How to Optimize Your Packaging to Save Money and Improve Your Customer Experience
October 11, 2024
Packaging is an integral component of any eCommerce business. When someone orders your product online, it’s the package that ensures it moves safely from your warehouse to the customer. That external shell also provides them with their first experience of your product and your brand.
Globally, the eCommerce packaging market is worth some $70.27 billion, with packaging accounting for 10%–30% of the cost of goods sold (COGS). Despite its importance, packaging is an afterthought for many eCommerce stores.
You have several avenues available to refine this back-end element with ease, such as using Amazon packaging options and shipping your goods in reused boxes or having only one or two box sizes for all your products. By optimizing your packaging, you can reduce total costs, improve your brand image, and streamline your shipping process.
How packaging impacts your business and customers
Packaging affects nearly every part of your shipping and distribution chain, with the most obvious being the shipment itself. Customers buy products online expecting them to show up intact and undamaged. However, Packaging Digest found that 11% of all packages are damaged in transit. Those products have to be returned and replaced, and customers become unhappy. Although some damage is due to carrier mistakes, poor or improperly sized packaging is also a culprit.
Globally, eCommerce produces over 3.4 million pounds of packaging waste, and that costs eCommerce sellers significantly in terms of shipping costs, public opinion, and, increasingly, regulations. Moreover, with posts shaming brands for using excessive packaging to ship items, neglecting your packing strategy can affect your public image as well. In fact, 82% of consumers said they were willing to pay more for sustainable packaging, including right-sized and recyclable boxes.
Cutting down on packaging size also benefits your store in other ways, such as lower material costs, which apply to both the original box and the dunnage to protect the product inside. While these expenses ultimately depend on how much you pay for warehousing, shipping, and storage, large packaging will increase every one of those elements.
Steps to Optimize Packaging
Optimizing packaging requires an investment in understanding your inventory and your packaging supplier to find workable solutions.
Choose your sizes wisely
Customers are increasingly concerned about waste and actively want to minimize it, so you can appeal to their environmental values by fitting your products with the minimal amount of packaging required for safe shipping.
Even for web shops with expansive catalogs, you can normally identify average size, weight, and needs for your items. That allows you to determine a general right size for your packaging based on these simple categories. If you state which size box a product needs, shippers can easily pick and pack the appropriate box, and that standardization will reduce procedural costs and effort. This practice applies to multi-item shipments as well. You should know how every product combination in your store fits into boxes and keep box size recommendations for them.
Dunnage and inserts are also impacted. You know what forms of transit and the potential risks your products face when you ship them, so it’s critical to balance protection with sustainability. That could look like a smaller box with less dunnage or an insert to hold the product in place inside the box. The advantage of an insert is you can customize its size and messaging so it’s relevant to each shipment size and product type.
Review your delivery pipeline
It’s difficult to tell upfront what packaging will do best in your delivery pipeline. So, it’s important to review aspects like:
- What form of transit will your package undergo?
- What types of weather does your package have to be resistant to?
- What kind of unboxing experience do you want to give your customers?
It’s also important to experiment with potential solutions. You need to answer questions like:
- Which box option is the fastest to pack? With inserts or with dunnage?
- Which box option better protects the product(s) during shipment? Is there a difference in the rate of return or number of products damaged during shipment What about different types of dunnage?
- Does scaling down box size reduce damage to products?
- What kinds of damage are most common among returned products? For example, if you know the most likely issue is water damage, adding a plastic seal can significantly help. Or, if bent corners are a problem, you probably want packaging inserts.
Reduce waste and returns
Although you need to use enough packaging to protect your shipments during transit, too much can be just as harmful as not enough, depending on the product. The below list displays the risk level for various types of packaging and dunnage:
- Plastic envelope packaging – High risk of damage
- Plastic envelope with bubble wrap – Average risk of damage
- Well-fitted box with loose-fill dunnage – Average risk of damage
- Well-fitted box with cardboard or foam box insert – Minimal risk of damage
- Larger box with cardboard or foam box insert – Almost no risk of damage but waste of materials
- Larger box with loose-fill dunnage – Average risk of damage and waste of materials
- Large box with loose-fill dunnage – High risk of damage and waste of materials
Ideally, aim for packaging that’s just large enough to fit the product and an appropriate amount of dunnage or an insert.
Most shippers use product volume to calculate box size (i.e., width x length x depth). The problem though (one that often results in products being shipped in far-too-large boxes) is that, if you have a few standard box sizes, a product that exceeds them in one dimension will automatically be upgraded to a larger box, resulting in greater waste to pack and protect it.
You can also run into issues if you have a 3PL shipper that automatically calculates box size based on these dimensions, especially when you introduce bundles or sell more products together. This makes it important to understand and create packaging recommendations based on known combinations from your shop.
Keep the unboxing experience in mind
Unboxing videos are a popular trend, so you want your products to arrive at your customers in good shape to make a good first experience of your brand. So, invest in good packaging to ensure a good customer experience after shipment. Then, you can put some thought into packaging, presentation, and how the product looks when you open it. During this stage, look to your buyers to determine what most appeals to them:
- What are customer reactions to unboxing different types of packaging?
- Which boxes do customers rate most favorably in terms of waste, sustainability, and ease of use?
- What kinds of packaging allow your product to ship without moving while also looking good when opened?
Test multiple options, ask questions, and incorporate the data gathered to optimize your packaging for delivery, protect the product, and improve the customer experience.
Wrapping up — Consider your packaging to boost your brand
Taking steps to optimize your packaging can yield fruitful results for your brand. The most immediate are reduced expenses, as right-sized packaging costs less to store, buy, and ship and takes up less space during delivery, so you can send more packages per shipment. It also means you spend less on dunnage and box inserts to protect your products. Best of all, it gives customers a good first impression of your offering and your brand.
Whether you take care of fulfillment in-house or work with a 3PL or a shipper that handles pick and pack for you, you should work out a strategy for boxing and how to optimize it. Experiment with different packaging options, and you’ll eventually develop packaging guidelines that streamline operations and ensure a consistent and positive fulfillment experience for both your company and your buyers.
