Sustainable Bundling for E-commerce
At Pack Expo 2021, Gina Barrieau presented about sustainable bundling for e-commerce at an Innovation Stage. In the presentation, she takes a data-driven approach to identify trends and pain points in e-commerce packaging and explains how ultrasonic banding can address these pain points. If you would like to learn more about ultrasonic banding for e-commerce watch this video, visit our E-commerce page, and Contact us today for a quote or a free demo.
Good afternoon and welcome to Pack Expo 2021! My name is Gina Barrieau and I'm the Banding Sales Manager for E-commerce at Felins.
As e-commerce continues to boom across all industries, every layer of the supply chain is being reevaluated. Common factors driving operational and packaging innovations within e-commerce specifically related to direct-to-consumer packaging methods include improving the unboxing experience, maintaining brand consistency across all channels, identifying how to fulfill orders faster, and reducing freight costs all while providing sustainable packaging solutions that protect the product during transportation. During this session, we will explore how ultrasonic banding has become a unique and versatile solution within e-commerce fulfillment that can address these key factors and pain points.
Banding can reduce the amount of void fill required, unitize uniquely shape products prior to auto box systems, and eliminate corrugated damage associated with strapping while utilizing various types of banding material from paper and plastic to pre-printed and compostable. Before we dive in let's rewind to 2020 and take a closer look at how e-commerce was specifically impacted by the pandemic. U.S. retail e-commerce sales saw a 32.4% growth from 2019, almost reaching $800 billion in sales, which was about 15% of total retail sales. According to a survey from the Retail Industry Leaders Association and Mckinsey & Company, two-thirds of retail executives cite the growth of omni-channel and digital shopping as the most significant trend affecting the industry and its greatest challenge.
As you can see in this chart there were some e-commerce delivery methods that remained consistent in 2020 and others that saw an increase in demand, for example, click and collect sales such as BOPUS, or buy online pickup in-store, and curbside pickup grew about 107% in 2020 accounting for 9.1% of retail e-commerce sales and direct-to-consumer sales grew 43% and made up about 14% of retail e-commerce sales, according to eMarketer and Biz Rate Insights. But no matter how customers want to receive online orders, supply chains need to be agile and adjust their operations and packaging processes accordingly. With about 30% of all products ordered online being returned and retailers focusing on improving the customer return experience, the reverse logistics process of receiving, inspecting, and sorting of returned goods to determine if they could be resold, recycled, or needed to be scrapped is time-consuming and costly. According to Statista, the cost of returned e-commerce deliveries in the U.S. reached $205 billion in 2020 and is projected to increase to $242 billion in 2021 and $348 billion by 2023.
This slide shows a comparison of e-commerce U.S. parcel shipments in 2019 versus 2020. You can see in April shipments went from 11.9 million to 19 million packages and then started to level off in May, but we still saw significantly higher monthly volumes compared to 2019. Keeping those market trends in mind, let's talk about some of the common e-commerce fulfillment pain points companies are facing today. Labor continues to be a challenge with about 500,000 distribution center job shortages in 2020 due to e-commerce fulfillment demand, identifying how to reduce freight costs with the significant increase in e-commerce parcel shipments, how to digitize the supply chain, and how to reduce the returns and reverse logistics costs. The following are tied to shifts in customer demand and perception: the goal of an unboxing experience is to make even the act of receiving and unpacking the box fun. It should be more like opening a gift and less like unloading stock for a warehouse. Improving the unboxing experience increases the likelihood of repeat purchases and brand loyalty, but getting to that point of determining what the box should look like on the outside and inside, what type of filler and packing material is used, and what personalization and branding will be included can be challenging. With 96% of consumers equating fast delivery with same-day brands and retailers need to identify how to fulfill orders faster while reducing their freight costs. Since 57% of consumers say they're willing to change their shopping habits to help reduce negative environmental impact, there needs to be a balance between demand for green packaging and consumers' desire for custom branded packaging.
Existing fulfillment solutions include everything from AMRs, to pick-move pack collaborative robots, to fully automated fulfillment solutions. According to a Logistics IQ report, these are some of the warehouse automation leaders from 2020 within material handling, micro fulfillment, and piece picking robots. The need for right-size packaging is also growing as a way to reduce waste and processes when it comes to packaging. Oversized boxes require more void fill, increased DIM weight charges, and impact the customer experience, but right size packaging reduces packaging costs, allows more boxes to be shipped per truck, and is more sustainable. Whether it's a standalone box on-demand machine or a fully automated auto box system, they are able to customize each box automatically based on order size.
There are many ways to solve these challenges but today I'm going to talk about how ultrasonic banding is a unique solution to address these e-commerce fulfillment pain points. So what is ultrasonic banding? The banding machine applies tension to the band around the product based on digital settings and then utilizes cold weld technology to weld the banding material to itself. Ultrasonic technology is clean, efficient, and repeatable which gives more control. It's able to create a clean weld without glues, tapes, or stickers. Compared to other types of bundling, below are some of the benefits of ultrasonic banding. Versus strapping there's reduced damage to shipping boxes due to adjustable tension and paper material options. Versus shrink wrapping, banding uses less energy consumption, has faster cycle times, doesn't require a tool to remove the material, reduces wasted material, and reduces the overall footprint required. Versus heat seal technology and adhesive labeling, ultrasonic banding seals faster, has less wearable components, reduced operating cost, increased life cycle capacity, and doesn't leave sticky residue on products. There are also many unique features and custom options available. By utilizing ultrasonic banding, we are able to reduce void fill and waste. The bands themselves use less material than traditional packaging and wrapping methods while still holding the product securely and it doesn't require a tool or extra steps for a customer to recycle. Banding products to corrugate inserts prevents product from moving around within the box during shipment to demonstrate how this works we have a brief video:
You can see how even without void fill the product was able to stay in place and how we were able to use a smaller box. Banding can also efficiently bundle multi-item orders and help reduce the box sizes and void fill usage. Next we will look at some examples of how ultrasonic banding can optimize the process for multi-item orders. For apparel, automated banding systems can be used to keep multiple products together, eliminate trapped air to fit more per box, and to enable order identification and customization options. Unique-shaped products, such as water bottles, can be unitized to prevent them from rolling on the conveyor during the fulfillment process. For auto box systems, banding plays an important role.
As you can see in this video, operators in the work cell consolidate the order together and are then unitized with ultrasonic technology. The same banding machine can be used to bundle a variety of product shapes and sizes depending on each custom order. Items are then placed onto the conveyor and scanned in order for the auto box system to create the right size packaging for each order. If the multi-item order shifts before or after scanning, then it can cause a jam of the auto box system which could increase fulfillment lead times. Next the custom boxes are created, folded around the order, and sealed for shipment. Since there is no void fill included in this process, having a secure band that protects products from moving around the box is important in reducing shipping damages. Other benefits include the following: for heavy boxes banding can eliminate corrugated and product damage associated with strapping, allows the box to be reused for any returns, and can be removed by hand without a tool. For subscription boxes and kitting banding can improve the unboxing experience by branding directly onto the band. Shoe boxes can be stocked vertically and boxes are held together with the lid during the fulfillment process. Some of the key banding material features include compostable and recyclable material, adhesive-free, and the ability to scan a barcode through the transparent band as well as provide smart serialized packaging onto the band.
Thank you for taking the time to learn about some of the trends within the dynamic e-commerce market and how ultrasonic banding can help alleviate some of the main e-commerce fulfillment pain points. If you're interested in learning more about sustainable e-commerce packaging solutions, please reach out. My contact information is below. Thanks and enjoy the show!
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