The Future of Retail: Trends in E-commerce Packaging
More companies are adjusting to the recent increases in online sales by developing their digital presence and e-commerce services. eMarketer states, "…much of [the digital transformation] has already been underway for most of 2020. For example, 51% of respondents increased their e-commerce investments in the past six months. And 64% said they plan to invest in the next six months." With so many retailers focusing on e-commerce, retail is becoming a digital-first market.
The National Retail Federation confirms a significant growth in online sales this season, saying, "Holiday spending has the potential to shatter previous records, as the National Retail Federation today forecast that holiday sales during November and December will grow between 8.5% and 10.5% over 2020 to between $843.4 billion and $859 billion." With this growth, e-commerce retailers need to consider how they operate to meet this upward trend.
Amazon Will Take the Lead
Amazon leads in sales, as ROI Revolution reports. However, the online retailer expects supply chain challenges will offset profit, as the company ramps up the number of delivery vehicles to keep up with demand. Due to the pandemic, strains on the supply chain concern the retailer, but estimates indicate a modest profit for the company.
Vendors need to take advantage of incentives that companies, like Amazon, provide to minimize the cost of selling online, as shoppers expect shipping to be free. Starting in 2018, Amazon established the guidelines for Frustration-Free Packaging (FFP), and since then, the company has added to the benefits and standards for meeting FFP certification. Sellers on Amazon must decide to change packaging to qualify for certification or to lose out on shipping costs. The e-commerce giant also increasingly requires sellers to use more recyclable containers.
Amazon launched the Amazon Packaging Support and Supplier (APASS) network to support vendors, sellers, and manufacturers in certifying their products as FFP, Prep-Free Packaging (PFP), and Ships-in-Own Container (SIOC). Certified members of the network, like H.B. Fuller, support packaging suppliers to qualify for all three tiers.
Customer Expectations for Packaging
Customers prefer packaging that does not waste material or space. For example, the use of a larger package where a flexible package could be used goes against consumer expectations. Using appropriately sized packaging also reduces the cost to transport an item and deliver it. And, to make sure items arrive safely to consumers' doorsteps, corrugated packaging provides excellent protection during transit. Corrugated is highly recyclable, which also can support companies meet sustainable packaging goals.
Brands need to communicate to customers that they have shared values, and as such, conveying a dedication to environmentally friendly packaging earns customers' trust. In addition, the packaging itself becomes a brand ambassador as more and more manufacturers use custom branding on one of their biggest touchpoints with customers, as Shopify notes.
Green Innovation in E-commerce
Sustainability factors a great deal in the move to online shopping, not only in packaging, but in how items are delivered. More and more shipping companies are deploying electric vehicles, as NPR notes. These new vehicles can help reduce the environmental footprint of delivered goods, in addition to reducing pollution in populated areas. Many automakers are planning to move to green energy, including Rivian, Ford, and General Motors. Although delivery trucks make up a small number of vehicles on the road, these trucks may also cause more pollution than standard cars, so a move to electric transportation makes more sense. Companies also stand to save on fuel costs with this change.
In addition to automotive sustainability, electronic drones are becoming more viable as transports for packages. Drones reduce congestion on roads, speed up delivery times, and cut emissions. Packaging Europe found the huge potential for unmanned aircraft, which could allow companies to deliver to 250,000 more consumers and boost the variety of products available to residents in drone delivery areas.
Packaging Europe predicts many more benefits of drone delivery: "…[the] average U.S. metro area could save the average consumer up to 56 hours per year by reducing unnecessary errands and trips; generate up to $284,000 USD per year in new sales for a typical restaurant; reduce vehicle traffic by 294 million miles per year, equivalent to taking 25,565 cars off the road; avoid up to 568 car crashes per year; and displace up to 113,900 tons of CO2 per year, equivalent to planting 46,000 acres of new forest."
H.B. Fuller Has E-commerce Solutions
At H.B. Fuller, we have developed solutions that solve challenges related to e-commerce and transportation. Our products optimize the customer experience by improving the ease with which consumers can start using their new items. Contact us to see what solutions would best suit your needs so you can keep ahead of the e-commerce curve.