In recent decades, amid increasing consumer and governmental concerns about the impact of packaging waste, major global brands have stepped up commitments to sustainability in response to new regulations necessitating changes to product packaging designs.
Most recently, the EU introduced new rules to help tackle excess packaging waste, with a focus on encouraging businesses to explore reusable packaging options, limit over packaging and empty space, and provide clear labels to aid correct recycling.
However, there have been suggestions that some of these new packaging requirements may be more appropriate for products sold in retail stores while doing little to support the creation of sustainable packaging for products purchased online.
In this blog, we will highlight the complexities surrounding sustainable packaging design for e-commerce and provide some top tips to help brands navigate the new regulations and limit the environmental impact of their e-commerce packaging.
The e-commerce packaging landscape E-commerce plays a significant role in global retail, with sales reaching approximately 5.2 trillion USD in 2021 and projected to grow by 56% by 2026, reaching 8.1 trillion[i].
In 2021, e-commerce accounted for 159 billion shipments globally[ii]. Alongside the growth of e-commerce, there has been a corresponding increase in associated waste from shipments, often comprised of single-use packaging that end consumers may not recycle.
However, stakeholders from the European packaging industry, including business consultancy firm NOA and the European Federation of Corrugated Board Manufacturers (FEFCO), suggest that the contribution of e-commerce to packaging waste may be overstated due to its visibility to end consumers. E-commerce represents only 7% of the corrugated market in Europe[iii], with the majority of corrugated material being used for bulk shipments.
Specific amendments to the EU Packaging and Packaging Waste Directive (EU PPWD) target e-commerce, yet they inadequately consider the complexities of e-commerce supply chains. Introducing reuse targets for e-commerce (20% by 2030, increasing to 80% by 2040) may directly conflict with the requirements to reduce empty space and minimise excess packaging.
Learn about the distinctions between retail and e-commerce packaging here.
Reusable packaging in e-commerce
A reusable plastic crate may require 20-30 times more material than a single-use corrugated box and will only result in less waste if reused extensively beyond its ‘break-even’ point. Reusable packaging needs to be robust enough to endure repeated use over time and be integrated into a reusing system that encourages changes in consumer behaviour.
The complexities associated with facilitating packaging returns in e-commerce could pose additional challenges in gaining consumer acceptance.
Reuse models that necessitate consumers to ‘return to store’ might be simpler to implement when consumers visit physical stores as part of their regular routine. However, in e-commerce, where consumers appreciate the convenience of doorstep delivery, the need to post or physically return items reduces the likelihood of items being reused beyond the break-even point. The situation becomes more intricate when considering the carbon footprint of transporting reusable e-commerce packaging.
In 2022, FEFCO commissioned three scientific studies comparing recyclable and reusable packaging, including a hot-spot analysis of the e-commerce value chain. The findings suggested that, in many instances, recycled packaging could be more sustainable than reusable alternatives.
In response to the studies, Eleni Despotou, Director General of FEFCO, noted that “Expressing a clear preference for reusable versus recyclable packaging is a narrow-minded approach” and emphasized that, above all, “Legislative proposals must ensure that any packaging placed on the EU market is ‘fit for purpose,’ environmentally friendly, fulfils its functionality and prevents unnecessary waste, which is the ultimate objective of policymakers.”
In October 2023, the Confederation of Paper Industries (CPI) urged the European Parliament to maintain the exemption of cardboard packaging in the revised EU PPWD. The CPI argued that exemptions “acknowledge the sustainability” of cardboard packaging and that reinstating the exemption would steer the PPWD away from a ‘one-size-fits-all’ approach to packaging. In November 2023, the European Parliament voted to permit EU countries exemption from the 2030 reuse targets for materials with recycling rates exceeding 85%.
Creating More Sustainable Packaging for E-commerce: Expert Tips
So, how can brands create e-commerce packaging that is ‘fit for purpose’?
While the largest portion of carbon emissions in e-commerce arises from the packaging itself (45%), shipping and returns account for 13% and 25% respectively[vi]. E-commerce should focus on reducing the packaging’s impact while ensuring efficient shipping and returns.
