“Polybags are the worst thing in the world. Everyone hates them but they are a necessary evil,” says Steve McCann, marketing director at Toad and Co.

Polybags are the clear plastic bags the nearly all apparel items are shipped in. But brands can’t just get rid of them without a replacement. Retailers need something to shield a garment from the elements as it makes its way through a warehouse on a belt, being picked, packed and shipped and making its way on a ship, truck or van or all three to a store or to a shopper’s doorstep, where it may encounter rain, snow and sleet. If the product gets damaged at any point, it will be thrown out.

“The lifecycle of ruining a garment versus the lifecycle of a polybag is much worse,” McCann says.

Since Toad and Co. started selling online in 2014, the brand went from using one traditional polybag, to optimizing the design to be more sustainable in five different sizes. It aims to eliminate polybags completely by 2024.

Shipping a ‘better’ polybag

The brand’s first iteration of making its polybags more sustainable was shrinking the standard width of each polybag to better fit its garments. What’s more, instead of using one larger polybag that would hold any of its products, it invested in polybags of different sizes so that each bag fits the garment, reducing the plastic required. It also thinned out the plastic to further minimize the amount of plastic used.

Steve McCann, marketing director at Toad and Co.

In addition, Toad and Co. changed the location of the airholes on its polybags. It moved them from the bottom of the bag to the top and alerted shoppers these polybags could be reused to pick up dog waste, McCann says.

And even after all these efforts, the retailer is working to eliminate all these polybags.

One alternative packaging retailers use is a compostable polybag made out of plant-based materials. These bags, however, have mixed reviews from vendors and merchants. While compostable materials could be better environmentally than single-use plastic, it’s challenging for consumers to get the bag to the proper facility. A consumer would have to drop them off at a collection point that takes this specific material. If a consumer throws out this material it could emit more methane in a landfill than other types of trash, according to several vendors, analysts and retailers. And if a consumer puts the bag in the normal recycling bin, it could clog and contaminate the normal recycling process, causing the entire batch of recycling to end up in a landfill.

Toad and Co. switches to paper polybags

Because of these issues, in 2020 Toad & Co. started working with packaging vendor Vela to pilot its paper polybags. They are made of  Forest Stewardship Council-certified paper and can be recycled with mixed paper. This makes them much more likely to actually get recycled than a compostable bag. FSC is a nonprofit organization that ensures the paper is from a forest that is responsibly managed for environmental, economic and social benefits.

After piloting the paper polybags with a few products, the retailer confirmed they were sturdy enough to protect its garments and of the same quality as a traditional polybag, and began rolling them out across all of its products. Once the brand hits a certain minimum order volume of products at each of its factories, it makes the switch to using this product. As of Q2 2023, about 82% of its products use the alternative polybag and by spring 2024, 100% of them will, McCann says.

Toad and Co.’s shoppers have not commented on the switch in materials, but its wholesale accounts have reacted positively, McCann says. When brands ship items to stores, just like to a shopper’s home, each garment is encased in a polybag. Store employees open each bag and hang the garments up.

“They see it more so than anyone else, this is so much waste and so much plastic,” McCann says.

About 50% of Toad and Co.’s sales are direct-to-consumer online and the other half are wholesale to retailers, he says.

A more dramatic alternative: reusable packaging

To further lower its carbon footprint, Toad and Co. also gives shoppers the option to have their orders shipped in a reusable package. With vendor LimeLoop, Toad and Co. rents weatherproof bags. The bag are made of recycled polyester, mostly old billboards, on the outside. They have a zipper closure instead of tape and are recycled cotton on the inside.

For each LimeLoop medium bag, a retailer reduces 92% of carbon dioxide emissions and 99% of water use compared with shipping that order in a medium size cardboard box, according to LimeLoop. Similarly, for each LimeLoop small bag, a retailer reduces 42% of its carbon dioxide emissions and 9% of its water use compared with a polymailer plastic bag, according to the vendor.

The retailer piloted LimeLoop in 2018 and was one of its first clients. Its relationship ebbed and flowed throughout the years, as Toad and Co. has paused and resumed the service as it replatformed its ecommerce site and moved warehouses.

Here’s how it works: On the checkout page, shoppers can choose four shipping options, free standard, free standard with a LimeLoop mailer bag, paid second day or paid next day. If a shopper selects the LimeLoop option, her order will arrive in a reusable bag with instructions on how to return the bag. Once the shopper decides if she is keeping her entire order or is returning items, she visits ToadandCo.com to print a free return label. She puts the label it in the front sleeve of the bag and can drop it off in any U.S. postal service mailbox.

Toad and Co. commits to less packaging by sending orders in reusable bags.

Toad and Co. shoppers use LimeLoop

About 12-15% of Toad and Co.’s online shoppers select the LimeLoop package option, and 20% of those who chose LimeLoop as their fulfillment method, choose it again, McCann says. These are healthy numbers, McCann says, especially when considering how many new customers Toad and Co. has, he says without revealing more. For non-LimeLoop orders, Toad and Co. ships products in a 100% recycled paper mailer with water-based inks to ensure shoppers can recycled the bag.

Unlike thinning its polybags and increasing the number of polybag sizes it uses, the LimeLoop sustainable packaging is highly visible to the customer and something Toad and Co. receives a lot of positive feedback on, McCann says.

“It’s something that people when they look out their window, they get it. They get how many boxes they get from Amazon that you can’t even fit it all in your recycling bin anymore,” McCann says. “[Shoppers] understand it’s an issue, but they don’t see anyone doing anything about it. But they also love the convenience of [online shopping] and are not willing to change the convenience aspects. I think when brands have an option and it’s different and it’s addressing the issue, they love it and grab on to it.”

Printing the return label is a barrier for shoppers to using the service, McCann says. It is still working on the logistics of getting its systems to talk to each other to include the label with the package and how that would work if a shopper decides to return any number of items. LimeLoop says most of its clients include the return label with a package. LimeLoop has 45 online retail clients, mostly small businesses with annual revenue less than $5 million.

Challenges in getting the LimeLoop bags back

It takes about two weeks from when Toad and Co. ships an order to when it receives the bag back, a speed the retailer is continually trying to get faster, McCann says. The more it can reuse the bags, the better.

If Toad and Co. can use a LimeLoop package twice in one month, it breaks even in cost compared with traditional packaging. Otherwise, this shipping method is more expensive, McCann says without revealing more. LimeLoop rents the bags to retailers for about $1 per bag per month, and they can be used at least 200 times, the vendor says. So far in 2023, Toadandco.com has hit the twice-a-month frequency for each bag.

