Preventing Returned Goods Was Worth $12m Annually to This Retailer

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Preventing Returned Goods Was Worth $12m Annually to This Retailer

Getting products in one piece to customers could be a financial windfall

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Learned how @Sealed_Air is helping reduce waste & drive profit for their clients http://bit.ly/2thrTGY #Sustainability
Wednesday, June 28, 2017 - 8:05am

CAMPAIGN: Sealed Air: Reimagining Customer Solutions

CONTENT: Article

After days of tracking your shipment, it’s finally arrived. Excited to show off your new television, you quickly unbox your online purchase and begin the setup process. But then you see it, a screen filled with snow and static. Unfortunately, shipping damage is a big problem.

And for the e-commerce retailers selling fragile items like TVs, it means significant losses to company bottom lines and reputations, either needing to reship a new TV to their customer, or worse, lose the sale.

“In the past, you went to the store, picked up your TV and placed it in your car,” says Sarah Tanguay, Packaging Engineer at Sealed Air. “But that rigid Styrofoam packaging is not enough to go through the small-package shipping environment.”

In Sealed Air’s Packaging Application Center located in suburban Saddle Brook, NJ, Tanguay and her colleagues collaborate with different retail and e-commerce customers on their shipping solutions. This Packaging Application Center has a variety of testing equipment, including a drop tester and a vibration table that simulate the shipping experience. There, Tanguay and her team are able to customize packaging solutions and properly test shipments, balancing cost, material use, sustainability and efficiency. 

So when a large discount department store discovered high shipping damage rates on their television e-commerce shipments — leading to 24,000 reported damages in one year — they turned to Sealed Air. The focus was not just to save the final product - those damaged flat screen televisions represent a huge drain on resources, including the rare metals, energy and labor required to produce them.

But this company didn’t want to add additional packaging, employee time and space to their supply chain costs — unless it was worth the investment. 

Tanguay and her team got to work mid-February to find a solution available before the holiday season, typically a time when shipping damages rise due to increased shipping volume. The pilot program required rigorous testing, installing new equipment in multiple distribution centers, new packaging orders, and training employees.

“We decided to focus on Instapak® foam packaging,” Tanguay says. “It comes in many densities so we can tune it to the weight and thickness needed for the TVs.”

Instapak foam packaging had other benefits for the retailer as well. It required less storage space due to its A and B polyurethane components. When mixed, those components expand on-demand into protective foam. The continuous foam tube (CFT) technology also provided the speed needed to keep up with the pick-and-pack operations.

“We played around with the size of the tubes and boxes and the strength of the box, trying to balance cost and performance,” Tanguay says. After running tests in the Packaging Application Center, the Sealed Air team also sent their solution to an International Safe Transit Association Certified Testing Laboratory to verify the results. A 2-inch CFT around the television passed the test without a problem – 1.5 inch foam, tested to save on money and corrugated cardboard, did not pass.

With the testing complete, the retailer put in place the Instapak CFT solution in 7 distribution centers. As a result, the company reduced damaged TVs from 24,000 to 3,600 the following year, an 85 percent decrease. That saved about $12 million and about 330,000 kg of waste from their supply chain each year.

“You’ll always see some damage rates, it’s unlikely to ever get to zero product waste,” Tanguay says. “But we sure came close on this assignment. That made their supply chain more resilient to disruption — whether caused by climate change or anything else.” 

At the same time, the solution decreased operating costs by about $500,000. Workers now spent less time implementing the new packaging than they did handling returned product. 

“The retailer realized the importance of satisfying their customers and maintaining their brand reputation,” Tanguay says. “They really focused on the big picture and were willing to spend to save.”

Learn more about how investing in sustainability can increase the bottom line. 

Keywords: Responsible Production & Consumption | Business Ethics | Corporate Social Responsibility | Environment | Impact Investing | Industry, Innovation and Infrastructure | Responsible Business & Employee Engagement | Responsible Consumption and Production | Responsible Production & Consumption | Sealed Air | Sustainability

CAMPAIGN: Sealed Air: Reimagining Customer Solutions

CONTENT: Article