The Rules of Sustainability

For online retailers, creating an unmatched customer experience is not only a top priority — it is also a business imperative. They must make sure the items customers want to order are in stock, and that the orders are packaged correctly and shipped as soon as possible, and delivered to the appropriate address.

Focusing solely on these necessities tends to be a shortsighted way of viewing the process, however. Oftentimes, when online retailers see that an order has been delivered to the customer’s front door, the order is complete in their minds.

They may think the customer experience was a success because the correct order was packaged and delivered in the appropriate time frame. While this is important for the overall customer experience, unfortunately, successful completion of these simple tasks does not always mean a great customer experience.

What many online retailers often forget is how much the unboxing experience means to overall customer satisfaction — and there is an extraordinary volume of content that points to the importance of this step in the process.

There are 60 million unboxing videos on various social media channels, according to the 2018 E-Pack Summit, and they showcase the good, the bad and the ugly of online order packaging. Some videos feature the excitement of customers receiving their orders, while others take a more critical point of view, with customers speaking out against the online retailers for shipping orders in unnecessarily large parcels.

There are even videos mentioning the amount of added void fill used for the order and the use of nonrecyclable packaging. These negative videos and posts about a company’s lack of sustainability efforts and their negative impact on the environment can harm the online retailer’s brand .

Ultimately, they can sway potential customers to purchase their items from another retailer — likely one that promises a more sustainable and positive customer experience.

The Value of Sustainability

Much of this backlash is due to customers’ changing preferences. No longer is providing the best product on the market the only factor to consider when appealing to customers making a purchasing decision. Many customers want to purchase from a company that values sustainability and the environment.

Eighty-one percent of respondents felt strongly that companies should help improve the environment, in Nielsen’s recent global survey, “Sustainable Shoppers Buy the Change They Wish to See in the World.”

This growing passion for corporate responsibility crosses genders and generations. Although it may come as no surprise that millennials, Gen Z and Gen X are the most supportive of sustainable retailers and driving this shift in shipping priorities, older generations also are very passionate about sustainability efforts.

Recognizing how important sustainability and corporate responsibility are to customers and the environment is one thing. However, implementing them into the supply chain and the warehouse presents different challenges for online retailers. Like the old saying goes, “Don’t fix it if it isn’t broken.” Online retailers feel the same way, especially when they think sustainability efforts can result in cost increases and order fulfillment inefficiencies.

To some online retailers, sustainability means higher costs in order to get the products and shipping to be more environmentally friendly. Others feel becoming more sustainable will require new procedures, tools or organizational structures, which can be expensive and cause downtime in the warehouse or even delays in order fulfillment.

Online retailers feel that any sustainability effort may affect return on investment and impact the bottom line, which forces many to avoid implementing sustainability processes altogether. However, the online retailers that have the foresight to start incorporating environmentally friendly solutions and procedures have found that being sustainable actually can save money and boost business.

Steps to Take Toward Sustainability

One of the easiest — and maybe even the most obvious — steps to corporate sustainability for online retailers is to eliminate plastic use. This includes plastic packaging and any plastic void fill. By moving to only corrugated material for packaging and 100 percent recyclable void fill, online retailers already are moving toward a more sustainable fulfillment center, and customers likely will notice.

Another major move toward a sustainable fulfillment process is committing to creating fit-to-size parcels. With corrugated materials already in the warehouse, some retailers start to add many different types of parcel sizes in order to create these custom-fit parcels. However, this does not save money or efficiency, as this large range of parcel sizes can be expensive. Further, it does not decrease the time it takes to pack the order.

In order to speed up order fulfillment while still being sustainable, online retailers have turned to automated packaging solutions. These systems measure, construct, tape, weigh and label each order while creating a custom-fit package.

Some automated packaging solutions can create a parcel in as few as seven seconds, using only one operator, which allows for better efficiencies in the warehouse. These systems also can auto-box thousands of custom-sized single- or multi-item orders per day, requiring less labor and materials.

By using automated packaging solutions, online retailers can say goodbye to multiple packing stations and a wide range of box sizes for packers to choose from. By creating a fit-to-size parcel out of recyclable materials, void fill no longer is needed. These solutions have an exponential impact on online retailers, as the cost of shipping materials decreases while efficiency of the order fulfillment process increases. It’s a win-win.

Custom-fit parcels also enhance the customer experience, as they meet customer demands for sustainability. Many are thrilled to see the use of recyclable corrugated material that fits around an order instead of receiving large parcels with a lot of unnecessary void fill.

While this in itself will enhance the customer experience, and the online retailer will save money by reducing shipping materials, the fit-to-size parcel packaging also has been found to cause less damage to orders while in transit. This means even more satisfied customers, as there are fewer returns due to damaged goods.

Custom-fit parcels also save online retailers money by decreasing dimensional (DIM) weight. As many retailers are aware, DIM weight is found by calculating the cubic size of a package through multiplying its length, width and height. Once the dimensional weight is calculated, it then is compared to the actual weight of the package, and in some circumstances, the larger of the two is used to determine the package’s actual billable weight.

Since DIM weight was implemented by large carriers in 2015, it has greatly impacted shipping costs for many online retailers. Those that ship lightweight packages have seen these shipping costs grow even higher.

With DIM weight charges becoming more common in the marketplace, and large carriers only continuing to increase DIM weight rates annually, creating the smallest parcel necessary for every order is essential for the pursuit of ongoing cost savings. A fit-to-size parcel strategy not only will save online retailers thousands in shipping charges, but also will improve the unboxing experience for customers.

Sustainability Results

While all online retailers want to see cost decreases for both shipping materials and shipping charges, it is especially beneficial when satisfied customers are factored in to the equation. By creating the smallest parcel necessary, online retailers can boast about how they are lessening their carbon footprint.

The smaller parcels allow for more orders to fit into delivery trucks. This means that in addition to earning goodwill by using recyclable materials, and less of them, online retailers can impress their customers with how they are helping to eliminate greenhouse gases and are working to save the environment.

After implementing these steps toward sustainability, a UK-based online retailer specializing in lifestyle sporting goods apparel and products reaped the benefits. The company has embraced a mission to make business simple and sustainable, especially in its large 146,000 square foot distribution warehouse.

Its goals were to boost sustainability by minimizing its parcel packaging carbon footprint, decrease dimensional shipping volume of each parcel, and free up manual labor resources. After turning to an automated packaging solution in order to reach its goal of green efficiency, the online retailer has seen extreme results.

The company already was 91 percent plastic free, and it expects this number to be even higher with this new automated packaging solution.

The online retailer has eliminated void fill for 80 percent of its products and is using 100 percent recycled paper void fill exclusively.

The company has saved more than 39,000 cubic feet of corrugated material annually, which has helped eliminate 92 truckloads a year due to decreased DIM weight.

As head of sustainability at the online sporting goods retailer has said, “The first rule of sustainability is to reduce, and when you reduce, you save money as well.”

Online retailers that begin to implement sustainability efforts and automated packaging solutions in the warehouse soon will realize the ways environmentally friendly efforts can boost business, increase customer satisfaction, and save thousands.

Steve Brandt

Steve Brandt is the North American Director of Automated Packaging Solutions at ProShip, Inc., a Neopost Company, and a global provider of logistics software and product solutions, including enterprise-wide, multi-carrier shipping and manifesting software, automated packing solutions and intelligent parcel lockers. With over 20 years of industry experience, Steve is passionate about helping distribution centers relieve their daily challenges with automation.

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