Designing for an Ecommerce economy

We now live in a digital culture.

And it has fundamentally shifted the shopping and packaging experience from the corner store (1900’s) to the store and the door (1990’s).  Key examples include companies that have embraced the change – Warby Parker (once Lenscrafters), Third Love (once Victoria Secret, now For Love and Lemons ), Everlane (once Gap), and Casper (once Serta). Companies are using digital to create a brand, and a brand experience, rather than push products. For example, Casper, which doesn’t promote itself as merely a mattress company, but rather a digital-first brand focused around the concept of sleep. Jonathan Ringan noted, in Fast Company:

“Casper sees itself less as a simple mattress company and more as a lifestyle-driven enterprise that looks at sleep as a unique, optimizable category comparable to exercise or cooking or travel.”

With increased clickable convenience, online shopping continued to gain momentum. According to a 2016 Pew Research Center study, by desktop or mobile, 79 percent of Americans made purchases online – compared with 22 percent in 2000. In addition, 15 percent of adult shoppers made an online purchase once per week and 28 percent made multiple monthly online purchases. In 2017, 5 billion items worldwide shipped with Amazon Prime (63 percent of Amazon customers).

Further still, momentum propelled ecommerce forward as the pandemic kept people inside and shifted retail away from brick and mortar, seeing a 25% spike in March 2020 alone. The digital age transformed the supply chain over the years, but the future of ecommerce is here. Therefore, designing for an ecommerce economy, for a circular economy, requires retail and ecommerce retailers to think outside the current systems still designed for the corner store, from point of order to delivery. If not, we’ll see a widening post-purchase gap, rising unsustainable costs to people and the planet, and a continuing shift in global relations and processes.

Post Purchase Gap

First, it is important to look at the experiential economy or specifically in this case, the post-purchase gap and how it relates to future generations. Millennials crave a new experience both in store and at the door. Gen Z, at 60 million strong in the United States, demand it. “Compared to any generation that has come before, they are less trusting of brands. Authenticity and transparency are two ideals that they value highly,” says Emerson Spartz, CEO of the digital media company Dose.

Today, when a customer makes a purchase online, there’s an “experience gap” from the time the customer checks out to when the product arrives. This is the new experiential moment for digital shoppers. According to Amit Sharma at HBR,

“Providing a positive experience at this time of anticipation is a tremendous opportunity for retailers to deepen their relationships with customers and build loyalty for their brands. Surprisingly, only 16% of companies are focused on customer retention, even though it costs at least five times more to acquire a new customer than to keep an existing one.”

More than ever, customers want personalized shopping experiences from point of order to delivery and beyond. And with customer LTV becoming more and more important as the ecommerce momentum continues to push the boundaries of what’s possible, retailers find themselves paying higher and higher costs while the gap between consumer and retailer continues to widen. When is enough, enough?

UNSUSTAINABLE COSTS

Ecommerce customers, today, receive their products in a cardboard box, most likely in an OCC (old corrugated cardboard). The continued growth of online shopping and retail closings (70 million sq ft to close in 2018) have created a massive transition in the OCC (old corrugated containers) recovery market.

“There is a shift taking place and it’s more from the consumers. It’s a question of where that packaging material is going to end up and is it going to be as easy for us to capture,?” said Ben Harvey of Massachusetts hauler.

The United States designed its current recycling program over 50 years ago to take on cardboard consumption from retailers. While effective in its day, recycling centers and the planet can’t keep up with the ecommerce influx. And, the world is changing more in 10 years now than it used to change in 100 years, including rates and ways each generation consumes.

To keep up with the rapid change, innovative recycling companies are revamping their current systems. For example, Recology, a San Francisco serviced recycling center, is investing over $11 million dollars to add new processing equipment and supporting citywide taxes (15%) to account for the massive shift in receiving recycling from consumers versus retailers. While Recology is revamping to create temporary solutions, we must consider if the rest of the country can keep up with the rising cost and the impact to the environment we live in.

Today, humans are currently consuming nature 1.7 times faster than ecosystems can regenerate. The average American consumes its weight in trash each month and 165 billion packages and envelopes are shipped each year. Sixty-five billion parcel packages are shipped worldwide. 178 million parcel packages are shipped daily. This is a daily consumption of 1.2 million trees, 242 million gallons of water, and 5 million gallons of oil.

With the future of retail, we must consider the triple-bottom line – people, planet, and profit – as we build out more sustainable systems and collectively work to reduce and reuse what’s in circulation already, rather than just recycle.

SHIFT IN GLOBAL RELATIONS

To top it off, a recent shift in global policy will continue to impact the current supply chain systems in place. For example, the U.S. exports about one-third of its recycling, and nearly half goes to China. For decades, China has used recyclables from around the world to supply its manufacturing boom. But last year, it declared that this “foreign waste” includes too many other non recyclable materials that are “dirty,” even “hazardous.” In a filing with the World Trade Organization the country listed 24 kinds of solid wastes it would ban “to protect China’s environmental interests and people’s health.”

