(Ron Sasine) Rebuttal: Banish Billions of Boxes? Not so Fast….

By Ron Sasine, Hudson Windsor LLC

ZDNet recently published one observer’s view about the possibility of e-commerce leaders bringing an end to corrugated boxes. Let me tell you why that’s not going to happen.

In David Gerwitz’s vision, Amazon and other e-commerce retailers are on the verge of implementing delivery systems that replace highly efficient corrugated containers with inefficient two-way shipments of totes and on-porch receptacles. While interesting, the fundamental flaw in that line of thinking is that it runs directly opposite of the strategy that will drive the future of e-commerce.

In its early days, e-commerce was all about delivering single items to individual consumers: books, DVD’s, video games. This model, and the consumers that drove it, created an ecosystem of impulse purchases and fast delivery, which became the foundation for today’s e-commerce.

But the future of e-commerce won’t look like the past. In Mr. Gerwitz’s piece, he describes the potential fulfillment pathway for a replacement remote control. It’s a nice example, and it relies heavily on the individual experiences of consumers who buy traditional e-commerce items like electronics and gaming supplies.  

The future, however, will be driven by growth in groceries, that heterogeneous group of food and non-food items that consumers use to stock their pantries, clean their homes, take care of their pets and care for their kids. The retail shopping baskets that hold these items today are rapidly being converted into tomorrow’s e-commerce shopping carts. Their diversity in shape, materials, stability and handling requirements will require equal diversity in shipping formats for these products. Corrugated boxes are uniquely capable of meeting these requirements. The future won’t be about shipping individual units or individual items; rather, it will be about shipping groups of items, baskets of products and entire shopping lists. If we’ve learned anything about consumer behavior in the last two weeks, it’s been that Amazon Prime Pantry and the forthcoming Walmart+ are all about moving more products per order, not fewer.

Mr. Gerwitz also misunderstands the recycling systems that support the corrugated packaging business. Paper packaging is the most widely recycled packaging material worldwide, and in the United States, recycling of corrugated packaging hit 88.4% in 2017 (Environmental Protection Agency, 2019). Even with current global dislocations, domestic consumption of recycled corrugated materials remains high, and new investments in recycling infrastructure have been announced nationwide. Furthermore, recycling of corrugated boxes drives the recycling of every other material in the U.S. recovery stream. Without corrugated boxes in the mix, curbside recycling of other materials would grind to a halt.

Finally, one needs only look at Amazon’s own guidelines to understand that corrugated packaging will continue to be an important part of the e-commerce landscape. Amazon provides its vendors with specific guidelines for achieving Tier 1, Tier 2 and Tier 3 ratings for their packaging, previously referred to as Ship In Own Container (SIOC) or Frustration-Free Packaging (FFP). These guidelines provide a clear preference for corrugated packaging, and each of the 12 case studies highlighted on Amazon’s packaging website show corrugated packaging solutions for products that currently use other packaging materials.

Far from being the “moribund” industry described by Mr. Gerwitz, the corrugated packaging sector is poised to be a significant beneficiary of the continuing growth of e-commerce. So, go ahead and place that order for groceries. It will be on your doorstep in a day or two.

With 30 years’ experience in the packaging industry, Ron Sasine is a leading adviser to global manufacturers, brand owners and retailers. His consulting firm, Hudson Windsor LLC, is located in Bentonville, Arkansas.