A new wave of reusable packaging companies could contribute to reducing or even reversing the waste from billions of online purchases made each year.
In the recycling business, this issue is called the ‘Amazon Effect’. In San Francisco, as the local recycling business struggled with growing piles of materials from online orders (from Amazon to meal kit companies), the city was forced to raise garbage rates.
The online store Toad & Co added a button saying ‘reuse’ on the checkout screen when you want to order. If you choose it, the order will arrive in a reusable package. After taking out your clothes, you can flip the label around and put the bag back into the mailbox instead of the trash, so the company can use it again for other customers until the packaging starts to get damaged.
This new packaging system was created by a start-up called LimeLoop and Toad & Co is the first company to pilot this process. The reusable packages are lightweight, waterproof and made from durable vinyl recycled from billboards. The start-up estimates that each pouch can be reused as many as 2,000 times, with cleaning and repairs along the way – replacing as many boxes or plastic bags, which would be a huge saving.
They estimated the number of packages shipped each year in the U.S. is around 165 billion. They also roughly calculated that the cardboard used would equate to more than 1 billion trees (this calculation didn’t account for the fact that some packaging is not made from paper or cardboard, but it gives a sense of scale). So, we can imagine how bad the impact could be with the exponential growth of online shopping.
“We have not seen as much interest in reusable packaging from industry as might be expected,” Kelly Cramer, senior manager at GreenBlue, an environmental non-profit organization, said. “Speaking with some retailers and brands about reusable packaging from an e-commerce perspective, they indicated that doing so would require that fulfilment infrastructure to be reconfigured, but to what extent is unclear. For example, traditional brick-and-mortar retailers who ship online orders from their stores do not currently have space to store reusable packaging.”
Obviously, the whole process would have to be rethought and changed. “Right now, speed and efficiency are the primary drivers of e-commerce – companies are just trying to keep up,” she says.“Packaging solutions that arguably compromise either of these drivers may limit adoption, although other drivers like consumer perception and sustainability could make brands more open to it in the future.”
If consumers don’t actually send the packaging back, the economics might not work out and this represents a big concern in the business. If the whole system isn’t carefully designed – if picking up packaging requires extra trips to someone’s house, for example, using extra fuel – there could be new environmental impacts and no point for the reusable packaging to be used for shipment.
In Europe, a company called Repack might have found a solution. They are using a similar model as LimeLoop. The packaging, designed to flatten easily, can be dropped back in the mail, and Repack pays the return cost. In the same time, customers typically get a discount on their next purchase, increasing sales for retailers as it gives customers an incentive to remember to return the package. Others online stores are exploring incentives like planting a tree for each returned package.
LimeLoop will work first with apparel companies but plans to scale up to tackle the larger challenge of packaging from online shopping in general. Repack has around 40 customers now and says that demand quickly grew over the last year.
Packaging has become a strategic question nowadays, and many e-commerce companies see that packaging waste is impacting customer’s behaviour. Let’s hope that more and more companies will join the cause and will do their best to find a simple solution to an ever-growing problem.