Optimizing your e-commerce packaging and transportation: A focus on Europe

E-commerce packaging is a significant cost overlooked by many companies as they struggle to meet consumer demands for fast and cheap delivery of their online purchases.

A practical and integrated approach is required to maximize opportunities and minimize the expense related to the various elements of packaging that can account for somewhere between 3 and 15% of the cost of goods sold.

Companies in sectors including fashion, consumer electronics, and healthcare can cut costs while maintaining or even improving brand awareness and sustainability metrics by revamping their approach to stakeholders and consumers.

The traditional approach to e-commerce packaging is either a focus on costs or a marketing-led effort that accentuates branding that includes improved sustainability.

AlixPartners’ experience has found advantages from clients melding the three pillars of marketing and brand awareness, cost, and sustainability. The most successful companies engage key stakeholders with value engineering to map the trade-offs between cost and functionality.

Applying this template to corrugated boxes and board, by far the largest component of e-commerce packaging, provides a guide for a wider range of brands, industries and products.

Marketing and brand awareness

It’s crucial to understand consumer preferences and recognize that not all marketing is created equal. Some brands incorrectly assume that consumers equate the value of the corrugated packaging with that of the finished product.

A recent survey by UK-based Mondi Group, one of Europe’s largest corrugate producers, provides insight into ever-shifting consumer preferences. 

Additionally, the survey identified the top packaging aspects that deter online purchases:

European consumers value functional, sustainable packaging that offers an enjoyable unboxing experience. Oversized packaging that is tough to recycle and stuffed with internal material are the big turn offs. That said, fewer than a third said unattractive packaging would deter them from future online purchases.

It is important for companies to understand where their brand is on the spectrum of consumer awareness. Newer brands tend to opt for packaging exteriors that are unique and eye-catching to drive attention. Established, high-value brands often elect for blander exteriors that help deter theft.

Cost

The main cost drivers are packaging components such as paper and adhesives, as well as handling. Each offers opportunities to tackle expenses while assessing the trade-offs with marketing and sustainability.

Packaging is a complex product that involves design, material development, and construction. Engaging packaging suppliers as strategic partners is a key step in expediting value engineering activities. Involve them in product development and benefit from their expertise by maintaining continuous review processes to update specifications. Packaging producers can provide valuable insights on cost-efficient design through workshops and design studios.

Warehouse operations costs are too often overlooked, especially those associated with assembling, filling, taping, and handling the box or poly bag. Every warehouse has a different level of automation and internal processes that impact the optimal packaging type. The warehouse environment influences whether it’s best to opt for a box or a bag, or to use adhesive seals rather than tape.

Sustainability

Europe requires a more mature approach to sustainability than most major markets as it’s not merely a component of brand awareness but also a regulatory requirement. The European Union has since 2023 required companies to include sustainability efforts in their annual reports that include packaging. 
 

A more strategic approach to packaging includes involvement from key stakeholders that encompass marketing, purchasing, operations, and the materials supplier. 

Consumers prioritize resealable packaging that protects goods and can be unwrapped with a smile. Regulators are watching.

If your supply chain department requires assistance in implementing optimization in e-commerce packaging, please contact AlixPartners to discuss potential opportunities.