The Challenges of E-commerce Packaging and Customization
In our global economy, where a box can traverse the world before reaching its intended destination, the packaging industry faces new challenges in meeting the demands of the rising e-commerce market. As commerce multiplies, supply chains flatten, delivery routes expand, and products are expected to ship and arrive faster than ever, businesses must explore ways to optimize their packaging processes to benefit their operations, customers, and the environment. One solution that holds promise is the utilization of on-demand boxes, which provide a customized and efficient packaging solution. In this article, we will examine the challenges of e-commerce packaging and explore how on-demand boxes can address these challenges.
The Rise of E-commerce and Packaging Challenges
Packaging plays a vital role in delivering products to customers on-time and in perfect condition. Traditionally, paper packaging has been a popular choice due to its sustainability and available protective coatings that can help prevent damage. However, as e-commerce has evolved and grown, paper packaging has met limits that need to be overcome in order to continue delivering the best possible solutions now and in the future. Retail e-commerce sales are expected to grow from 5.2 trillion in 2022 to 8.1 trillion in 2026. In fact, over 20% of all retail purchases are expected to take place online in 2023.
The sheer scale and volume of e-commerce often means that hand-cutting of packaging to fit an unusually-sized niche product is out of the question. For more average orders, customers may bundle together a variety of differently sized products, such as the big box store order that includes a blender, a lipstick, and a twelve pack of paper towels; or they may order a number of items that don’t match the limited box sizes that are available.
This presents difficulties on the packing side, particularly for warehouses, as they struggle to accommodate irregularly shaped items that don't fit neatly into standard boxes. Also, it results in a large percentage of shipments requiring additional wasteful materials, such as air-filled plastic, to help minimize damage and keep the items stable – which itself doesn’t always work. Customer relationships can be strained by damaged goods, as well as the perceived waste and nuisance of oversized boxes, multiple deliveries, and unsustainable packing materials. Numerous surveys indicate that a substantial percentage of consumers prioritize eco-friendly packaging when making purchasing decisions, with more than 60 percent of respondents saying they’d pay more for a product with sustainable packaging.
The supply chain continues to grow and adapt in response to consumer demands and the realities of our post-pandemic and current geopolitical landscape. Putting reliable systems in place now to increase flow, minimize waste and returns, and optimize operations will help businesses meet these current challenges and future-proof for continued growth and agility. Automated packaging is a viable solution to these challenges.
The Benefits of On-Demand Boxes for E-commerce Packaging
Right-sized, on-demand packaging presents an important shift in e-commerce packaging, which harnesses intelligent automation to address matching packages to orders with greater efficiency, greater sustainability, and better protection against potential product damage.
One of the key advantages of on-demand box systems is their ability to produce boxes precisely when needed. This means products can be precisely fitted into boxes, improving the flow and yield in both warehousing and e-commerce operations. Gone are the days of, eliminating oversized boxes with wasted space and inadequate protection. With on-demand packaging, every product finds its perfect match.
Another significant benefit of on-demand packaging processes is the substantial reduction in material usage. This streamlined process not only supports efficient operations but also contributes to overall sustainability efforts.
Case Studies of Companies Using On-Demand Boxes for E-commerce
Let's take a closer look at how two different companies successfully implemented on-demand box systems to tackle their e-commerce packaging challenges.
As the first nonprofit organization to create an e-commerce auction site, shopgoodwill.com ships out hundreds of donated items each day, with listings from Goodwill locations all over the country. Goodwill sells a wide variety of items from apparel to electronics, and any number of disparate, unlike items could be ordered by any given customer. This makes safe and efficient packaging an ongoing challenge.
The organization wanted to create stronger packaging for less damage risk, improve the customer experience, and streamline the process from the warehouse. Since implementing the on demand packaging solution at their Orange County warehouse in 2017, shopgoodwill.com has reached these goals and then some. Now that they can create a wider variety of box sizes as needed, on demand, the need for large box inventory storage has been eradicated. Shipping efficiencies have been achieved, enabling more items to reach customers, without damage, each day.
