Even before the busiest shopping season of the year kicked off, I had already encountered a couple of peak-season missteps from online retailers. After an order I placed on Halloween and expected to receive within five days went missing, the vendor was unable to give me an updated arrival date — right up until the parcel magically arrived on my doorstep three weeks later. Then, a coffee grinder that was shipped to my house in its original retail packaging was unfortunately not sturdy enough for transit and arrived battered and partially open.
Regardless of packaging hiccups like these, e-commerce shows no signs of slowing. Consumers across the globe increasingly prefer the ease and convenience of shopping from their couches instead of fighting crowds during the holidays and the latest sales numbers reflect just that. Sales from Singles Day 2018, the one-day online shopping fest from China-based Alibaba Group, topped out at $30.8 billion. Americans spent $6.2 billion online (a growth of 23.6 percent year over year) on Black Friday this year, followed by a banner Cyber Monday at $7.9 billion — the largest online shopping day of all time in the U.S.
But all that spending isn’t the full story. All those gifts now have to make it to their destinations, on time and unscathed — and it’s possible that bad shipping experiences could push some shoppers back into brick and mortar shops. Which leads to an overarching question for retailers: How well will these online orders weather the journey to consumers’ doorsteps?
Happy holidays, high expectations
Consumer expectations continue to rise, and don’t soften during the holidays. According to a new report by Pitney Bowes, 30 percent of U.S. consumers make online purchases at least once a week, up 11 percentage points from just a year ago. Every time we make an online purchase, we expect free two-day shipping (or better), and according to research conducted for Sealed Air, 56 percent of us abandon our virtual shopping carts if we don’t qualify for it. Another important aspect of the online shopping experience: being able to track our purchase’s journey as it makes its way to us.
The research also shows we want attractive packaging that’s easy to open and leaves us with minimal waste to recycle or toss in the garbage bin. We never want our order to arrive damaged (ever) — but if it does, we want to be able to reuse our packaging to send it back. Ultimately, more online shopping means more potential for disappointment when a package arrives late, broken or battered.
Bad experiences? Retailers have the most to lose
Retail’s peak season is fraught with fulfillment issues as the onslaught of e-commerce orders put a strain on most operations. Labor challenges lead to more inexperienced packers on warehouse floors, and if those inexperienced packers don’t pack correctly or efficiently, companies could see increased rates of damage or excess material costs. Perhaps most worrisome for online retailers is what Sealed Air’s research reveals about how consumers respond to a bad online shopping experience: After receiving a damaged item, 38 percent of online shoppers will consider purchasing from a competitor next time.
Solving e-commerce packaging challenges
One way to solve these e-commerce challenges? Focus on right-sizing packaging. Although one large corrugated box used to work well as packaging for an entire product line, shipping lightweight items in too-large boxes with excess void fill is no longer a cost-effective approach. New freight pricing methods based on dimensional weight encourage shippers to take up as little space on trucks as possible — so that big box, even if it’s lightweight, is still a problem.
Instead of focusing solely on actual weight, online retailers should make their packaging work harder to reduce damage. All those holiday sales won’t mean much if many of the products consumers carefully selected for their friends and family are broken by the time they arrive. (Hello returns, restocking, refurbishing, and reselling.)
Retailers should consider creating a premium unboxing experience for their customers. Our research shows this approach can deepen a customer’s emotional engagement with brands — we call this last chance to make a positive impression on a customer the last moment of truth. It can truly pay off for retailers such as Target, which has recently embraced the power of branded packaging.
Our research also shows that luxury goods consumers are 33 percent more likely to repeat a purchase after receiving a premium unboxing experience. And, the 39 percent of U.S. consumers who self-identify as “packaging involved” are 77 percent more likely to re-order if given a premium packaging experience — and they’ll spend twice as much.
So as online retailers stare down the gauntlet of peak season shipping (and the potential for returns), I have one question: Are your customers delighted by your packaging?