“Our benchmark KPI is that turnaround time,” McCann says.

When Toad and Co. first started using LimeLoop bags, it had trouble getting shoppers to return the bags, as some thought they were theirs to keep.

“The biggest part of the pilot learning was about the returns and how to communicate with customers,” McCann says.

In surveys, Toad and Co. learned that shoppers may take a few days to open their package once it arrives and then a few days to try on items and then decide what they want to keep. Then they have to print a label, which they may have to leave their house to do, and then put the bag in the mail. This all takes time.

About 12-15% of Toad and Co.’s online shoppers select the LimeLoop package option.

Toad and Co. learned that it needed to communicate urgency about returning the bags and educate shoppers in its emails about the importance of sending the bag back quickly in order for the process to be a sustainable option.

Communication with customers

In the five years since piloting the feature, industry standards have changed around communication with shoppers, McCann says. Previously, Toad and Co. hesitated to email customers more than three times a week, but now it has no issue contacting shoppers every day, McCann says. It can automatically send reminder emails via LimeLoop, as its systems know which customers haven’t returned their bags yet.

The vendor says some of its clients charge a few dollars as a deposit to customers to use the LimeLoop bag that retailers refund once they receive the bag back in the mail.

“This helps to keep the reusable packages always in motion and many clients utilize this feature,” a LimeLoop spokesperson says.

Bernardine Wu, executive managing director of digital strategy at digital consultancy OSF Digital, says LimeLoop is an interesting packaging vendor to watch, as it provides a sustainable packaging initiative that can scale and make an impact.

Integrating LimeLoop

It took a few months to integrate LimeLoop into all of the systems, McCann says. The retailer has done this twice, once when it launched, and then again in 2022 after a few months of program pause while it replatformed to a Shopify ecommerce site and moved warehouses.

When a shopper selects LimeLoop, the warehouse needs to know which order is selected for that package, as does its ordering platform, and shipping and return vendors. All of these integrations have to be built into its systems.

The merchant also had to learn how many shoppers would actually choose this option and how that correlates to how many LimeLoop bags it needs. Initially, Toad and Co. had 400 bags and it would frequently run out of them. Then, it couldn’t offer the option to shoppers until it received a bag back. In 2022 it invested in more bags for now a total of 2,800 and it no longer runs outs of bags.

Even though the system seems complex, Toad and Co. is happy with the program and the customer response. When Toad and Co. communicates to shoppers about the program either via email or on social media, those communication pieces always receive lots of feedback, McCann says.

While it wants to encourage more shoppers to choose this option, it is going to leave it at that, an option, McCann says.

“We can encourage and education and let people make an educated decision on what they want to do,” McCann says.

Toad and Co. is No. 1623 in the 2022 Digital Commerce 360 Next 1000.

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Beflax sells $300 linen sheets, and sustainability is one of its brand values. Many online luxury shoppers have come to expect an online package to arrive with ample tissue padding sealed with branded stickers, paper filler and ink branding on the box, says Katerina Rothman, founder and CEO of Beflax Linen.

“I want to give the best experience to customers,” Rothman says. “They are paying on average $300 per set, and people want to see the value — even in the box when they are receiving and opening it. There is still a missing link in the majority of consumers. Even if they are more sustainably minded and ecofriendly, they still want to have this luxury experience of all this tissue paper and opening a nice slick box.”

Initially, Beflax shipped its orders in an unbranded cardboard box — Rothman refused to use a plastic bag — with recyclable craft tape instead of plastic tape and extra tissue paper to connote a luxury unboxing experience.

Katerina Rothman, founder and CEO, Beflax Linen

“It’s against my principles to put the product into plastic bags or plastic tape over the boxes,” Rothman says.

Often, when a box is branded with too much ink, it can no longer be recycled. Rothman was close to signing a contract for custom boxes that included Beflax branding while still recyclable, but she decided against it.

“The price was good, but the part was killing me — there was no guarantee the factory in China was working up to ecofriendly standards,” Rothman says. “And it logically didn’t make sense to me to ship products from across the world.”

Beflax is based in Denver and manufactures its linen sheets in Portugal.

How shipping with LimeLoop works

In Q3 2022, a colleague introduced Rothman to LimeLoop packaging. The vendor provides reusable ecommerce packaging to retailers. The bags are made of recycled polyester, mostly old billboards, on the outside, have a zipper closure instead of tape and are a recycled cotton on the inside. On the outside, the package has a sleeve for the retailer to insert the shipping information, instead of using a sticky label.

After a few weeks of negotiating and a month of implementation, Beflax started using the LimeLoop bags as its packaging. Here’s how it works: Beflax ships all its products in one of three sizes of reusable bags to the shopper. The shopper receives the product, which includes a card for how to return the bag. The bag will have the return shipping label on the back of the main shipping label, which the shopper will flip over on the front of the package. The customer then mails this bag using any U.S. Postal Service box, and it will make its way back to Beflax.

Beflax ships all its products in one of three sized reusable LimeLoop bags for a luxury unboxing experience.

The bags can be reused at least 200 times. After that, LimeLoop will recycle them again into new reusable packages. Beflax rents the bags from LimeLoop for $1 per bag per month. Currently, Beflax rents 50 bags, which it can use multiple times per month. Beflax, which launched in 2017, has annual revenue around half a million dollars, Rothman says.

On average, it costs Beflax $16-18 to ship the product and about $4.50 for return shipping. Beflax absorbs some of these costs as it charges shoppers $15 for shipping. (Beflax provides free shipping for a consumer’s first order.)

Reusable packages works in practice for Beflax

The cost for Beflax is comparable to what it would cost the brand to purchase traditional shipping materials, including unbranded boxes, tissue paper, tape and sticky labels, she says. And the main return on investment, Rothman says, is that it’s the right thing to do.

For each LimeLoop medium bag, a retailer reduces 92% of carbon dioxide emissions and 99% of water use compared with shipping that order in a medium-sized cardboard box, according to LimeLoop. Similarly, for each small LimeLoop bag, a retailer reduces 42% of its carbon dioxide emissions and 9% of its water use compared with a polymailer plastic bag, according to the vendor.

Beflax has not conducted a poll about how shoppers feel about using the LimeLoop bags. Rothman, however, is confident the bag provides a luxury unboxing experience, describing the bags as slick with very nice inside fabric. The inside of the bags are so soft that the brand doesn’t wrap the sheets in any additional packaging, such as a polybag, Rothman says.

