportation costs, minimizing waste, and ensuring the product is protected.
Another solution to e-commerce sustainability goals that has been effectively deployed and will likely grow in the coming year is the use of reusable packaging. Reusable packaging creates a closed-loop system in which orders are shipped to the customer in a reusable package and then returned via mail or via a drop-off location. Once the returned package is received at the distribution center, it is cleansed, quality checked, and prepared for the next order.
Material recyclability is also improving. DHL Supply Chain is actively working with manufacturers to develop recyclable poly bag solutions that will enable shippers to achieve their sustainability objectives while leveraging this cost-effective packaging option.
Packaging processes that are siloed from other fulfillment processes resist true optimization. Taking an end-to-end approach to packaging management within the distribution center effectively integrates packaging with other supply chain processes. This allows management staff to be shared across the distribution center, ensures packaging design is aligned with transportation resources and provides the flexibility to make late-stage decisions based on changing conditions.
Fulfillment, packaging and transportation are tightly connected processes and small changes to packaging size and design can lead to huge savings in other areas without compromising packaging performance. Taking a holistic, or end-to-end, approach to packaging ensures that the impact of every change on the entire process is fully considered. It also enables identification of inefficiencies within the supply chain where changes can be made to deliver the biggest benefit.
Packaging is one of the most complex and important processes within e-commerce fulfillment, impacting everything from transportation costs to the customer experience. Working with a 3PL such as DHL Supply Chain that can take a holistic approach to packaging and access the latest innovations in design and management can help you remove existing boundaries so you can develop packaging that improves sustainability, lowers costs, and delivers the desired customer experience.
For more information on DHL’s e-commerce solutions, visit http://app.supplychain.dhl.com/e/er?s=1897772577&lid=6603