Companies such as Procter & Gamble and Unilever are creating new packages for their products better suited for e-commerce delivery, according to CBS News.
Tide, a Procter & Gamble brand, has developed a cardboard box, double the Tide Eco-Box, for its detergent that weighs 4 pounds less than its 150-ounce plastic bottles and is capable of washing the same number of loads. The Eco-Box does not need to be packed in another box; an address label just needs to be affixed to the product itself.
Meanwhile, the Unilever Seventh Generation brand has created a smaller bottle for its detergent, which weighs 5 pounds less and 9 inches less than its 100-ounce bottle.
These new products and innovations are efforts to improve online performance as the share of e-commerce in retail sales increases. Electronic commerce is dramatically surpassing total retail growth in the United States, brands are therefore organizing their products for the e-commerce experience, which includes shipping products over long distances.
This is especially important for consumer packaged goods (CPG) brands, such as Tide and Seventh Generation, as total CPG sales grew up only 2.6% year-over-year (year-over-year) as of Aug. 25, compared to e-commerce GIC sales, which increased 29% year-over-year over the same period.
Additionally, spend per buyer in the GIC market grew 0.1% year-on-year and 16.6% online, so almost all of the industry’s growth is happening online.
The brands hope the new packaging will help them improve in two areas of delivery as e-commerce becomes more popular:
- Reduced shipping costs. Shipping any package can be expensive, and this is especially true for products like detergents which can be heavy. By making these products lighter, brands can reduce their own shipping costs or those charged by marketplaces like Amazon, potentially allowing them to pass these savings on to consumers by lowering prices. Reducing the size and weight of products is especially important for brands right now, as Amazon wants Stop sell unprofitable items that have low prices and high shipping costs. Instead, the e-merchant seeks to sell these items in bulk to make them more profitable, which would also make them less accessible to buyers. Brands looking to avoid this dilemma should invest in ways to reduce the weight of their products and improve other key shipping factors.
- Reduce the risk of damaged packages. Products not designed for delivery may be more susceptible to damage along the delivery route. This can lead to disappointed consumers who no longer order from the brand and additional costs to the business if they have to send in a replacement, making delivery even more expensive. Ensuring that products are strong enough to survive delivery should therefore be a priority for brands. To do this, brands can simulate the bumps of delivery trucks, warehouse processes, and other parts of the delivery experience, as Seventh Generation did.