Beflax has not had an issue with shoppers returning the bags in the three quarters it has used the bags. If a customer is ever slow to return its packaging, Beflax contacts her reminding her to send it back, and she does.

Beflax also sells its products on Wayfair Inc., Etsy Inc. and Amazon.com Inc. Because Beflax doesn’t receive the customer information when selling on these platforms, it does not use the LimeLoop bags and uses its previous, disposable packaging, without the extra tissue paper. It’s too big of a risk to send out bags without the shopper information, Rothman says.

Brands search for more sustainable but luxury unboxing

Bernardine Wu, executive managing director of digital strategy at digital consultancy OSF Digital, says LimeLoop is an interesting packaging vendor to watch, as it provides a sustainable packaging initiative that can scale and make an impact.

“Retailers and brands should focus on the approach that makes most sense and is most viable to their business, but at the same time, it is important to make sure that sustainability initiatives are aligned to the customer values, and it has to be a sincere and prioritized effort,” Wu says.

LimeLoop launched in 2018 and has 45 online retail clients, mostly small businesses with annual revenue less than $5 million. It does have some enterprise clients, with a handful in the pipeline, a spokesperson says without revealing more.

EcoPackables is another ecommerce vendor that provides sustainable packages to ecommerce merchants, including recycled plastic, recycled cardboard and compostable materials. EcoPackables has been in business for four years and has more than 100 enterprise clients, such as Ted Baker and Revolve, and more than 2,000 small businesses, many of which are Etsy sellers, that use its products. It does not count many luxury sellers in its client roster, however. Founder and CEO Shervin Dehmoubed says this is because many higher-end brands are reluctant to give up the extra tissue paper “garnish” in their packages.

“The reason why we don’t do high-end packaging is it goes against our ethos. The amount of waste in that packaging is crazy,” Dehmoubed says.

But Dehmoubed is hopeful that this might change as more brands want a better sustainability story and more consumers demand it. In fact, it may even come down to social media influencers not doing unboxings with confetti coming out of the box but to having recycled paper in there one day, he says.

Toad and Co. reduces packaging with LimeLoop

Similarly, apparel brand Toad and Co. also thought deeply about its packaging and wanted it to tell its brand story in a robust and rich way, says Steve McCann, marketing director. For example, many new or luxury brands, such as Apple Inc. will tell their brand stories within the packaging and will include a booklet highlighting the products’ features or other details about the brand for a luxury unboxing.

“You say, ‘I want this for my brand,’” McCann says. “Then you ask yourself, ‘Is this what my brand stands for? And you say ‘No, that is so much waste.’ And how do we get beyond that? How do we still have that story while being minimal and being responsible?”

And so, Toad and Co. went minimal, with no inked boxes, no attached hang tag and no booklet describing its brand. Instead, it gives shoppers the choice between recycled paper mailers and reusable LimeLoop bags.

About 12%-15% of Toad and Co.’s online shoppers select the LimeLoop package option, and 20% of those who chose LimeLoop as their fulfillment method choose it again, McCann says. These are healthy numbers, McCann says, especially when considering how many new customers Toad and Co. has, he says without revealing more.

“When brands have an option and it’s different and it’s addressing the issue, they love it and grab on to it,” McCann says about the LimeLoop bags.

Toad and Co. is No. 1623 in the 2022 Digital Commerce 360 Next 1000.

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The post Bedding brand aims for luxury unboxing without extra tissue paper appeared first on Digital Commerce 360.

Alex Tomey, senior vice president and chief merchandising officer, Global Industrial Co.

Alex Tomey, senior vice president and chief merchandising officer for industrial and commercial products distributor Global Industrial Co., is applying his 20 years of merchandising expertise to help Global Industrial improve margin performance, accelerate new category expansion, and strengthen core and private brand product growth.

Prior to joining Global Industrial in 2021, Tomey applied his merchandising expertise at such companies as Petco, DICK’S Sporting Goods, Kohl’s, and Walmart.

DC360: What is driving B2B companies like Global Industrial Co. to expand online?

Tomey:  B2B customers expect a similar experience purchasing products online as they have in their personal life; everyone is challenged for time and the convenience of researching and buying products online greatly improves efficiencies. We continue to focus on improving the customer experience by elevating our content, functionality, and integration with our managed sales organization.

DC360: What are your biggest internal or and external barriers?

Tomey: The pandemic, the supply chain crisis and inflation has created a lot of disruption in the market place the last three years. It also inspired a lot of transformation and innovation. At Global Industrial, we re-branded our company, launched a new website, and re-vamped our ‘Go to Market’ strategy, focusing on elevating the customer experience.

DC360: What are the chief gains you’re realizing?

Tomey:  We have doubled down on our customer focus; fully integrating our product and marketing strategies, operational efficiencies, and customer service. We are confident this will position us to drive customer acquisition and growth over the long term.

DC360: What is the most valuable piece of advice you have on how to launch online B2B sales or increase them?

Tomey: Develop seamless customer touch points to drive efficiency and improve the overall experience.

Alex Tomey, senior vice president and chief merchandising officer of distributor Global Industrial Co., will speak during the session, “Make Sustainability A Differentiator for Your Company,” at the EnvisionB2B Conference & Exhibition in June in Chicago. 

Peter Lucas is a Digital Commerce 360 contributing editor covering B2B digital commerce technology and strategy.

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“We would never do that,” he says.

Instead, the online merchant of cleaning and household products has about four box sizes and two envelope sizes to appropriately fit each size order into the correct box. And for orders with a few products — the average order size on Grove.co is eight to 10 products — its warehouse workers “Tetris” or puzzle together the fulfillment box so all the products fit inside, Landesberg says.

Packing in the Grove warehouse

Stuart Landesberg, CEO and co-founder, Grove Collaborative

This packer position at the Grove warehouse is not entry level. It requires more training and comes with a promotion. Packers receive a week of hands-on training, then a month of guided supervision as they learn how to pack the boxes and their expected goals.

“The training process at Grove is longer than most ecommerce packer training programs because the nature of our product and packaging expectations requires a level of detail that isn’t always necessary in a traditional packing role,” Landesberg says. “Our team members understand the importance of optimizing products and packaging materials in such a way that does not contribute to a higher carbon footprint.”

2022 Ecommerce Fulfillment Report

Analysis of the latest trends in ecommerce fulfillment. Includes over 30 charts, shipping policies of Top 1000 retailers, Amazon’s fulfillment practices, the state of the worldwide supply chain, and updates on in-warehouse automation and delivery robotics. 

