Sustainability is a pressing issue very much at the forefront for an increasing number of global organizations. What once felt like a buzzword is now a strategic initiative as more companies look for methods to eliminate non-recyclable materials, introduce products and packaging that are biodegradable, and optimize transportation to minimize CO2 output.
But what other methods should both brick-and-mortar and e-commerce retailers be exploring to reduce their environmental footprint? If you are a retailer, then a good place to start is by evaluating the relationship between packaging and the damages occurring within your delivery channels.
Products returned due to fulfillment damage pose several challenges and opportunities. For starters, you need to closely evaluate the impact returned items have on the environment (e.g., increased packaging waste, additional transit emissions, etc.) and strategically align your resolution efforts. Minimizing the volume of shipments routing back into your supply chain — for replacement sake — can be addressed in numerous ways. There are two areas that seem obvious, yet the strategies described are not one-size fits all. A blend of both avenues may prove desirable for your strategy.
1. Improve your packaging performance
The quickest way to address returns you may be experiencing is to implement packaging performance improvements on the front-end of the sale to avoid shipping related damage altogether. This approach is your continuous strategy that leverages packaging materials and designs to address the many action items that packaging is called on to deliver in an e-commerce environment. The increase in delivery speed combined with the efficiency to meet demanding service requirements of your customers constantly challenges the packaging to elevate its role, a notion that continues to be a moving target.
If you’re a manufacturer, your products possessing healthy profit margins serve as key enablers for packaging improvements, making the decision to invest upstream much easier. The sole purpose of this effort is to minimize the risk of damage-related returns for both you and your retail partners, and there is a compelling sustainability story to tell behind properly engineered packaged products that are ready to ship-in-its-own container for parcel delivery and other modes of last-mile delivery.
2. Increase customer service and repair opportunities
For low margin products, the slightest adjustment to your packaging system can make the difference between a profit and loss. Toeing this line is the challenge that high volume manufacturers wrestle with regardless of delivery channel.
The long-term play to address returns lands in the field as a shared service. Lower profit margins make packaging investment much more difficult, leaving organizations to employ the option of increasing customer service levels in the field. The sole purpose of this effort would be to avoid the return/replace the item, creating a substantial reduction on the sustainability scene. This strategy can offer significant benefits to manufacturers, retailers, and consumers.
For low margin products, the slightest adjustment to your packaging system can make the difference between a profit and loss. Toeing this line is the challenge that high volume manufacturers wrestle with regardless of delivery channel. Inserting a service/repair operation in the field can help retailers keep internet pricing competitive, ensure the packaging’s environmental impact remains minimal, and allows the retailer to engage consumer interaction leading to additional sales revenue. When a packaged-product arrives at the consumer’s doorstep and the condition shows that it did not survive normal distribution or last-mile transit, most would consider this experience sub-par, if not unacceptable. However, savvy business leaders treat this as an opportunity to further advance your relationship, as either a manufacturer or a retailer, with the consumer. This level of investment could generate “win-win-win” opportunities across the network if properly executed.
Both of these options offer suggestions that help you solve for the relationship between packaging and damages; however, they do come with some level of investment into the value chain. Navigating the proper due diligence is highly recommended before you advance too far in either option described in the returns synopsis above. If your organization is seeking ways to reduce damage, improve packaging, and reduce wasted movements but is unsure of where to start, enlist the help of experienced certified packaging professionals to determine the best solution for your company.
Kyle Ous, Manager, is a Certified Packaging Professional within the Packaging Optimization practice at Chainalytics. He is a client on-boarding specialist who designs innovative packaging solution approaches that ensure results are aligned to our client’s business needs.