Utilise widely recyclable materials: Paper and cardboard packaging are easily recyclable and already boast high recycling rates. In the EU, recycling rates for paper and cardboard packaging have consistently exceeded 80% since 2008, reaching 81.6% in 2020. By using recyclable materials and encouraging consumers to dispose of packaging correctly, brands can help boost these figures.
Consider the end consumer: Brands can determine whether reuse or recycling is the most suitable option by understanding how consumers are likely to interact with the packaging. While recyclable packaging is often preferable, there are situations where reusable packaging may be suitable, such as meal box deliveries and leasing models for clothing or children’s toys, where high return rates are integral to the service.
Reduce materials without compromising product protection: Redesigning packaging to eliminate empty space and reduce materials will minimise waste while enabling more efficient shipping and logistics. Explore ‘build to fit’ solutions tailored to custom-fit packaging to products and deliveries. Customising each package for a specific delivery would help cut transportation costs and packaging material while ensuring items are securely packaged to prevent damage.
Optimise delivery networks: Improving delivery schedules and promoting collections could decrease individual deliveries by encouraging consumers to collect products from a convenient location during their daily commute, for instance. According to UPS, over 90% of people in the US are within five miles of a UPS Access Point, where they can collect products instead of having them delivered at home.
Design packaging for returns: Smithers highlighted returns as a crucial aspect of sustainable e-commerce packaging’s future, stressing the importance of simplifying the returns process and streamlining logistics for e-retailers[vii]. Brands should consider designing packaging that facilitates returns, including incorporating QR codes to assist with returns and creating packaging that can be reused for returning items.
Embrace 2D codes: By incorporating variable data codes, including QR codes powered by GS1 – formerly known as the QR Code Powered by GS1 – into product packaging, brands can facilitate greater data sharing throughout e-commerce supply chains and identify opportunities for sustainable optimisation. These codes can also serve as a consumer touchpoint to reinforce sustainability commitments further. Many consumers are already adept at scanning 2D codes to access product information; QR codes powered by GS1 can adapt based on geo-location and the scanning device used, offering significant potential to help consumers identify the most sustainable methods for return, reuse, and recycling, while also providing brands with evidence of recycling and reuse rates.
Collaborate with sustainable suppliers: Ensure that only suppliers and partners who share a commitment to sustainability are considered.
Conclusion
With e-commerce projected to maintain its upward trajectory, it’s imperative that everyone plays a role in ensuring the industry’s sustainable growth. Achieving sustainable growth will necessitate brands collaborating with various stakeholders, including packaging manufacturers, coding and marking solutions providers, and global logistics partners. It’s also crucial for brands to stay updated on current and forthcoming packaging legislation.
As a leading provider of coding and marking solutions, Codico understands the intricacies of designing packaging for e-commerce that is both purposeful and environmentally conscious. We can offer valuable insights into how brands can enhance their packaging by incorporating variable data coding with 2D codes.
Contact us to learn more!
References
[i] Statista, 2020, https://www.statista.com/statistics/379046/worldwide-retail-e-commerce-sales/, accessed on 21st November 2023.
[ii] Pitney Bowes, 2021, https://news.pb.com/article_display.cfm?article_id=6065%20, accessed on 21st November 2023.
[iii] https://www.linkedin.com/posts/fefco—european-federation-of-corrugated-board-manufacturers_corrugated-deliveron-activity-6985546300549136384-Bj5u/?trk=public_profile_like_view, accessed on 21st November 2023.
[iv] CPI, 2023, https://paper.org.uk/CPI/CPI/Content/News/Press-Releases/2023/EU-Reuse-Targets-for-Transport-Packaging.aspx, accessed on 6th December 2023.
[v] Euractiv, 2023, https://www.euractiv.com/section/energy-environment/news/parliament-votes-to-water-down-eus-packaging-waste-law/, accessed on 6th December 2023.
[vi] Statista, 2020, https://www.statista.com/statistics/1254302/ecommerce-average-emissions-by-source/, accessed on 7th November 2023.
[vii] Smithers, 2023, https://www.smithers.com/en-gb/services/market-reports/packaging/future-of-sustainable-ecommerce-packaging-to-2028. accessed on 20th November 2023.