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Landesberg describes the role as a “pressure seat.” The employee receives the touts with the products picked for the order and the appropriately sized box. Then, they have to quickly fit it all in, as employees have a units per hour goal.

“In addition to specific quality and safety goals, packers at Grove have an incremental units per hour goal to meet based on how long they’ve been in the job function,” a Grove spokesperson says. “The quality goals focus on ensuring that packed items arrive to our customers safely and in good condition.”

Other warehouses might use a robot to perform this task. Grove is willing to pay a bit more to have this step of the fulfillment process done right to be a more sustainable merchant. Landesberg declined to share its warehouse employee wages.

“I haven’t seen anything robots can do as good as a human,” Landesberg says about this box packing step. Grove weekly tracks customer satisfaction and feedback as the primary success metrics for Grove packers.

A sustainable Grove

Grove launched in 2012 as ePantry, and in 2016 rebranded to Grove Collaborative, an online-only brand with sustainability as its core mission. About 13% of the products sold on Grove.co are its own brand. The remaining 87% are from other brands it sells, such as Mrs. Meyer’s, Method and Rooted Beauty. Today, Grove is publicly traded, a certified B. Corp., and sells a selection of its branded products at Walmart, Target and Amazon. Grove Collaborative generated $321.5 million in net revenue in 2022. This was down 16% year over year, the merchant reported, and it is operating at a loss.

Grove is plastic-neutral, meaning for every pound of plastic sold, it collects and recycles that same amount in nature through rePurpose Global. Its goal is to be plastic-free by 2025. And that means Grove Collaborative has routinely iterated on its product and fulfillment packaging.

Packaging: lighter, smaller and less

To achieve the lowest carbon footprint on a fulfillment box, it’s all about lower weight, smaller size and less package, Landesberg says.

Grove focuses on only selling products that are smaller in size — or changing them to fit this mission. For example, instead of selling a full-size mop, which is bulky to ship, it made its broom stick collapsible to fit into a much smaller box. That brings Landesberg to a tip for merchants striving to be more sustainable: Invest in multiple box sizes.

“The best solution is well-trained labor and enough box sizes that you can match products to appropriately,” he says.

At one point, Grove had 30 box sizes. Now, it has settled on its four boxes and two mailers, which can appropriately fit its all of its orders.

Fewer boxes per order

Another shipping practice that Landesberg claims Grove “would never do” is splitting up an order of eight to 10 products into eight to 10 shipments. The carbon footprint is much larger for multiple boxes instead of a slightly larger box that can hold a few more objects, he says.

While orders arriving in multiple boxes sometimes happens, especially for larger orders, Landesberg says split shipments are less than 5% of all of its orders. This is below the industry standard, in which 21% of orders from an online retailer arrived in more than one shipment, according to data from fulfillment vendor Narvar Inc. collected October-December 2021.

Because Grove launched as a vertically integrated online brand, it purposely designed its products to ship directly to consumers, not for a store shelf, Landesberg says. For example, it’s laundry detergent is sold in a 1-ounce concentrated glass bottle that shoppers can mix with water at home, unlike the large bottles sold in stores. Its candles are packaged in a box with a thinner glass, unlike the freestanding, thick-glass candles at stores.

These modifications to the product package allow Grove to ship orders to consumers in a way that weighs less, takes up less space and uses less interior packaging in the box.

And after the packages are snuggly fit in the box, Grove uses a recycled paper to pad the products during the shipping journey. In May 2019, Grove went through its supply chain and eliminated single-use plastic and switched to paper materials.

Grove.co’s paid members are its more frequent purchasers

These initiatives resonate with a certain cohort of shoppers who strive to live a sustainable lifestyle. Grove is No. 301 in the 2022 Digital Commerce 360 Top 1000.

About half of Grove.co’s sales are from shoppers making one-time purchases priced 5-20% above the discount it gives consumers who sign up for a subscription to products.

The other half of Grove.co’s sales are from consumers who signed up to receive auto-replenishments of  products or paid $19.99 for an annual VIP program membership. Members receive seven free gifts a year, exclusive sales, early access to new products and free samples. Landesberg says “hundreds of thousands” of customers are paid members, but declined to share the exact number.

Nearly 50% of paying members renew memberships annually, Landesberg says.

Landesberg says he is pleased with this membership retention rate. He points to the value of the program, the strong brand and engaged community as reasons for this retention rate. For example, members can join its private Facebook group, which is “incredibly engaged,” Landesberg says.

The average order value for traditional shoppers compared with members or subscribers is about the same, Landesberg says. He did not reveal that figure. The frequency of purchasing, however, is much higher for members and subscribers, from six to 12 times per year. That compares with traditional shoppers, which is about four times per year.

Grove expands its retail presence

But even with such high engagement rates on its own site, Grove Collaborative knows many shoppers still do not recognize its brand.

To that end, since 2021, Grove has sold a selection of its products with national mass merchants including Target Corp. and Amazon.com Inc. In 2022, Grove expanded to sell its products in CVS Caremark Corp., Harris Teeter Supermarkets LLC, H-E-B Grocery Company, Meijer Inc. and Giant Eagle Inc. Today, Grove products are sold at thousands of retail locations, including at mass merchant Walmart Inc.

“To change the category, we need to play in the channels where the majority of people are buying these products,” Landesberg says.

But the goal, Landesberg says, is not to introduce them to Grove on Target and then get them to buy that product on Grove Collaborative.

“It’s my goal to get them to come back and get them to buy that product again,” Landesberg says.

“Economically, yes, we make more money when they buy their entire regimen from Grove,” he adds.

He knows the majority of shoppers don’t buy their household cleaning and personal care products directly from a brand’s website. They buy these products from a mass merchant. Grove declined to share what percent of its sales are from its direct-to-consumer site or from other merchants.

Kathy Kimple, executive director, digital strategy, at ecommerce consulting firm OSF Digital, says it’s interesting to see subscription-based companies expand into retail. Shoppers save on shipping and get the product immediately. Meanwhile, the brand gets more exposure.

“As access to their products grows, there will be less need for subscription,” Kimple says. “Depending on the company’s goal, lower subscriptions may be offset by brand awareness if retailers start to carry more Grove products.”

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These were some of the most interesting trends to watch from Shoptalk.

AI is everywhere

Artificial intelligence was the single most popular topic among presenters and panelists. Executives and speakers faced dozens of questions about how AI might change retail. 

