Packaging for the post-Amazon world: Case Study Part I – PatternFox ProblemKit

I don’t feel like I’m exaggerating when I say that e-commerce has changed the way every one of us shops.  From browsing and vetting products before in-store purchases to buying and shipping direct to our homes, the way we buy goods has changed.  In 2017, fast-moving consumer goods (FMCG) online sales accounted for 7% of the nearly $1 trillion market.  Nearly $70 billion worth of goods was delivered directly to our doors.

Shipping this $70 billion worth of goods is causing a stir among packaging producers as the traditional shipping container designs, honed and perfected for decades for bulk delivery to retail stores, do not stand up as well when delivered individually to the doorstep.  Having worked in the pulp and paper industry for the past 15 years, I’ve heard the rumblings from concerned packaging producers a few years ago grow into an out-right cacophony.  How much bigger will e-commerce become and how will the packaging industry need to change to keep up?

At PatternFox we became intrigued with this problem because of the large impact it has on both our economy and patterns of resource use.  Since solving problems using biology as inspiration is what we love, we want to know:

What can nature teach us about designing transport packaging for a decentralized delivery system?

In this Part I of a four-part case study, we introduce our PatternFox ProblemKit to decompose the challenge and define what the ideal solution looks like in terms of function and performance. 

PatternFox ProblemKit Step 1: What’s the problem? 

This simple-seeming question rarely has an obvious answer, especially when looking across multiple stakeholders with a diversity of needs.  Even within the same organization, different individuals will conceptualize the “problem” differently. As with all of our client engagement, we began unpacking the issues around packaging by asking the experts, in this case industry leaders.   

We started with the issue of sustainability and how sustainable packaging design can potentially trade off with performance; for example, brand owners want to increase recycled content, which usually decreases strength, which in turn, puts the product at a higher risk for damage during shipment.  Or, shippers want to pay less per box and use lighter boxes to reduce CO₂ emissions, which likewise decreases box strength and puts the product at a higher risk for damage. 

Our first interviews confirmed a growing concern in e-commerce packaging design, but not in the ways we expected.  Yes, sustainability is a great feature that brand-owners can publicize, but not if it comes at a risk to the product. 

Lesson #1: Transport packaging MUST protect the product, period. Sustainability is a nice-to-have

During our interviews we discovered that the bigger influences e-commerce has on packaging relates to:

1. Difference in packaging for products that go on the shelf versus products that get shipped in in bulk, and what that means for product SKUs in distribution centers,
2. How changes in product packaging might interact with the transport packaging,
3. How the different distribution channels require different strength characteristics.

The first two issues present some interesting problems for biology.  What can we learn about biological networks that could inform organizing and communicating information about SKUs?  How does biology manage the “packing” of irregularly-shaped objects?  But these seem to be very product dependent; packaging for a razor might have very different requirements than laundry soap. 

We chose to focus on the third issue; transport packaging design to serve multiple distribution channels.  Why? Because no matter what the product inside, our e-orders are usually delivered in a brown corrugated shipping carton.  By choosing this higher level of intervention, we presume that the biological design principles we find will be applicable to a wider variety of products.

PatternFox ProblemKit Step 2: What’s the problem with the problem?

This is another seemingly simple question: what currently limits the utility of the solution and what needs to change to make the solution better?  Of course, if the answer were obvious industry experts would have found the solution, right? When working with clients, we collaborate to understand the fundamental problem deeply: why it’s important, what are the current/ traditional ways of addressing the problem, and why those ways are no longer acceptable or simply just not good enough.

Lesson #2: While this problem is huge, detailed studies on the modes and nodes of e-commerce box failures aren’t available

We found we took on something so new with our transport packaging problem, that there really hasn’t been any industry-wide studies on how, why and in which-ways boxes fail.  But here are some answers we do have:

1. E-commerce returns/refunds/replacements are 10,000 times higher than for retail returns
   1. Roughly 6% of e-commerce orders are returned/replaced/refunded due to damage during shipping[1]
   1. Retailer returns to manufacturer for damaged product (not consumer-to-retailer returns) have such a small incidence they are measured in parts-per-million (ppm)
2. Damaged products cost companies 17 time the original cost to ship (and costs the environment more, too, by the way)[2]
3. E-commerce can have up to 4 times as many transfer points (points in the distribution chain where the box is transferred from truck-to-warehouse, warehouse-to-truck, or truck-to-truck) as in retail distribution
   1. Trips across the United States can have up to 20 transfer points for e-commerce
   1. 5 transfer points would typically be a high number for retail distribution

The damage is happening, it seems, at these transfer points. 

Lesson #3: It’s all about the transfer points

The retail distribution channel generally stacks and palletizes the goods in uniformly packed containers; 20 containers of laundry soap in each box, 20 boxes per pallet.  The boxes are handled primarily as “unitized” entities, and rarely handled as individual boxes (See Figure 1)

Figure 1. Common brick and mortar store distribution channel

However, e-commerce involves single boxes more often than palletized boxes.  Every box has different contents inside and can be different shapes and sizes that do not uniformly stack; so, the forces are not so neatly distributed as they are in brick & mortar distribution.  There are several different ways e-commerce products are distributed but pick, pack & ship (PP&S) and send-in-own container (SIOC) are two common ways; these are demonstrated in Figure 2.

Figure 2. Examples of typical e-commerce distribution

So, what are some of these new forces acting on the box in the e-commerce distribution chain?  Forces that act on uniformly and palletized boxes, as described in Figure 3, include vertical compression along the box walls, vibrations during shipment and force perpendicular to the wall from either squeezing (external force along the wall) or objects pushing out from inside the box.

Figure 3. Forces acting on palletized boxes

With unpalletized loads, additional forces act on the box such as sheer stress across unsecured boxes, vertical force acting not along the wall, and increased risk of rupture from increased handling. These are shown in Figure 4.

Figure 4. New forces acting on boxes in e-commerce distribution

The root cause for increased e-commerce box failure is thought to be increased handling due to more frequent transfers.  But during what type of transfer is causing the most damage (i.e. truck-warehouse transfers, truck-to-truck)?  Does warehouse automation increase or decrease damaged box contents? Where is the box failing (i.e. along the edge, along the seam, through the wall)?  These questions have not yet been addressed by the industry on a comprehensive scale, but each would suggest a different solution.

What happens next?

Our next three blogs will walk through the rest of the PatternFox design process, first by completing our PatternFox ProblemKit with a functional decomposition and 4-box diagram to define what the ideal solution looks like in terms of function and performance, as well as in terms of environmental, material, manufacturing, and structural constraints.  In Case Study Part III we’ll highlight potential bio-functional patterns and measure their potential applicability against our original problem definition.  And in the final installation of the Case Study, Part IV, we’ll choose one strong biological match to walk through a potential design.  As you can see, we are only at the tip of the iceberg with this project and have a lot of work ahead of us. 

Are you in the packaging industry or otherwise interested in e-commerce packaging? Connect with us using one of the links below!

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[1] “E-Commerce Product Return Statistics and Trends.” E-Commerce Product Return Rate – Statistics and Trends [Infographic], Invesp, www.invespcro.com/blog/ecommerce-product-return-rate-statistics/. Accessed 1/13/2019

[2] To Profit, E-Tailers Need to Stop Damaged Product Returns. Sealed Air, sealedair.com/insights/profit-e-tailers-need-stop-damaged-product-returns. Accessed 1/13/2019