Monday, October 3, 2016

Amazon should think outside the box



Recent news that Amazon is working on a way to deliver items inside your door, without packaging, is huge. It means that e-commerce might overcome its greatest obstacle: Thinking inside the box.


Consumers are increasingly embracing the convenience of online retailers, the most popular of which is Amazon — 55 percent of online shoppers now start their product searches on the platform. Internet purchasing just makes sense — why drive to the hardware store to pick up a few specialized screws when getting them delivered right to your door is but clicks away?


Perhaps because the hardware store won’t drown the screws in cardboard? It won’t suffocate them with inflatable pillows made from plastic, which is even more harmful because it is less likely to be recycled, takes 10,000 years to biodegrade and is more likely to end up in our oceans.


E-commerce is presently 9 percent of total retail sales — and steadily eating the offline retail world. But its growth is limited by the perception of wastefulness around packaging. There are countless Reddit threads and memes highlighting the absurdity of oversized, overwrought packaging housing the tiniest, hardiest items, like a battery or a “farm egg.”


The squad of grinning boxes on our doorsteps start their lives as trees, which are cut down and turned into tree fiber. The fiber is then processed into cardboard in the U.S. and is both recyclable and biodegradable. If a user chooses to recycle a box, it gets taken to a processing center where it is sorted and baled. If not used domestically, the cardboard bale gets shipped to China, and the fibers are reused there. More than 85 percent of all products sold in the U.S. are packed in cardboard. Cardboard packaging is the largest component of human-created waste, which contributes significantly to global warming.


As any Amazon Prime stan will attest, the great wall of smirking boxes dwarfing your other trash after an online shopping spree is reason enough to pick up everything at your local CVS. When you take into account its carbon footprint, Prime isn’t always optimal.


amazon-packaging


Despite their innocuous smiles, the boxes are turning off customers. Investor Om Malik changed his Prime ordering habits after an epiphany last year.


“I won’t be ordering things willy-nilly, and when I do make a purchase I’ll take pains to group orders together,” he wrote. “And in the coming weeks I will be keeping a closer eye on the sizes of the boxes landing at my door, and also on how many boxes the company chooses to use to ship its items. Call it mindful shopping.” (Amazon now offers a “group orders together” option.)


And some users don’t have a choice. Restrictive building packaging policies like this are becoming more and more common. One Titan building manager in San Francisco had to set the weight limit on e-commerce deliveries to less than 50 pounds because staff members were getting hurt and the boxes were “a nuisance.” She said her 600-tenant building sees average deliveries of 100 packages a day; during holidays: 600.




Amazon should adopt more innovative ways of delivery collection and recycling — like returnable dunnage.

Amazon does have a sustainability division that focuses on reducing packaging based on customer feedback. It has fielded over 30 million comments so far: “We acknowledge that there is room for improvement,” a representative explained.


In addition to the rumored August lock partnership, the division is working on “frustration-free” packaging with less wire ties and plastic. She said that the initiative saved over 36,000 tons of waste from landfills in 2015. When asked for context around how many tons of cardboard are shipped annually, the representative said: “We don’t share that type of information.” Amazon fulfilled more than 1 billion orders in 2015.


Analysts predict that by 2050 there will be more plastic in our oceans than fish (plastic’s environmental cost exceeds its profits in the U.S.). There sure are some smart people in Silicon Valley and in Seattle — let’s think outside the box, and the bubble wrap.


As the world’s most valuable retailer, Amazon needs to be a leader in sustainability. It should develop eco-friendly materials and recycling in-house, or partner with a startup like Ecovative, TECNARO or BioCellection. While still in its infancy, there is a movement to use materials like resin, cornstalks, mycelium (mushroom fiber), sheetstock and even biological tissue to protect your waist trainers and Gillette razors, instead of plastic and cardboard.


Amazon should adopt more innovative ways of delivery collection and recycling — like returnable dunnage. Farmstead, a YC startup that delivers groceries to residents in the Bay Area, picks up the packaging from the previous week at the next delivery. Another startup, Rent the Runway, sends its “Unlimited” orders in cloth bags, which you then send back to reuse on your next order.



While it is difficult to calculate the carbon footprint for dunnage return at scale, Amazon could use its data to figure out proximal delivery centers in order to minimize the net damage (versus disposable packaging). It could even build Amazon Eco Prime, and charge users more for more sustainable options.


When asked if Amazon is considering any of these initiatives, its representative said no, “[but] we definitely have the scale to continue innovating — that’s played a role in the building of the [sustainability] team.”


“They have the data to do it,” Ecovative CEO Eben Bayer tells me, “but instead they use a silver bullet approach.” Eben revealed he had spoken to other e-commerce companies in the past about using Ecovative packaging products (even asking customers to pay a dollar more for it), but many have not been ready to bear the added cost. One notable exception is Dell, which uses Ecovative blocks instead of the plastic pillows. If Dell is innovating faster than you, it’s time to rethink your strategy.


Disclosure: I own a trivial number of public shares in Amazon.

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