Noelle Sadler, CMO, ThredUp

Executive vice president and chief digital and information officer at Lowe’s Seemantini Godbole pointed to the home improvement retailer’s app as an example of AI’s potential applications. The app can be used to measure square footage of a room and see how appliances will fit. It’s not “nice to have; it’s essential,” Godbole said. Lowe’s Cos. Inc. ranks No. 11 in the Top 1000.

Other retailers spoke about using artificial intelligence to make better recommendations to customers. For example, ThredUp chief marketing officer Noelle Sadler described how the resale company uses AI to suggest similar products to customers. Shein global head of strategy and corporate affairs Peter Pernot-Day told Digital Commerce 360 that the apparel retailer also uses AI to make recommendations to consumers. The company then uses information on customer preferences to create new collections for customers in just a few days.

Video and livestreaming have potential

Shopping through livestream video is still relatively unpopular in the U.S. market, but several retailers and marketplaces at Shoptalk described how that could change.

Ecommerce marketplace Verishop found that customers react strongly to videos. The marketplace uses automation to turn livestreams from creators into smaller evergreen clips that can live on product pages. Products with video reviews saw conversion rates improve more than 40%, co-founder and CEO Imran Khan said.

Fragrance company Nest takes a different approach. Live videos are a way to sell products like fragrances that consumers traditionally want to see in person, chief digital officer Andrea Moore said. Nest uses videos to establish its credibility in the fragrance world, answer consumer questions, host product premiers, and showcase exclusive offers, Moore said.

The secondhand market is growing

ThredUp’s Shoptalk presentation

Secondhand sales were also discussed throughout the conference by a number of retailers. ThredUp president Anthony Marino began a panel discussion of resale companies by saying that used clothing has gone from having “stigma to status.” ThredUp now works with 20 companies to manage their resale markets, including J. Crew (No. 87), Gap (No. 19), and Abercrombie and Fitch (No. 57). The clothing resale market is growing 16 times faster than the broader retail market, per ThredUp’s data. The company said more than half of consumers purchased secondhand clothing in the past year.

Reham Fagiri, co-founder and CEO of furniture resale marketplace AptDeco, told a similar story about used furniture. The furniture resale market is growing about three times as fast as total retail, Fagiri said.

Both ThredUp and AptDeco attributed the growth to customer expectations of convenience and sustainability. To work directly with retailers, ThredUp and AptDeco both emphasized that they can bring new consumers to brands that might not buy them at the original price points. AptDeco partnered with Williams-Sonoma Inc. (No. 22) to list returned or slightly damaged furniture, and in turn gives the retailer data about how to price used items.

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H&M is No. 11 in the Europe Database, Digital Commerce 360’s ranking of the region’s largest online retailers by web sales.

H&M’s resale market will launch immediately

The retailer will start its first resale platform in the U.S. market, H&M Pre-Loved, on March 14. The launch includes 30,000 items of used women’s and kids’ clothing and accessories on hm.thredup.com. The Swedish apparel company is the largest retailer to sell used clothing and accessories via ThredUp’s resale platform. ThredUp already works with several dozen other brands and has launched resale programs with J. Crew and Kate Spade in 2023.

“We need to take responsibility for the impact fashion has on climate and the environment,” Abigail Kammerzell, head of sustainability for H&M North America, said in a statement. Business models such as this can help “reduce and limit this negative impact, while continuing to deliver fashion and style for our customers,” she said.

In February, H&M announced a program to sort used clothing in Europe for resale and recycling.

Customer demand is unclear

It’s too soon to say whether resale programs will ultimately lead firms to produce less clothing because of declining demand for new goods.

Digital Commerce 360 asked customers about these preferences in a September 2022 poll of 1,064 shoppers. 13% said that they had purchased a previously owned product from an online consignment seller. 14% said they had made purchases based on a retailer’s sustainability policies. About one-third of respondents said they never used these services and had no plans to in the next year.

For companies such as H&M, it can be easier and less costly to use the existing technology and logistics of resale platforms powered by ThredUp and its competitors, rather than creating a service on their own. “Resale-as-a-service” is a source of revenue for ThredUp in addition to what it earns selling used items on its own marketplace website. ThredUp doesn’t disclose how much revenue it generates selling through its business model.

H&M didn’t reveal its forecast for potential revenue from the sale of its used items. Many companies that have launched resale platforms recently have said that initial revenue is likely to be minimal but that it will grow over time as the market expands.

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ReverseLogix is a returns management system designed to streamline the return experience for customers and reduce costs for retailers. Fortune 500 and 100 companies including Shopify, FedEx, and Samsonite are customers.

To offer free and low-cost returns, retailers must process them efficiently. If customers are happy and data is used to make improvements, they can actually be a “superpower,” he said.

Saran shared ReverseLogix’s three principles of returns: 

1. Transform a difficult process into an enjoyable experience for loyal customers
2. Minimize losses
3. Maximize intelligence

Returns are the key to loyal customers

Making returns easy for consumers is a way to create a loyal customer, Saran said. Free returns in particular are important to customers.

An August 2022 Digital Commerce 360 survey of over 1,000 consumers found shoppers regularly consider a potential return before they purchase. 54% take free returns into consideration, and 39% also look at the cost of a return. One-quarter of consumers said the timeframe is important.

Giving customers a good return experience is crucial if retailers want the customers to shop with them again, Saran said. One strategy for wooing customers with convenient returns is offering home pickups and alternate drop-off locations, like reverse logistics vendor Narvar. A courier picks up the return from the customer’s house and ships it with the appropriate service. That convenience resonates with customers.

31% of respondents in the Digital Commerce 360 survey said that they prioritized the convenience of returns over other considerations.

Minimizing returns losses

Returns are never ideal for a retailer, Saran said.

“The minute someone starts a return request, that is an instant loss for the brand. No matter what you do, it’s a loss,” he said.

But successful retailers can find ways to make those losses as small as possible. They can also give merchandise a second life by getting it back into stock or circulating in recommerce.

In 2022, about 16.5% of retail purchases were returned, totaling about $816 billion, according to the National Retail Foundation. Salesforce predicted a “return tsunami” in 2023.

Part of minimizing these losses is processing returns quickly and efficiently, reducing the amount of time and employee hours spent on them, Saran said. 

Global Retailer, a U.S.-based footwear retailer, said in a case study shared with Digital Commerce 360 that ReverseLogix made returns 60% faster through the customer returns portal, processing technology, and tracking technology for customers.

ReverseLogix’s integration across the retailer’s divisions was central to saving time and money.

“The retail side has its own portal to create returns,” the retailer’s director of distribution management said in the case study. “Customer service has their own portal. Our stores are integrated with UPS for better visibility and tracking. Instead of having to print one return label and one shipping label, we’ve streamlined that to one label that has all the information we need.”