With e-commerce on the rise, the question becomes, do we revamp outdated systems or design a new one to solve for the growing costs to people and the planet? At LimeLoop we are designing a new one for the digital culture. Specifically, we are reimagining the packaging experience. First, by replacing recycled packaging with reusable packaging. Second, with sensored packaging to complete the brand experience loop. Packages that are received and sent back and reused, over and over again. With insights in where your package is and its state at all times, too boot. In return, is a high integrity system and experience for an environmentally sound world for many generations to come.

Tech and the fourth wave of environmentalism

Make Lasting Environmental Impact by Leveraging Technologies in New Ways.

The rate of technological advancements since the recent turn of the 21st century has been unlike anything we’ve seen before. According to Moore’s Law, technological abilities grow exponentially, with computer processing speeds doubling every 18 months. With so much growing potential, and its many forms becoming more and more ubiquitous in our lives, it’s no wonder that in looking for ways to tackle our current environmental challenges, we’ve been looking to innovative technologies to provide the solution.

In looking at our societies’ evolving approach to environmental challenges, major shifts have been marked by four distinct eras, or waves. We’ll examine our current, fourth wave and what it means for today’s business approaches.

The First 3 Waves

Marked by President Theodore Roosevelt’s land conservation initiatives, the first era took place in the 19th century. The second wave leveraged legislation to hold government and corporations responsible for their roles in contributing to wildlife pollution, seeing its height in the mid-20th century. Then in the late-20th century, we saw a shift in focus to market-based solutions to solve these problems. The common thread between these different approaches was that they leveraged what was available at the time to bring lasting changes.  It is no surprise then that our current wave is centered on the use of innovation, especially through technology, to apply those changes at scale.

The Fourth Wave

Not only does the fourth wave leverage available technology in new ways, it draws on a very important lesson that we’ve learned in our previous wave – business practices and sustainability practices are not only at odds with one another, but require one another to meet their individual goals.

“In any era, solving environmental problems means making use of the best available tools. In this era, those tools include innovations that can help drive transparency, responsibility, and least-cost action.” – Fred Krupp

The 7 Innovation Technologies

While infinite types of technologies will contribute to the fourth wave, the report focused on seven in particular:

Mobile Ubiquity

The last wave saw a shift from desktop programs to the cloud, as we continue to untether ourselves from conventional workstations, the fourth wave will continue to highlight the importance of developing solutions for mobile execution.

Automation Technologies

We’re seeing technology applied to more quickly and accurately perform repetitive tasks previously performed by humans. 

Data Analytics

We generate 2.5 quintillion bytes of data a day. Our ability to quickly analyze and create practices around what we learn will be a key feature of the fourth wave.

Blockchain

While often confused with bitcoin and cryptocurrency, blockchain as a technology is actually a really secure way of transferring and storing data. Making it a great tool for medical and financial data. Still convinced blockchain isn’t going to take off? Walmart just recently won a patent for a system that would house medical records on a blockchain for faster lookups.

Sharing Technology

Solving global problems will require adapting a global mindset. Open source practices and collaborative thinking will need to be part of the DNA of business practices.

Sensors

As sensors continue to become more affordable and use cases more adaptable, we’re seeing them leveraged in new ways to help detect, measure and visualize environments.

“When sensors, machine learning, IT, and data analytics are used to shape smart policy, rein in free riders, and reward corporate responsibility, the result will be positive change that helps people and nature prosper.” Fred Krupp

Innovations at Work

While we’ve just scratched the surface on the potential of some of these technologies, companies are already successfully implementing many of them. For example, orbiting 500 miles above the earth’s surface is the Sentinel-5 Precursor satellite. To help us better understand the sources of global warming causing greenhouse gases, it’s measuring hot spots of air pollution around the globe. Adding sensors to Google Street View cars enables them to map out occurrences of methane gas leaks in many major US cities.

Among retail companies, more focus is being put on using automation technologies to increase efficiencies and productivity. Everything from robots to stock shelves, to apps that allow shoppers to ring up their own groceries are being tested for eventual rollout. If in the Seattle area, you can already check out Amazon Go, their smart grocery store that employs computer vision, deep learning algorithms, and sensor fusions to allow shoppers to put the groceries they want into their bags, walk out the store without waiting in line and be charged via the app.

Levi Strauss & Co’s automation efforts are focused on the manufacturing side of the process. They’ve introduced Project F.L.X. (future-led execution), a “new model [that] replaces manual techniques and automates the jeans finishing process, allowing the company to reduce the number of chemical formulations used in finishing from thousands to a few dozen”.  Through the program, they’re able to not only cut down on thousands of chemical formulations but also reduce textile waste.