Virginia-based Crutchfield has been providing its customers with sound equipment and expert service for over 25 years. However, the company’s success and exponential growth created a new problem: their warehouse technology was antiquated and could not keep pace with customer demand in an e-commerce paradigm. Manual pack stations and packers handling a high volume of orders was impacting the staff, on-time delivery and the company’s carbon footprint.
The company initially partnered with Packsize in 2013 and has seen resounding success. More recently, Crutchfield upgraded to Packsize’s latest innovation; the world’s first fully automated erected box system. The automated system was the perfect solution to help Crutchfield take their automation to the next level, producing a ready-to-pack, right-sized box for every order. As a result, the warehouse can now pack over 450 boxes per hour, use less corrugated and filler, use truck space more efficiently and continue to reduce their carbon footprint.
“[The] automated packaging has been a great platform for us. It makes the box, seals the bottom, and just injects it onto the conveyor,” said Chris Groseclose, Chief Fulfillment Officer for Crutchfield. “It’s a quality of life improvement for the operators. It’s an efficiency gain for us. It hits the volume, it’s fast, the machine’s reliable. We’re significantly impressed.”
The Future of E-commerce Packaging with On-Demand Boxes
E-commerce will continue to experience growth and the packaging and distribution industries must continue to innovate and adapt. According to a recent packaging report from R.R. Donnelly & Sons, decision makers are adapting to changing customer and business demands with 66% reporting they are likely to make changes to current packaging to improve sustainability and reach ESG goals.
Companies that can pivot their packaging processes to adapt to consumer demand will be well-positioned to capture the market.
The Megatrend of Right-Sized Packaging
The importance of packaging, particularly sustainable packaging, is growing rapidly. The shift away from plastics towards more environmentally friendly alternatives, such as paper, is gaining momentum. Right-sized packaging, in particular, is a megatrend that is poised to become the industry standard. Many companies, including industry giants like Ford, Target, Walmart, and Amazon, are recognizing the significance of sustainable and right-sized packaging. Not only is it the right thing to do for the environment, but it also aligns with consumers' desire for a more personalized and sustainable shopping experience.
Another exciting aspect of on-demand box technology is its potential for further innovation and integration with emerging technologies. As the e-commerce industry continues to push the boundaries of automation and digitalization, on-demand box systems can complement other cutting-edge technologies like artificial intelligence and robotics.
As we look ahead, the evolution of on-demand box technology holds immense potential to revolutionize the e-commerce packaging landscape and contribute to a more sustainable and technologically advanced future.
The increasing demand for sustainability and eco-friendly practices in the e-commerce industry underscores the importance of on-demand boxes. Consumers are becoming more conscious of their environmental impact and are actively seeking products from companies that demonstrate a commitment to sustainable practices. By adopting on-demand box systems, businesses can significantly reduce their carbon footprint and minimize the use of non-recyclable packaging materials like plastics. This eco-friendly approach not only appeals to environmentally conscious consumers but also helps companies position themselves as responsible stewards of the planet. Embracing on-demand boxes is not just a short-term solution but also a strategic move to build brand loyalty and stay relevant in an ever-evolving market.
As e-commerce continues to reshape the retail landscape, the packaging industry faces new challenges in meeting the demands of customization, efficiency, and sustainability. On-demand boxes offer a promising solution by automating the packaging process, reducing waste, and optimizing resource utilization. Through intelligent automation, businesses can achieve right-sized packaging, increase sustainability efforts, resolve labor-related issues, and enhance overall efficiency. As the e-commerce market continues to expand, the adoption of on-demand boxes will be crucial for companies to thrive in an evolving and competitive landscape. By embracing this technology, businesses can address e-commerce packaging challenges while providing a sustainable solution that benefits their operations, customers, and the environment.