While the pandemic brought great disruptions, it also brought great “shopportunities.” That’s the word that John Wilson, director of marketing and sustainability for Amcor, uses when talking about how companies can adopt the lessons from the past two years to advance their e-commerce sales.
The shopportunities are available to retailers, brand owners, and packaging converters, says Wilson, who was a featured speaker at the PACK EXPO Las Vegas and Healthcare Packaging EXPO, held Sept. 27–29 at the Las Vegas Convention Center.
“We can all agree 2020 was a wild year,” he says about the pandemic and how people were forced to stay home and changed their habits. “We saw a dramatic and sudden shift in shopping towards e-commerce.”
An examination of those trends shows how companies can capture the potential for future growth, he suggests.
Sales data proved that large and small retailers saw significant growth, with e-commerce activity increasing in both edible and non-edible categories. Data also shows that much needs to be done to improve the shopping experience for consumers, who won’t hesitate to complain through social media when packaging fails.
However, observers also learned that e-commerce shoppers showed a higher loyalty to brands than those who shop in brick-and-mortar stores, Wilson says. And people tended to stick with those brands and not seek out lower-cost alternatives as they might have in the past.
“To me, that increased brand loyalty and a reduction in price sensitivity combine to advantage brands as opposed to private labels,” he says. “While most trends in the past decade have gone in the other direction, this could be an encouraging sign for the big brands in this environment.”
Those changes introduced challenges in the supply chain, where a “one-size-fits-all” approach to packaging doesn’t always work in the online economy. The packaging must meet four key roles, which can be at odds at times, he explains. It must be cost effective, protect the product, address consumer expectations for sustainability, and represent the brand image and design.
Lessons in Distribution
Packaging changes can improve survivability of products through the distribution chain while optimizing packaging weights to improve the overall carbon footprint. But stakeholders also need to ensure that consumers have a positive experience. That starts with everyone understanding how the supply chain is different with e-commerce.
Traditionally, a package goes through multiple quality-control steps before a consumer finds it in a store. It starts with the manufacturer who sends products to a distribution center before it is sent to a store where it is unpackaged and inspected by someone who puts it on the store shelf. Ultimately, consumers are the final quality-control inspectors in that they will push aside a damaged package for an undamaged one before going to the checkout line, Wilson points out.
With e-commerce, manufacturers put products on pallets that are shipped to an e-commerce distribution center where the products will be unpacked and placed in inventory. After an order is received, it might be handled many more times before it is packaged—perhaps with other items—and shipped to other distribution centers before it arrives at customers’ doors. A lot can go wrong, and consumers don’t have the ability to reject a damaged package like they would in a store.
“Glass has incredibly high failure rates when shipped through e-commerce,” Wilson says as an example. But even plastic laundry detergent bottles have been shown to fail, along with the secondary plastic packaging intended to keep spills from spreading and leaking into the box.
“These spills not only affect the consumer experience, but they can have a dramatic economic and environmental impact.”
Wilson says that one large packaging shipper reported that it has 10,000 spills per day on average in its network. Each represents a bad experience and must be cleaned up, along with any collateral damage to products shipped alongside it, he points out.
Of the consumers who have reported problems with packaging, studies have shown that 43% said that the order had arrived damaged and 37% said the packaging wasn’t properly sealed, he says. And research shows that the consumer doesn’t associate the negative experience with the shipper or retailer but with the brand owner, and that should be an alert for all brand owners. “People expect better performance than they are getting today,” Wilson says.
The failures happen in a variety of ways—from glass breaking to trigger sprays compressing and ejecting liquid to paper composites puncturing and leaking to threaded caps opening and leaking or caps cracking. Brands will go to great lengths to mitigate risks, but that also means adding dunnage to keep packages padded and upright. However, consumers don’t like all the extra packaging.
Sustainability and Alternatives
Amcor is part of the Ellen MacArthur Foundation, where more than 450 companies have committed to eliminating problematic or unnecessary plastic packaging by 2025. It also calls for moving from single-use to a reuse model where relevant and for 100% of plastic packaging to be reusable, recyclable, or compostable by 2025.
He suggests that flexible packaging offers the best advantages in achieving those goals. When compared to alternatives such as glass or aluminum, the benefits of flexible packaging can be seen in lower fossil fuel usage, fewer greenhouse gas emissions, less water usage, lower product-to-package weight, and transportation benefits because more flexible packaging units can be shipped.
The best way to maximize the benefits is to design for sustainability, which begins with a life-cycle analysis. Amcor uses a tool called ASSET (Advanced Sustainability Stewardship Evaluation Tool). It helps to compare the carbon footprint and other environmental impacts with different packing options over the complete life cycle of a package, he says.
Baby food is one example where a mass conversion was made from glass to squeeze pouches. Numerous benefits were achieved, including higher profit margins for brand owners who could charge more per fluid ounce but who also experienced fewer leakage and breakage issues.
Amcor also has the ability to do digital simulations that allow brand owners to virtually test packaging options to monitor the behavior of products to see how they can be optimized for the supply chain. “We believe there is an opportunity to unlock growth and meet sustainability goals through primary packaging innovation,” Wilson says.
Thomas A. Barstow is senior editor of FlexPack VOICE.®