DESIGNING FOR AN ECOMMERCE ECONOMY

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It is Essential We Reimagine the Packaging Experience

WE NOW LIVE IN A DIGITAL CULTURE.

It has fundamentally shifted the shopping and packaging experience from the corner store (1900's) to the store and the door (1990).  Key examples include companies that have embraced the change; Warby Parker (once Lenscrafters), Third Love (once Victoria Secret), Everlane (once Gap), and Casper (once Serta).

Companies are using digital to create a brand, and a brand experience, rather than push products. For example, Casper, which doesn’t promote itself as merely a mattress company, but rather a digital-first brand focused around the concept of sleep. Jonathan Ringan noted, in a Fast Company piece that,

"Casper sees itself less as a simple mattress company and more as a lifestyle-driven enterprise that looks at sleep as a unique, optimizable category comparable to exercise or cooking or travel."

With clickable convenience, online shopping continues to gain momentum. According to a 2016 Pew Research Center study, by desktop or mobile, 79 percent of Americans have made purchases online – compared with 22 percent in 2000. In addition, 15 percent of adult shoppers are making an online purchase once per week and 28 percent are making multiple monthly online purchases. In 2017, 5 billion items worldwide shipped with Amazon Prime (63 percent of Amazon customers).

The digital age has changed the supply chain, yet retail and ecommerce companies still utilize systems designed for the corner store, from beginning to end. This has led to a post-purchase gap, unsustainable costs to people and the planet, and a shift in global relations and process.

 

POST PURCHASE GAP

First, it is important to look at the experiential economy or specifically in this case, the post-purchase gap and how it relates to future generations. Millennials are starting to crave a new experience both in store and at the door. Gen Z, at 60 million strong in the United States, will demand it. “Compared to any generation that has come before, they are less trusting of brands. Authenticity and transparency are two ideals that they value highly,” says Emerson Spartz, CEO of the digital media company Dose.

Today, when a customer makes a purchase online, there’s an “experience gap” from the time the customer checks out to when the product arrives. This is the new experiential moment for digital shoppers. According to Amit Sharma at HBR,

“Providing a positive experience at this time of anticipation is a tremendous opportunity for retailers to deepen their relationships with customers and build loyalty for their brands. Surprisingly, only 16% of companies are focused on customer retention, even though it costs at least five times more to acquire a new customer than to keep an existing one.”

More than ever, customers want a customized shopping experience from beginning to end, right up to and beyond how and when they receive their products, but at what cost.

 

UNSUSTAINABLE COSTS

Ecommerce customers, today, receive their products in a cardboard box, most likely in an OCC (old corrugated cardboard). The continued growth of online shopping and retail closings (70 million Sq Ft to close in 2018) have created a massive transition in the OCC (old corrugated containers) recovery market.

“There is a shift taking place and it’s more from the consumers. It’s a question of where that packaging material is going to end up and is it going to be as easy for us to capture,?” said Ben Harvey of Massachusetts hauler.

The United States designed its current recycling program over 50 years ago to take on cardboard consumption from retailers. While effective in its day, recycling centers and the planet can’t keep up with the consumer behavior changes. In a recent article by Fast Company, they point out that, the world is changing more in 10 years now than it used to change in 100 years.

To keep up with the rapid change, innovative recycling companies are revamping their current systems. For example, Recology, a San Francisco serviced recycling center, is investing over $11 million dollars to add new processing equipment and standing behind citywide taxes (15%) to account for the massive shift in receiving recycling from consumers verse retailers. While Recology is revamping to create temporary solutions, we must consider if the rest of the country can keep up with the rising cost and the impact to the environment we live in.

Today, humans are currently consuming nature 1.7 times faster than ecosystems can regenerate. The average American consumes its weight in trash each month and 165 billion packages and envelopes are shipped each year. 65 billion parcel packages are shipped worldwide. 178 million parcel packages are shipped daily. This is a daily consumption of 1.2 million trees, 242 million gallons of water, and 5 billion gallons of oil. 

 

SHIFT IN GLOBAL RELATIONS

To top it off, a recent shift in global policy will continue to impact the current supply chain systems in place. For example, the U.S. exports about one-third of its recycling, and nearly half goes to China. For decades, China has used recyclables from around the world to supply its manufacturing boom. But last year, it declared that this "foreign waste" includes too many other non recyclable materials that are "dirty," even "hazardous." In a filing with the World Trade Organization the country listed 24 kinds of solid wastes it would ban "to protect China's environmental interests and people's health."

With ecommerce on the rise, the question becomes, do we revamp outdated systems or design a new one to solve for the growing costs to people and the planet? At LimeLoop we are designing a new one, for the digital culture. Specifically, we are reimagining the packaging experience. First, by replacing recycled packaging with reusable packaging. Second, we a placing a sensor in the package to complete the brand experience loop. Just think one day, all packages that arrive at our door can be sent back and reused, over and over again. Furthermore you will be able to know where that package is at all times. In return, this intention is that this will create a high integrity and environmentally sound world for many generations to come.

Ashley EtlingComment