Using data

Retailers typically discuss returns as a total loss, Saran said, but they’re also a rich source of data for companies. 

ReverseLogix collects data from customers on why specific products are returned, revealing problems in the product. For example, if “most customers are returning a particular product because they said it’s too tight, maybe sizing is a little bit off,” he said.

That data allows retailers to know what versions of items are selling and which are not, which can impact future inventory decisions. The ReverseLogix technology can intelligently take into account the type of product, price, seasonality, and other information to make the best recommendation for processing a return. 

Retailers use that data to make informed suggestions about how to process a return and work toward sustainability targets, Saran said. That could mean letting a customer keep a product that would cost more to ship back than it’s worth, or connecting with a local repair business. 

The data from these returns may be a missed opportunity for companies that don’t have an integrated online return process.

46.7% of Digital Commerce 360’s Top 1000 retailers offer online returns processing, and just 27.4% have free return shipping. Jewelry, apparel, and accessories retailers are the most likely to offer free return shipping.

Returns are a chance to upsell

Loop, another returns management company, said it broke return records in 2022. It says it processed a return every 1.25 seconds on average on Dec. 27, 2022, its busiest day ever, and 300,000 returns between Dec. 26 and Dec. 30.

All those returns were also opportunities to get customers to spend more money. The system, which is integrated with Shopify, allows consumers to return purchases for refunds, but they can also exchange the product. Loop surfaces other products customers could buy using the value of the refund, so the Shopify merchant doesn’t lose the sale completely.

Process returns holistically

The key to achieving these principles is integrating returns into every part of an ecommerce business, Saran said. Returns impact customer success, manufacturing, and supply chain teams, he said, so you have to think about returns every step of the way. 

The retailers that can do this successfully are able to integrate returns into the creation, shipping and purchasing process. In some cases, with the right data and processes, retailers can “convert a loss maker into almost a profit center,” he said.

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Ikea will switch to eco-friendly glue

Ikea’s 2030 climate goals require boosting renewable energy use and reducing the climate footprint of its materials. Also tucked among those challenges is the glue that holds some of the furniture giant’s most popular products together.

The glue Ikea uses to make its beds, sofas and everything in between makes up 5% of its total carbon impact, according to its 2022 Sustainability Report.

“Moving toward glues from renewable sources is a key enabler to achieving our overall climate goal,” Ikea said in the report. But “a big challenge with bio-based glues remains that not all are compatible with our current conventional glue and application technology.” Factories will have to switch to organic glues and update their machines and technology, Ikea said.

The company behind the Billy book case has a target to become climate-positive by the end of this decade. Ikea plans to reduce more emissions than it emits. Since 2016, Ikea reduced its emissions of carbon dioxide equivalents by 12%, including by 5% last year, per the report.

Ikea is No. 3 in the Europe Database, Digital Commerce 360’s rankings of the largest online retailers in the region.

Sustainability changes will impact the whole company

Ikea says it will address emissions across its supply chain and operations, from factories to transport. Plans will also target the impact of its roughly 460 stores. The company plans to increase the share of renewable energy in its supply chain, targeting 100% renewable energy in its production by the end of the decade. In 2022, production ran on 50% renewables.

Ikea’s energy goal includes helping suppliers finance solar panels and boilers at factories. The program, launched in 2021, first focused on supporting suppliers in China, India and Poland, where coal use is among the highest. It will now expand to countries including Germany, Italy, Portugal, Romania, Turkey and Vietnam.

“One of the biggest drivers behind our reduced emissions has been the movement toward more renewable energy,” said Andreas Rangel Ahrens, head of climate at Inter Ikea Group, the brand’s global franchiser.

In 2018, Ikea laid out ambitions to use only renewable and recycled materials in its products by 2030. However, emissions from materials grew about 11% in the past six years. Rangel Ahrens said the gain was because of an increase in produced volumes.

H&M will give used clothing a second life

H&M is expanding into the business of textile-sorting as it forms a venture to deal with waste in the fashion industry.

The Swedish retailer created a joint venture with recycling company Remondis. The business, called Looper Textile Co, will extend the life of about 40 million garments in 2023. Looper Textile collects used and unwanted clothing and resells them to secondhand fashion companies and the recycling industry.

H&M is No. 11 in the Europe Database, Digital Commerce 360’s ranking.

“What we are doing is taking unsorted waste and transforming it into something usable,” Looper Textile CEO Emily Bolon said in a phone interview.

The fashion industry is under pressure to be more green

Looper Textile will collect garments from municipal containers across Europe and from H&M’s  in-store collection program. The company estimates that 60% of collected items are usable for resale. Those items go to European online platforms, off-price secondhand chains in eastern Europe or importers in Africa. A third of clothes are sent to recycling plants, where they can work as car insulation or sofa stuffing. The process is known in the sector as “downcycling.”

Garments unfit for reuse or recycling account for 5% of all collections, and the company will burn them at power plants, Bolon said.

Human workers will do most sorting, although the company will also use some automated technology.

H&M’s move comes as pressure mounts on an industry that produces 100 billion apparel items each year, about 14 garments for every person on Earth. Only about a third of unwanted clothes are collected, according to consulting firm McKinsey & Co. The industry recycles less than 1% of that into new fashion, according to the Ellen MacArthur Foundation, a UK nonprofit.

Europe Database

Leading 500 online retailers headquartered in Europe. Access includes up to 5 years of web sales, company information, website traffic and features, technology vendor information and more. Web sales range from $20.5 million to over $22.4 billion annually.

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COVID-19 factored less into supply chain issues for most online retailers this year than in 2021. Instead, the war in Ukraine led to inflated prices for fuel, affecting shipping costs. United States retailers also had inventory surpluses that they struggled to sell off, as many consumers worried about a looming recession.

Online retailers joined or created their own marketplaces in 2022 in addition to selling on their own ecommerce websites. In doing so, they navigated how to manage their products across different ecommerce sites. E-retailers also changed their approaches to digital marketing this year to collect first-party data rather than relying on third-party tracking cookies.

Digital Commerce 360 editors have been interviewing online retailers and analyzing data trends in 2022 to cover all these subjects and more. Here are our favorite stories in 2022.

Industry news analysis:

2022 kicks off with a flurry of mergers and acquisitions 

1-800-Flowers.com, Evo, Club Champion, Worldwise and Thrasio each make an acquisition to build international expertise and add new ecommerce options.

