As brand owners navigate the way their products are being sold through e-commerce channels, they need to make sure they get the packaging right. They must keep up with ever-changing regulations. And they must keep up with the likes of Amazon and Walmart.
Fuseneo, a package design company, works with CPGs and other brand owners to design packaging to meet the criteria for those big names, and also how to transition their products from retail to e-commerce channels. Through Fuseneo founder and principal Brent Lindberg’s back-and-forth discussions with customers at Johnson & Johnson and L’Oreal, they decided it was time to form a group of brand owners in more formalized discussions. Thus was born the E-com Packaging Council (ECPC).
The aim is to get the brands together to present a united front in the e-commerce space, not only sharing insights and opportunities about packaging trends, but also helping to drive the conversation related to the standards for delivering goods to consumers. Right now, those packaging standards are being dictated in large part by the big retailers. The companies involved in this new effort have a vested interest in making that conversation flow two ways.
ECPC founders held an open meeting to talk about the group recently in Seattle, where many of their peers had gathered for this year’s E-Pack Summit US. There was considerable interest among the brand owners, with representatives from SC Johnson, PepsiCo, Vera Bradley, GSK, and more chiming in about how they see the issues shaping. The group is just getting started, but already has 30-40 member companies on board, including several heavy hitters in addition to those already mentioned—Mondelez, General Mills, Procter & Gamble, Wayfair, Kraft Heinz, and General Mills, just to name a few. The group is not looking only for participation from the big guys, but companies as small as $50 million in revenue, Lindberg emphasized during the meeting. When somebody in the group suggested including fulfillment companies like FedEx and UPS, Lindberg commented that they’ve already started conversations with the delivery companies.
The effort is starting in North America, but the founders have visions of a global organization, noted Melissa Dandy, associate director of R&D e-commerce and new business models for Johnson & Johnson. “Our counterparts in Brazil and Europe are ready for us to share how it’s going,” she added.
ECPC is in the process of putting together a steering committee—likely five or six people who will help build topics for discussion. At the open meeting in Seattle, brand owners there began kicking around possible topics, many of them centered around Amazon’s three tiers of packaging. Tier 1 is frustration-free packaging (FFP); tier 2 ships in own container (SIOC); and tier 3 is prep-free packaging (PFP). Suppliers that want to have their products shipped through Amazon must complete a certification test based on standards from the International Safe Transit Association (ISTA).
These standards form the basis of a few key areas that ECPC members are interested in tackling, including test methods, preparation standards, and chargebacks. Other possible topics of discussion included sustainability practices, ideas about how to handle SKUs, and supply chain strategies.
The ISTA team also wants to be involved with the group, according to Lindberg. “It’s up to us to say this is too intense. We need to look at the data and see how much is actually being damaged,” he said of the test methods that ISTA has set forth. “If you can show a change in the test method is just as fruitful, then the conversation is open. We need to show them that a category should be treated differently, like we did for TVs and monitors.” The key is to show the ISTA a better solution; not just tell them to fix it, he added.
Discussion with Amazon
It’s these sorts of constructive solutions that will drive the efforts with Amazon as well, looking to develop criteria for the whole packaging and delivery ecosystem within e-commerce. “The team at Amazon knows this is happening,” Lindberg said. “They will be involved and engaged,” though not necessarily at ECPC meetings.
“The purpose is to make the conversation more two-way, not just one-way,” Dandy said.
“We want to collaborate with them on how to get to the last mile,” added Chris Kay, assistant vice president of e-commerce packaging at L’Oreal.
Amazon isn’t the only retailer on the table for discussion. It’s important for the brands to understand what direction other retailers like Walmart and Target might be heading as well, and how their standards might jive (or not) with Amazon’s. “We know that Amazon has a guideline. But what happens when Walmart asks for something else?” Dandy asked. “How do we get ahead of that as an industry?”
Ultimately, Amazon is too important for most brands to ignore. Electronics companies might sell 30% of their goods through Amazon. For CPGs, that number is more often in the single digits, Lindberg said, but it still doesn’t mean it can be discounted. More and more these days, consumers use Amazon as a search engine while standing in a brick and mortar store, checking prices. “If you’re not there, then you’re missing out,” Dandy commented. Lindberg added, “Even for the brands that it’s not a significant amount of business, they have come to realize how much they need to invest and grow that space.”
The goal by the end of the year for the group is to create a chat space online for open dialog, and to set a date for the first official meeting. The plan is to get the group together in person at least twice a year, in a meeting preferably hosted by one of the brand teams. “We are weighing options, as a number of events have asked us to co-locate our meeting,” Lindberg noted.
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