Executives and the Fourth Wave

A recent report by the Environmental Defense Fund took a deeper look at these seven innovative technologies, and how companies leverage them. They surveyed 500 top-level executives (VP, SVP, and C-suite) of retail, manufacturing, energy, technology and finance industries making over $500 million in revenue.  The goal was to examine the intersection of business strategy, technological innovation and corporate responsibility.

Some key takeaways:

• Over 70% of business leaders see greater alignment between business and environmental goals.
• Executives see sensors and data analytics as the most promising innovations.
• Almost half of executives cite government regulations as drivers to implement Fourth Wave technologies, while more than 40% cite pressure from customers and positive business results.
• The retail industry scored the highest for constantly trying to find new ways to reduce its environmental impact, 78% of retail executives say their business and environmental goals are more aligned than five years ago, 65% of respondents attributing that to an increase in Fourth Wave technological advancements.

A company’s adoption of environmental practices does not just help to maximize efficiencies, it’s an increasingly growing demand from customers and employees alike. Consumers are holding companies accountable for their impact, of the leaders surveyed, 80% felt that this would continue to increase. 84% of these same leaders said that having sustainability-based business practices helped them attract and retain talent.  This is a trend that’s sure to continue to increase as numerous studies show that purpose driven career choices are becoming the norm among younger generations.

What’s Next

Leveraging technological solutions to today’s environmental issues is not only a moral obligation but also a financial one to a growing number of companies. Long gone are the days when large corporations could argue that corporate responsibility is at odds with revenue goals and shareholder obligations. As EDF President Fred Krupp explains, “The Fourth Wave is not pro-tech for technology’s sake. It’s pro-tech because we see incredible opportunity for people around the world to use technology to scale environmental solutions as never before”.

The need for a circular solution

With the rise of consumerism, and the continued expectation of convenience and fast delivery, online shopping undoubtedly embedded itself in our culture. In a letter to shareholders, Amazon CEO, Jeff Bezos revealed they have more than 100 million Prime subscribers. The digital economy has officially arrived. Inevitably, every new age brings with it a new set of challenges.

E-commerce’s rise simultaneously resulted in a momentous rise in packaging waste. At LimeLoop, instead of focusing on the existing packaging solutions – traditionally cardboard boxes and plastic poly mailers – we chose to re-imagine an entirely new shipping landscape and introduce a circular solution: smart reusable packaging.

Why, you ask, do we need to consider alternative shipping materials? After all, cardboard boxes and paper mailers are recyclable. As it turns out, recycling is a complex matter. What consumers understand as recyclable has led to a significant amount of non-recyclables making their way into single-stream containers. From plastic bags, organic matter to metal… you name it. Today, the average contamination rate sits at approximately 25%, which translates into 1 in every 4 non-recyclable item being placed in a recycling container.

For example, when foods or liquids contaminate good cardboard and paper, their value is lost and, are then, un-recyclable. Papers can only be recycled 5 to 7 times before the cellulose fibers become too short, as stated by the U.S. Environmental Protection Agency (EPA).  And with rising recycling costs  and as much as we like to think our packaging materials are being recycled, that is not entirely accurate.

The Circular Solution

Rather than emulating the current packaging and shipping ecosystem, we decided to shift our thinking towards envisioning a different kind of shipping landscape. We asked ourselves, what if we shipped items using something that is not a cardboard box? What would that look like? How would it move an item from point A to B? Beyond product, what else could this shipper hold? How would it interact with the user and the environment? And the list goes on.

In this stage of the brainstorming process, we don’t edit ourselves. No question is stupid, and no answer is correct (or wrong). The goal is to think outside of the (cardboard) box, literally, and examine the root of the problem. Essentially, we were looking to solve for packaging waste in a sustainable way, as opposed to designing a single product to replace the cardboard box. This means examining form, function, and material use for the entirety of the product lifecycle. The result: a full-circle shipping solution in the form of a reusable, trackable shipper that lasts up to 10 years.

How it Works

The LimeLoop shipper is made from recycled billboard vinyl and is designed to be reused over and over, in place of a cardboard box or mailer. Designed to be modular, the shipper can snap and contract as needed. When expanded, the shipper is large enough to hold up to 11 adult shirts comfortably. Waterproof, abrasion-proof, and trackable, the shipper is built to last up to 10 years. This extended lifecycle reduces carbon emissions, energy, and the consumption of valuable resources such as trees, water, and oil.

When you receive your order from participating brands, all you need to do is take your product out, flip the mailing label over, and put the shipper back in the mailbox instead of in the trash. The shipper is then mailed back to the brand so it can be used again for the next customer. As we like to say, it’s as easy as zip, flip + ship.