Six ways to maximize the value of an Amazon brand in a tough market 

Buyers specializing in small brands that sell on Amazon raised $15 billion in recent years and purchased hundreds of companies, driving up the value of these businesses dramatically. Demand has cooled in 2022, but Amazon brand owners can still walk away with millions of dollars if they meet the requirements of increasingly picky buyers.

Keeping Score: Is inflation lower online than offline? 

There is some reason to believe it has been in the past year, with overall retail prices rising faster than online prices in 10 of 14 categories. If true, it could give online retailers a way of appealing to value-conscious shoppers.

How Black History Month inspired retailers’ February marketing campaigns 

More than a quarter of the top 100 online retailers mentioned Black History Month on their ecommerce sites while one in five spotlighted Black-owned or -founded brands, Digital Commerce 360 research shows.

Customer experience:

The Shopper Speaks: Is retail crime another reason to shop online? 

Post-COVID-19, both empty storefronts and retail crime can be seen as deterrents to shopping in physical stores. Digital Commerce 360 explored the sentiments of shoppers and found little impact regarding online shopping.

How online retailers cater to their young, mobile shoppers 

Younger shoppers are on their phones, and want to check out fast, with their preferred payment provider on site a or app designed for their small screens. MVMT, Azazie and True Religion share how they fine tune their mobile shopping experience for young shoppers.

OMG: Another Amazon sale? 

As Amazon rolls out its Early Access sale months after Prime Day, consumers wonder how many sales retailers can offer around the holidays.

How Bed Bath & Beyond’s rewards program stacks up against other retailers’ paid memberships 

Although all offer free shipping and discounts, Amazon Prime and Walmart+ have far more traction than Bed Bath & Beyond’s loyalty programs membership. More than a quarter of Top 1000 online retailers offer free loyalty programs while less than one in 10 have paid memberships.

Digital marketing:

What to do when Google won’t take ads for your products 

That’s the problem e-bike retailers face now that Google has strengthened enforcement of a rule that bars ads for virtually all electric bikes sold in the U.S. Retailers can risk Google suspending their account, advertise on other channels or find work-arounds to a policy the e-bike industry finds puzzling.

The cord cutters: Retailers move to appeal to consumers on streaming devices 

As consumers cut the cord and stream entertainment, retailers are taking advantage of lower costs to reach an ever-expanding audience through CTV.

Beyond the buzz: TikTok’s trajectory prompts retailers to reassess how it reaches younger consumers 

TikTok gains eight new users every second. However, ad spend share allocated to TikTok grows at a much slower rate — but that is changing. To reach younger consumers, digital marketers need to assess whether to proactively invest in TikTok while costs are low or risk rushing to catch up as more retailers look toward the future on a platform with 1 billion global active users each month.

Increased digital marketing regulations create clever tactics 

Cannabis regulations created a prime opportunity for resourceful, privacy-compliant data collection and application.

Omnichannel shopping:

Stores aren’t going away, but their role keeps evolving 

Retail chains and born-on-the-web brands find their way to adopting an omnichannel business model.

Smaller store-based omnichannel retailers prep for holiday season 

Brick-and-mortar stores take advantage of both their physical locations and online sales to meet customers on whichever channel they prefer.

Payments and fraud:

Buy-now-pay-later options catch on with online retailers and shoppers 

The installment payment option is here to stay, but consumers want choices. Retailers are seeing increases in average order value, conversion rates and sales when they offer their customers’ preferred buy now, pay later system as a payment option at checkout.

Apple debuts a deferred payment service and iPhone updates to developers 

The new payment feature, called Apple Pay Later, is a highly anticipated addition to the Wallet app. It is part of an expansion into the financial world that also includes bringing more infrastructure in-house.

Inside the battle against ecommerce fraud 

Ecommerce fraud has gotten hard to detect and stop. More than half of fraud attempts against ecommerce retailers are now deemed “sophisticated,” meaning professional criminals used state-of-the-art methods aimed at circumventing anti-fraud systems.

Retail response to war in Ukraine:

Russian ecommerce slows in wake of invasion, as retail industry looks to help Ukraine 

Digital sales in Russia have dropped dramatically in the wake of global sanctions, and Wall Street is warning of tough times ahead for Putin’s Russia. Meanwhile, ecommerce merchants are raising money for besieged Ukraine.

Toy retailers respond to Ukraine war; LEGO becomes a symbol of resistance 

A poster of a lego block painted in blue and yellow, a child singing “Let it Go,” boycotts by PLAYMOBIL and others are playing a role in fundraising for Ukraine and boosting morale in the wake of Russia’s invasion.

Retailer spotlights:

Patagonia demonstrates how digitization helps both the environment and the bottom line 

Patagonia reduced landfill waste by 170,000 pounds over the course of a single season just by changing its garment paper hang tag process. The retailer urges other retailers to use technology to reduce single-use materials.

Perry Ellis launches buy online, pick up anywhere 

The apparel merchant is allowing shoppers to pick up their online orders at third-party physical locations, such as Walgreens, Dollar General and FedEx. The rollout is part of a larger omnichannel and delivery push. Perry Ellis plans to launch buy online, pick up in store and same-day delivery before the holidays. 

Furniture retailer Floyd launches resale program for returns 

Floyd’s Full Cycle program allows shoppers to purchase returned or imperfect products for a discount. 25% of Full Cycle shoppers come back and purchase a full-price Floyd product.

A shift to fundraising guides communication approach for Double Good 

The COVID-19 pandemic accelerated the company’s transformation from a popcorn retailer to a virtual fundraising company. Now, most of its revenue comes from its virtual fundraising, said Anton German, chief technology officer and chief product officer.

Selling on marketplaces:

Managing products across multiple marketplaces isn’t easy, merchants say 

Given the various approaches that marketplaces take to product pages, sellers must dedicate resources to managing SKUs and listings across multiple marketplaces.

Macy’s officially launches its marketplace

Macy’s joins a growing list of top retailers that operate a marketplace alongside their ecommerce site. The retailer says its online marketplace will boost their product assortment, add incremental revenue at a ‘low incremental cost.’

Marketing on Amazon is all about keywords and presentation

Retailers find different ways to stand out among competitors when selling on marketplaces.

There is more than one way to manage customer data 

In an increasingly competitive ecommerce landscape, DTC retailers are figuring out how to reach new customers by linking up with larger merchants like Walmart or selling on marketplaces like Amazon — without losing too much control. The key is to take a step back and assess before diving into new ventures or technologies.

