Inside the box: corrugated’s e-commerce transformation

Stack of corrugated shipping boxes on the doorstep

In 2020, the Fibre Box Association reported that 38 billion corrugated packages arrive on customers’ doorsteps every year.1 These brown boxes are seemingly simple, but the journey from manufacturer to mailbox has never been more complex. As consumer shopping shifts rapidly to e-commerce, manufacturers, distributors and retailers are rapidly re-thinking packaging.

While e-commerce purchases were already growing quickly before COVID-19, they skyrocketed as the virus spread and people spent more time at home out of concern for their health and safety. According to Adobe’s Digital Economy Index published in May 2020, “the recorded online spend is $52 billion more than what retailers typically see during April and May.”2 With such huge spikes in demand, e-commerce retailers and their big-box peers are feeling the pressure to adjust to customers’ changing behaviors. 

Packaging experts at Veritiv have seen this shift play out firsthand. Director of Category and Strategy Lloyd Kennedy observed, “There was more of a dramatic change from March to May 2020 than there has been in the last 10 years.”

And there’s no other packaging that’s playing a bigger role in this new world of retail than the corrugated box.

Corrugated: the multi-tasking workhorse of packaging

Once upon a time, corrugated packaging had a simpler existence. It moved from manufacturer to distributor to retailer, typically changing hands about half a dozen times. Now, a product in the e-commerce channel will encounter between 20-30 touchpoints before reaching the consumer, according to a report by PMMI, The Association for Packaging and Processing Technologies.3

This increase is driven directly by the shift to omnichannel selling, where companies are processing orders from big-box stores, e-commerce retailers, direct-to-consumer purchases, subscription services, third-party resellers and more. 

Consequently, thoughtful packaging design and sturdy construction are more crucial than ever. From protecting the product in transit, to creating a consistent brand experience, to minimizing DIM weights and maximizing sustainability, companies must seize every opportunity to optimize their packaging so they can protect their profits and brand equity. 

Re-thinking the supply chain for omnichannel packaging

Adjusting your corrugated packaging for omnichannel sales can drastically improve customers’ brand perception, loyalty and satisfaction. To do this well, Kennedy says brands must consider all aspects of their supply chain and customer experience, including:

  • Optimizing the manufacturing process and number of SKUs
  • Right-sizing packaging to fit the product and minimize DIM weights
  • Selling through new channels to reach new customers
  • Increasing package durability and safety throughout transit 
  • Creating a memorable, sharable unboxing experience
  • Streamlining reverse logistics, including returns 
  • Improving sustainability

Kennedy recommends choosing a packaging partner who understands these needs, who has a wide scope of resources and expertise, and who can evolve with you as your business scales and evolves. 

For example, an experienced packaging partner might recommend designing a product’s primary package to also function as the shipping container. This not only streamlines the fulfillment process, but also meets e-retailer requirements, such as Amazon’s Ships in Own Container (SIOC) mandate that strives to “delight” customers by reducing waste, decreasing costs and eliminating damage.4

Skilled partners can also assist with the entire packaging process. Kennedy explains that some customers come to Veritiv looking for help with branding and packaging style. Then, after a deep dive into business objectives and channels, Veritiv’s team creates structural designs and layer graphics on top. This approach results in innovative packaging solutions that drive efficiency in the supply chain while attracting consumers.

“We work with our customers to fully understand the channel requirements and preferences—how the customer can use the channel to maximize sales,” he describes. “Ultimately, once we understand your goals and objectives, we optimize how that package stacks on a pallet, loads on a truck and is handled on the way to the consumer. Taking a holistic view of how those pieces work together can unlock new sales advantages.”

Sustainable packaging for sustainable ROI

Kennedy points out that end-of-life is another vital consideration for any company that wants to stay competitive. Sustainability is no longer only a focus for eco-friendly companies—it’s an established consumer expectation and a growing priority for businesses of all kinds. Packaging plays a major role in sustainability and will only increase in importance in the future. 

According to a 2020 report by PMMI, “The global sustainable packaging market, as reported in total value of revenue, was estimated at $220 billion in 2018 and is predicted to reach $280 billion by 2025.”5 The Fibre Box Association notes that 96% of corrugated material is recovered and recycled to make new boxes and other paper products.6 Right-sizing packaging and minimizing material usage can help reduce a company’s environmental footprint and improve brand perception even more.

Kennedy says protecting the environment also bodes well financially. He points to a study by the NYU Stern Center for Sustainable Business, which found that 50% of consumer packaged goods market growth from 2013-2018 came from businesses that promote sustainability.7 Kennedy says, “Many companies today are setting goals for themselves that include a sustainability element, and they’re putting roadmaps in place to ensure they achieve success.”            

The future of corrugated

Corrugated will continue to be a mainstay in omnichannel selling. New technologies and opportunities abound for brands that want to continue using corrugated while staying competitive, delighting their customers and increasing safety and transparency.

Here are a few key trends to watch out for in the future:
 

  • Fit-to-product (FtP) and build-on-demand systems
    These two methods significantly reduce DIM weight shipping costs and help create the smallest possible package for a product in real time, eliminating most custom packaging and decreasing the amount of inventory needed.
     
  • AR and QR codes
    Currently popular in many international markets, these interactive packaging elements help consumers quickly learn more using their mobile devices.
     
  • Active packaging
    Active packaging, which is particularly popular for food products, preserves freshness and safety in a variety of ways, such as killing pathogens, extending shelf life and even self-heating food.
     
  • Traceability
    Traceability enables manufacturers (such as those in food and pharmaceuticals) to track and trace a product’s journey through the supply chain, which can help reduce contamination, food-borne illnesses and more.
     

The e-commerce revolution is here to stay. While there may be some growing pains as big-box and other retailers adapt, companies that learn how to be nimble, efficient and thoughtful about their packaging will set themselves up to outpace and outshine their competitors.   

 

1 Fibre Box Association. (2020, June). Why Corrugated? https://www.corrugated.org
2 Ambramovich, G. (2020, June 12). Online Shopping During COVID-19 Exceeds 2019 Holiday Season Levels. Adobe Blog. https://blog.adobe.com/en/2020/06/12/online-shopping-during-covid-19-exceeds-2019-holiday-season-levels.html#gs.ekh5gv
3 The Association for Packing and Processing Technologies (PMMI). (2018). 2018 E-Commerce: Think Inside the Box. https://www.pmmi.org/report/2018-e-commerce-think-inside-box
4 Mohan, A. M. (2019, April 23). Amazon's new sustainable packaging program puts the customer first. Packaging World. https://www.packworld.com/issues/e-commerce/article/13376482/amazons-new-sustainable-packaging-program-puts-the-customer-first
5 The Association for Packing and Processing Technologies (PMMI). (2020). Packaging Sustainability: A Changing Landscape. https://www.pmmi.org/report/packaging-sustainability-changing-landscape
6 Fibre Box Association. (2020). Corrugated is Recyclable. Corrugated Packaging. https://www.corrugated.org/recycling
7 NYU Stern Center for Sustainable Business. (2019, March 11). New York University Stern Center for Sustainable Business: Sustainable Share Index. https://www.stern.nyu.edu/sites/default/files/assets/documents/NYU Stern CSB Sustainable Share Index™ 2019.pdf