The next frontier in e-commerce packaging: reusable bags and boxes - The Entrepreneurial Way with A.I.


Tuesday, November 22, 2022

The next frontier in e-commerce packaging: reusable bags and boxes


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As consumer concern mounts about the waste generated by e-commerce, some companies are beginning to embrace a variety of reusable packaging strategies. 

These strategies have become more relevant since U.S. e-commerce sales exploded during the start of the pandemic and have remained active. This trend has created a commensurate need for plastic bubble mailers and cardboard boxes, as well as bags and insulated containers for delivery or pick-up services, in a global packaging market worth billions of dollars. While some packaging may find its way through the recycling process, the vast majority — especially items made with plastic — is landfilled or incinerated. 

Kate Daly, managing director of Closed Loop Partners’ Center for the Circular Economy, said reuse in this area is still in its nascent “experimentation” phase, with long-term testing “critical to gauge the best path forward” in creating a truly circular reuse system.

“Operational, regulatory and cultural shifts need to be navigated by brands, customers, policymakers and others for us to achieve a future in which reusing valuable materials and products … becomes commonplace,” Daly said via email.

Lending systems within subscription models, as well as deposit-based and fee-per-use systems, are some of the approaches currently showing promise, although each model comes with its own set of challenges. Daly sees strong potential in subscription-based services in which refillable products are delivered and returned in reusable packaging; for example, TerraCycle’s Loop facilitates this sort of system for various grocery, beauty and other brands. 

Another company that has waded into this territory is Returnity, which started by focusing on reusable shipping bags with online consignment shop thredUP as its first customer and investor. But the logistics of the company’s original model — bags that were costly to make and mail, then sent empty to customers — didn’t make financial sense.

“Reuse is, frankly, rarely about packaging challenges; it’s almost exclusively about systems challenges,” said CEO Mike Newman. The trick: finding places where circularity already exists.

Returnity now partners with fashion rental brands such as Rent the Runway and ships full clothing bags in both directions. This is similar to e-commerce platform Olive, which offers customers a reusable shipping option at purchase for brands such as menswear company Rhone. 

Returnity’s bags tend to integrate some recycled plastic content, although this increases costs, which Newman calls a “sensitivity.” A 90% to 95% reuse rate is the goal, with a minimum of 20 use cycles. Newman said that anything over seven to 10 use cycles is “when you can clearly cross cost and environmental benefit thresholds.” Though he noted that studies show environmental benefits start to happen over five use cycles, with at least an 80% reuse rate. According to Newman, the reusable packaging Returnity’s top three customers have ordered from the company to date will displace 20 million pieces of single-use packaging.

As the company seeks to scale up operations, it has identified two new initiatives that are proving operationally efficient. The first is supplying reusable bins to PayPal’s Happy Returns program, where Newman said products returned by customers are normally moved in an “insane” number of single-use cardboard boxes between warehouses and retail locations. The second is supplying reusable grocery bags to zero-waste delivery company The Rounds

“These may seem like narrow components of the supply chain,” said Newman, “but the impact from solving this reuse is huge.” 

Additionally, retailers can retire and recycle the grocery bags for even more of an environmental win. “Even the most durable reusable packaging will require decommissioning after many uses, so designing for recyclability is critical,” said Daly.

Like Returnity, zero-waste brand Trashless is branching off from its original model into other reusable possibilities. The company delivers glass-bottle milk to over 50 local convenience stores and coffee shops. It also currently delivers several hundred food, bath and beauty products to several thousand direct customers in Austin. These goods are delivered in reusable, insulated bags that are reclaimed with empty product containers the next time a customer places an order.

Each insulated bag lasts for 300 uses. Since they’re double the size of a normal bag, the company says each one keeps 600 single-waste plastic bags out of the waste stream. It’s a model that Trashless will use as it opens hubs in five as-yet undisclosed locations across the U.S. in 2023, said CEO Yogesh Sharma. 

Sharma is building a new reuse initiative around this original one and using it to grow his business. In time for Cyber Monday, Trashless will begin shipping products across the U.S., in some of the billions of cardboard boxes that normally occupy space in consumers’ recycling bins. Sharma plans to source some of these from existing customers, who will be instructed to fold and stash them in the insulated bags they’re already returning to the company. These will be tracked by QR codes and inspected, with customers earnings 20 cents for each box that passes muster. 

The plan for now is to give these boxes just one more use. But Sharma anticipates that down the line — with the five new hubs also acting as “marketplaces” for used boxes, and customers anywhere in the country given the opportunity to ship boxes of boxes — the company might achieve enough circularity to use them four or more times. A pilot phase has proven popular with 100 customers he said.

 “They can’t wait to participate, so clearly there’s a nerve we’ve struck.”


Lela Nargi, Khareem Sudlow