Supply chains, sustainability and fulfillment:

The costs and rewards of sustainable fulfillment 

Customers are increasingly aware of how their shopping habits affect the environment — and they’re holding retailers accountable. Online retailers including Taylor Stitch, Carter’s, REN Clean Skincare and Sabai Furniture give examples of how they implemented changes to consider sustainability by cutting back on what ends up in landfills, while maintaining profitability.

Making a 3PL relationship work 

Retailers seeking to outsource their fulfillment operations must understand their own needs and carefully select a firm they can trust to meet them.

US retailers unload a glut of slow-moving inventory in Q2 

Discounting hurt online retailers’ bottom lines and caused many to scale back their sales and earnings projections for the rest of 2022.

Rethinking resale as a giftable option 

Consumers are increasingly more comfortable buying secondhand merchandise for themselves. When it comes to gift giving, however, shoppers are reluctant to give used products as gifts — for now. That’s beginning to change as young shoppers are embracing resale as a giftable option for the holidays.

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Beth Ward

As a result, companies suffered major disruptions, including staffing shortages, congested ports, and rising costs of nearly every type of material. There is also increased pressure from consumers and local governments alike to be more eco-friendly.

With all of the major challenges, we also saw new methods of supply chain management emerge over the course of 2022. Now that we’re at the end of the year, let’s take a look at some of the trends that developed, what was successful, and what to expect for 2023.

Global supply chain challenges

There have been several major challenges that tested the global supply chain over the last year. Let’s look at how inflation and the looming recession has changed the industry.

1. Inflation affects supplies, services

Inflation has driven the cost of everything sky-high. From supplies to services, everything is more expensive. About 71% of global companies stated the cost of raw material as their number one supply chain threat going into 2023. Not only does this affect service providers’ bottom lines, but it also drives prices up for consumers. In 2022, consumer prices experienced the largest 12-month increase in the last 40 years, increasing 9.1% over the last year alone.

Inflation is directly linked to two other major supply chain disruptions. Global tensions over goods have erupted all around the world this year. The Russian invasion of Ukraine caused roughly 7 million people to flee Ukraine, creating a massive humanitarian crisis. Several global superpowers placed sanctions on Russia for this move, which drove up the cost of essential goods such as food, oil, and gas.

2. COVID-19

Another massive world-changing event that shook supply chains around the globe is the COVID pandemic. The pandemic also contributed to inflation, but it had some unforeseen effects that we’re still grappling with today such as the labor shortage, factory closures and border restrictions.

The pandemic also permanently changed consumer behavior. People shifted to ecommerce to fulfill their essential needs. About 68% of consumers said they will continue to buy essential products online, creating a new challenge for traditional, physical stores, as well as greater pressure on the supply chain to deliver those goods.

Most notably for the supply chain, the queues at ports have been a massive challenge that we have yet to solve. Lines of hundreds of cargo ships long formed off the coast of some of the biggest ports in the world. It took months to process this backlog and wait times at ports remain high. Over the course of this year, ships have been stalled for an average of seven days, which is up 20% from the start of the pandemic.

These problems are, of course, interconnected. The pandemic caused the labor shortage, which then caused the backup at ports, and eventually caused prices to increase to make up for lost time. Let’s take a look at some of the ways companies have been trying to tackle these massive challenges they faced over the last year.

How sellers face economic challenges

The challenges that the supply chain experienced over the past year has forced companies to make drastic changes to keep up. Technology is improving constantly and new tools are coming on the market that can significantly help companies to overcome these challenges.

In particular, automation technology has really helped to keep the supply chains afloat over the last year. The labor shortage caused factories, warehouses, and transportation to be understaffed, which slowed production. To compensate for the lack of manpower, companies have turned to artificial intelligence and other digital tools to fill the gaps.

1. Digital twins replicate real-world changes to simulate effects

In particular, digital twins have become a popular tool for warehouses and factories to test staffing changes and new technology. A digital twin creates a virtual, real-time representation of a process or environment by using sensors, data, and IoT connectivity. Digital twins can replicate changes to the environment and simulate the effects of those changes without having to deal with the repercussions in the real environment. Digital twins can also help ease the effects of the staffing shortages and can even increase warehouse efficiency by 25%.

Automation and the use of digital twins will also help to increase visibility into production. Visibility is key to sustaining an efficient and profitable supply chain. Luckily, there are plenty of ways companies can increase visibility such as utilizing blockchain for greater security. Prioritizing data management and real-time analytics has proven to increase end-to-end visibility in the supply chain.

2. Risk management

Risk management has also become a topic of conversation among supply chain managers. Because there were so many unforeseen challenges over the last year or two, companies are now thinking on the preventative side for how to tackle these challenges. Again, visibility is key in having a solid risk management plan — including contingency plans for possible disruptions — since so many of these issues were unpredictable and cost companies hundreds of millions of dollars.

Prioritizing risk management and automation is expected to continue into 2023. This will be seen in increased investment in automation technologies like AI and digital twins.

3. Sellers shift to circular supply chain models

One new trend we expect to see next year is a shift from the linear supply chain model to a circular one. This is in large part due to the increased awareness and pressure from regulatory agencies to be environmentally friendly.

Currently, many supply chains use a linear model. That means they bring in materials that are then processed through the supply chain to its final destination, where excess materials and waste are put into landfills. With a circular model, companies repurpose and reuse excess materials and waste in the manufacturing phase of the supply chain, minimizing waste. Not only will shifting to a circular model be better for the environment; it will also be better for your bottom line. That’s because repurposing materials will cut spending costs on raw materials.

4. Emission reduction improves supply chain processes

There are also some trends that will help toward cutting down on emissions throughout the entire supply chain process. Eco-friendly warehouses are popping up all over the world. These warehouses have advanced energy management systems that use gauges and timers to monitor energy use throughout the facility. In the United States, the highest amount of greenhouse gas emissions come from electricity and transportation, so shifting to eco-friendly warehousing could significantly impact the domestic environmental footprint.

One other trend we expect to see regarding eco-friendliness: Big companies will begin to partner with local suppliers. This will cut down on transportation costs. It will also create a symbiotic partnership between big companies and local businesses, ultimately helping to fuel local economies.

Conclusion

As someone in the supply chain industry, I know just how daunting it can be to incorporate many of these changes into your company. But the events we’ve experienced over the last year were unprecedented and had catastrophic effects all over the globe. And who knows what challenges lie ahead? It’s better to be prepared and as automated as possible. That way, when another major challenge strikes, we can keep our businesses running.

Beth Ward is the chief operations officer of Smart Warehousing.

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