As retailers navigate the new era of shipping and packaging, consider your packaging and what it means for your brand.
We live in an on-demand world where e-Commerce is firmly outpacing sales over traditional brick-and-mortar stores. In fact, nearly 87% of Americans purchased items online in the past year.1
Despite the increasing dominance of online shopping, many retailers still overlook one essential aspect of order fulfillment: Packaging.
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But that’s no longer an option. New regulations, sustainability requirements and heightened customer expectations are forcing e-Commerce retailers to rethink what box they use to ship, how much material is inside it and if the package’s “look and feel” is aligned with the brand inside the box.
Dimensional Weight Pricing
Have you ever received a big box with various floating items, protected by air cushions? We call that “free-boxing,” and it’s not a term of endearment. Wasted box space means fewer packages fit in delivery trucks, resulting in wasted fuel and the unnecessary use of additional protective materials.
That’s why in March, leading shippers including FedEx, UPS and DHL, implemented across-the-board dimensional (dim) weight pricing. Dim weight pricing adds volume as another factor in the price, to ensure that shippers and retailers are right-sizing their boxes. Dimensional weight pricing helps maximize box space and is also known as “cube optimization.” Since its implementation, dim weight pricing has impacted commercial and industrial businesses of all sizes, as well as retailers with a significant e-Commerce offering.
Dim weight pricing helps ensure that retailers are shipping right-sized boxes, but there’s a surprising lack of action or awareness of dim weight. For retailers, that comes with a price.
It’s estimated that dim weight pricing may cause companies to pay up to $550 million more per year in shipping costs if action isn’t taken. In fact, some business may not realize they’re paying higher prices, due to communication breakdowns and/or siloes between packaging and finance departments.
The Future Of Free Shipping?
Today, many e-Commerce retailers are reconsidering their shipping strategies, including whether to abandon free shipping options.
Some are finding that the benefits of offering free shipping are muted by the cost of dim weight pricing. However, it’s possible that e-Commerce customers who have grown accustomed to “free shipping” will turn away from certain brands if it’s no longer offered.
Consumers want to know more about the companies and brands they’re supporting. Retailers should approach dim weight as an opportunity to reassess sustainability practices, reduce their carbon footprint and extend the polish and pleasure of a brick-and-mortar retail experience to the home by delivering the perfect packaging — unblemished and unbroken.
Reverse Logistics And Using Packaging As A Branding Tool
As e-Commerce continues to grow, return shipments do, too. Though some products are returned because they don’t look right or fit correctly, others are returned because they arrive damaged or defective.
Retailers’ packaging solutions today need to remain intact over the course of one, two or three journeys. At each stage, it’s critical that protective material performs the way it’s designed to. This process — the return to the retailer — is referred to as “reverse logistics,” and requires collaboration between a retailer, its packaging partner and the customer.
Every year, $8 billion worth of products are returned because they arrived damaged — that’s a problem most retailers can’t afford, especially when there’s an option to prevent it entirely.2
Retailers also must factor in consumer perception when considering packaging options. A recent Sealed Air study, titled, Packaging for e-Commerce Success, found that packaging appearance impacts consumer perception of the brand.
Our research revealed that 66% of Americans believe that packaging shows how much a retailer cares. Nearly half think it reflects the value of the shipment. E-Commerce retailers therefore need to consider the best possible packaging protection to eliminate damage, as well as the appearance of the package upon arrival.
Retailers of all sizes should look at protective packaging as a vital part of their business — not just as a means of transporting their products.
While brand-based and customized packaging has traditionally been associated with high-end fashion and luxury goods industries, it’s is happening more in other markets from small scale retail to consumer electronics.
1, 2 Sealed Air study, titled, Packaging for e-Commerce Success
Vicki Case is the Executive Director of E-Commerce for Sealed Air’s Product Care Division. She has 10 years of experience delivering high-performing solutions to Sealed Air customers. Prior to Sealed Air she worked in consumer packaging goods for Nestle and gained experience in the pharmaceutical industry with the McKesson Corporation.