Change Is on the Horizon

On Aug. 1, Amazon will launch an expanded version of its Frustration Free PackagingTM program, which calls for all items larger than 18 inches by 14 inches by eight inches or weighing 20 pounds or more to be certified as ready to ship. The new stricter requirements are spurring significant changes to retailers’ packaging.

“From a marketing point of view, you don’t introduce new products in August.” This famous quote advising against an August launch date for new products or initiatives is just another example of Amazon rewriting the rules for retail on its own clock.

That means products can be shipped in their original packaging and don’t require a shipping box or additional packaging materials, which is also referred to as ‘ship in own container’ or SIOC. Vendors that fail to comply with these requirements will be charged $1.99 per unit by Amazon.

Amazon classifies acceptable items as either Tier 1 or Tier 2 products. Items in both tiers don’t require an overbox or any preparation by Amazon workers to ship and feature minimal protective packaging to reduce waste. But items in Tier 1 are also easy to open and use only recyclable packaging materials. Items that require an overbox or prep work are classified as Tier 3 and will incur the Amazon surcharge.

Good for Amazon, Good for Customers
The eCommerce behemoth began the program a decade ago with the goal to reduce waste, lower shipping costs and satisfy customers with packaging that is easy to open and 100 percent recyclable. The program calls for right-sizing boxes, using mailers for small items and choosing more curbside-recyclable shipping materials.

Amazon hopes to eliminate “wrap rage,” which they note is the frustration customers feel when the goods they’ve waited for are difficult to unbox. Frustration Free Packaging also provides the intended benefit of streamlining the fulfillment process for Amazon’s distribution centers, allowing workers to process orders quicker.

The guidelines have eliminated more than 244,000 tons of packaging materials since 2008. In 2017 alone, the program saved the equivalent of 305 million shipping boxes, reducing packaging waste by 16 percent, according to Amazon. However, concerns linger that the minimal packaging provides inadequate protection, leading to higher damage rates and more products ending up in landfills. This legitimate worry is one reason why online retailers need to test out proposed packaging solutions and base their decisions on sound research and data.

“Whether retailers use Amazon or keep order fulfillment in house, there are many reasons to re-evaluate their packaging processes in light of the Frustration Free Packaging program.”

Reconsidering Packaging Solutions
Amazon’s more-stringent packaging requirements serve as a potentially costly call to action requiring substantive change. By working with Pregis’ experienced team of packaging engineers, retailers and CPG companies are identifying the optimal packaging solutions for their specific product offerings.

The team at Pregis’ IQ (Innovation Headquarters) can put any proposed solution through a rigorous package design and testing process to ensure parcels can withstand the bumps and bruises of parcel shipment – and still deliver the enjoyable unboxing experience that is essential to driving customer loyalty and increasing customer lifetime value.

Whether retailers use Amazon or keep order fulfillment in house, there are many reasons to re-evaluate packaging processes in light of the Frustration Free Packaging program. And some are already seeing the benefits of revisiting and upgrading their packaging solutions.

Out With the Old, in With the New
Procter & Gamble, for example, developed a new “eco-box” for its Tide® laundry detergent that uses 60 percent less plastic than traditional plastic jugs and requires no additional packaging. The company also created a new concentrated detergent formula that uses 30 percent less water and therefore reduces the size and weight of parcels.

Similarly, Hasbro has changed its eCommerce packaging substantially. In one example cited by Amazon, a toy used to be shipped in the same packaging it had at a brick-and-mortar retail store, and the packaging was difficult to open due to ties and clips. Additionally, the shipment required secondary packaging to fill empty space within the box and prevent product movement, and not all of the packaging was curbside recyclable.

To comply with Amazon’s new standards, Hasbro switched to channel-specific packaging featuring a 25 percent smaller box that eliminated the need for added void fill since it is a non-breakable item. The primary packaging that made the item difficult to open were eliminated, and only curbside-recyclable materials were used.

The main drawback: The toy now shows up in a simple brown box instead of the fun, colorful packaging design that catches the eye on retail store shelves, which can have a significant impact on the unboxing experience. After all, graphics and package design are a critical factor in distinguishing a toy from all the rest – a main reason why toy companies have invested millions on primary packaging and branding.

Still, Hasbro Senior Vice President Jeff Jackson said the company is pleased with its revamped packaging approach. In a video on Amazon’s website, Jackson said: “You feel great about [Frustration Free Packaging] at the end. You open it up, you have less waste, and it’s much easier to grab that stuff and put it in your recycling bin and go.”

The trick is to find the right balance between meeting new requirements and reducing damages and waste, while also wowing customers and leaving a lasting impression.
https://www.pregis.com/knowledge-hub/change-is-on-the-horizon—amazons-new-stricter-requirements-spur-significant-changes-to-retailers-packaging/

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