Right-Sizing Your Packaging: Why Do Small Things Come in Big Packages?
If you've ever received a product that is "swimming" in an oversized box, you've experienced this wasteful practice.
Right-sizing has become a buzzword in the packaging industry. The term refers to designing packaging that minimizes empty space while still protecting the package’s contents. Right-sizing benefits businesses by cutting costs and eliminating waste, and it benefits customers by improving their unboxing experience and their first impression of the product.
The demand for right-sized packaging is coming from a number of sources including the influence of ecommerce retailers like Amazon, Walmart and Alibaba, not to mention individual brands that ship directly to consumers. It’s what consumers, retailers and logistics companies are demanding.
Too much or too little packaging can have far-reaching, expensive draw-backs for organizations. Too much packaging makes products heavier to ship, more cumbersome to handle and needlessly wastes materials. Additionally, over-packaging frustrates consumers. On the other hand, too little packaging doesn’t offer enough protection, and products are often damaged in transit.
Who wants sustainable packaging?
Despite varying opinions on environmentalism in the U.S. and Europe, sustainable packaging is universally sought. In brief, everyone wants sustainable packaging. Right-sizing your packaging promotes sustainability by reducing (or eliminating) the need for plastics and foam, while using the minimum effective amount of materials, reducing waste.
- Shipping and logistics companies want brands to ship smaller packages, and right-sizing began with optimising packaging sizes for sea containers to mitigate logistics costs for products coming to North America from Asia. Smaller packages take up less room, which means logistics companies like Amazon, UPS and FedEx would get more out for delivery per driver per day. Efficiency and cost savings drive the demand for right-sized packaging in the shipping and logistics companies.
- Retailers (both brick-and-mortar and ecommerce) want a more pleasing customer unboxing experience, efficient packaging not only in response to consumer demand, but also because it reduces waste, takes up less room in inventories and helps to ensure safe delivery to end-users.
- Consumers want brands to ship in more efficient containers. The idea of “shipping air” has led consumers to demand guilt-free and frustration-free packaging from their online and brick-and-mortar retailers like Amazon and Walmart, respectively.
Walmart and Amazon lead the way in right-sizing boxes
Megachain retailer Walmart had a serious image problem in 2005. According to Harvard Business School, Walmart’s 2005 environmental impact included:
- A higher electric demand than the African country Namibia
- The second-largest fleet of freight trucks in the U.S. (driving around 1 billion miles annually)
- 530 million square feet of store space
After an environmental “epiphany,” Walmart responded by publishing its 21-page “Sustainable Packaging Playbook” intended for its suppliers. The playbook includes a section on design optimisation and right-sizing packages to fit yet protect the contents.
Similarly, Amazon launched its frustration-free packaging program in 2008 and 10 years later, in 2018, launched its Vendor Incentive Program, which includes guidelines for design, testing and certification. Their four points for package design are:
- Design to reduce waste and use no Amazon overboxes
- Use 100% recyclable materials
- Protect goods against damage with no need for Amazon preparation
- Make the packaging easy to open for Amazon’s customers
Why do companies ship small things in large packages?
Of particular challenge to brands and retailers in right-sizing boxes is that sometimes there’s a reason for shipping smaller items in oversized packages, especially in ecommerce.
As an article titled “E-commerce Packaging Waste Becoming a Bigger Issue” published on SearchERP points out, ecommerce packaging and shipping is very different from traditional retail. Items are handled an average of five times in a traditional retail setting and 20 or more times in the ecommerce journey. The high number of touchpoints involved in ecommerce necessitates strategic packaging.
For example, the ecommerce company that estimated the typical package was dropped 17 times during the entire shipping process. Although oversized boxes use more materials and produce more waste, the extra space inside the carton lets shippers pack items with protective padding and air to prevent items from being damaged during shipping.
Yet today’s consumers expect brands to be sustainable and environmentally friendly. Consumers have started talking about their cardboard — not carbon — footprints, and they demand frustration-free packaging because it’s easier to open and produces less “wrap rage,” as a Forbes article said. Consumers react unfavorably when brands “ship air.”
Solutions: How to right-size your shipping boxes
The biggest challenge in the packaging industry for right-sizing the amount of boxes needed for packaging is creating a set of rules that establishes what happens if someone does not have the quantities they need for production. Typically, organizations upsize to match the production level.
Amazon alone sells 12 million products, according to Retail Touchpoints, ranging in size from a single watch battery to prefabricated 200-square-feet tiny houses. Imagine strategically right-sizing the packaging for 12 million products, and you can see the challenge of packaging at scale.
One major low-cost clothing retailer addressed this challenge by implementing a process called “full-case picks,” which involves packing an assortment of boxes in a carton. The company might package in one carton four mediums, two larges and an assortment of sizes for one SKU (stock keeping unit), for example. They increased packing space use to 90%, optimized their freight, reduced box space and cut packaging waste.
Another company, a well-known toy manufacturer based in the U.S., had a very unusual distribution center that included four warehouses in China. When boxes were stacked in the warehouse, the boxes on the bottom collapsed, causing significant product damage. They adjusted the design of their packaging and saved millions of dollars, while providing benefits throughout their supply chain.
Outsource your packaging inventory management
Packaging is much more nuanced than most organizations realize, and BillerudKorsnäs Managed Packaging solutions have the potential to save organizations money at scale.
Companies that outsource packaging inventory management have found that outsourcing this function of the supply chain can reduce costs 10% to 30% and reduce waste and negative environmental impact by 15% to 30%. Additionally, they consolidate the packaging management of their supply chain to a single point of contact, which simplifies the process. Get in touch with BillerudKorsnäs today for help with right-sizing your packaging in your supply chain.