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“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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American Signature’s current supply chain technology is powerful, as it integrates with the warehouse, delivery and warranty systems, Kiggin said. But, it is outdated and a barrier to growth, customer satisfaction and recruiting top talent to work with the technology, Kiggin told Digital Commerce 360 at Manhattan Associates Inc. Momentum 2023 conference in Phoenix last week.

Inventory accuracy and working with old technology

“Some of the major pain points were inventory integrity and knowing where it was and if it was real,” Kiggin said.

For example, if a shopper wants to order a couch, the associate could look up the inventory level of that couch on his iPad or on the checkout desktop terminal. Often, those inventory numbers didn’t match. These numbers also likely didn’t match the online inventory system.

American Signature always gives shoppers an estimated delivery date for their product. But because it lacked an accurate inventory count, it only met that promise 60% of the time, Kiggin said.

Inventory integrity is important with the furniture category, as the majority of sales for bulky pieces are made in store and delivered to the shopper’s home. Few shoppers buy in store and leave with the product. Kiggin said about 7% of its sales are online, a number it wants to grow.

Kim Huebner, director, store operations said the current supply chain technology is an AS/400 system from the 1980s. She described it as looking like a DOS screen, with function keys and green type, and no graphical interface.

“We were very clear on where we were. That was not the hard piece. The harder piece was defining where we wanted to go and how to get there,” Kiggin said.

American Signature selected and began working on upgrading its system with six of Manhattan Associates’ applications in January 2022. They were: Warehouse management, order management, point of sale, customer engagement, customer service and customer service index reporting suite.

The retailer is currently testing the warehouse management and order management platforms, scheduled to go live in early June. The merchant will test and implement the remaining four applications for the rest of the year and with a go-live date of 2024, Huebner said.

Implementing warehouse management and order management

Of American Signature’s four distribution centers, one of them is currently testing the new Manhattan technology alongside its current technology to ensure everything is functioning correctly. So far, so good, Huebner said.

Training its warehouse employees on the new system only took three hours, and the employees were happy to have a better system, Huebner said. American Signature decided to train employees with bite-sized short videos, instead of long handouts to read. It took about a week, or roughly 40 hours, to train its middle group of above entry entry-level employees. It took roughly 40 hours to train its warehouse leaders on the new system.

American Signature will measure the success of these systems by how much its labor management standards at the distribution center are maintained or improved, she said. These metrics include speed of picking, speed of processing and speed of loading.

“Time is money,” Kiggin said.

With the improved system, the goal for American Signature is to meet its delivery promise at least 85% of the time, Huebner said. While 100% is really the goal, the retailer factors in changes that a customer makes after purchase, such as changing a design element on a custom-made piece of furniture or choosing to switch the delivery date because of their own personal circumstances.

Getting buy-in from employees on the new system

As a family-owned company, Kiggin said it was important to American Signature’s management to incorporate many employees in the overhaul process. This included the end-users of the product.

For all of its new systems, American Signature is pulling employees out of their day jobs to put them on the project. This helps ensure that employees using the software can make it the most functional for their jobs, Huebner said. This also helps with buy-in when the systems go live and some employees might be resistant to change.

American Signature gives continual updates to warehouse managers not directly involved in the project. They can still voice their opinions, Huebner said.

Kiggin would not reveal the overall cost but says it is “way over” $1 million.

“It’s a significant investment. And it’s worth every penny,” Kiggin said.

Kiggin described it as a long-term investment, as the Manhattan technology will continue to update and improve alongside the American Signature business.

American Signature is the parent company of Value City Furniture and ranks No. 592 in the 2023 Digital Commerce 360 Top 1000.

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Denise Vivas, vice president of ecommerce, Essity Professional Hygiene

As the vice president of ecommerce at Essity Professional Hygiene, a global hygiene and health products manufacturer, Denise Vivas plays a critical role in Essity’s focus on growth through digital commerce. Here she addresses how Essity is engaging a new generation of online buyers of such products as Essity’s Tork brand line of workplace cleaners, dispensers, and related products.

Vivas is a panelist on the “Ecommerce Business Strategy: Creating a Blueprint for Digital Commerce Excellence” session June 21 at 2023’s EnvisionB2B Conference & Exhibition in Chicago.

DC 360: What is driving B2B companies like Essity Professional Hygiene to expand online?

Vivas: At Essity, our “North Star” is to deliver superb customer experiences in everything we do. We are always thinking ahead and always researching to ensure we provide the best service to our customers where they are. And where they are is online. In fact, research shows that close to 70% of our customers are millennials, and for them digital is the norm, not the exception.

Our digital transformation efforts are directed toward executing a customer-centric strategy across every inch of our business — from the way we manufacture products all the way to reaching and engaging current customers and seeking new business and profit opportunities. Digital is how we can bring Tork products and solutions to customers with speed and convenience.

Our online services seek to accomplish three important objectives at Essity:

• Build brand equity and trust.
• Defend our share as end customers shift from offline to online practices.
• Drive growth by unlocking new buckets of opportunities.

DC 360: What are your biggest internal and external barriers?

Vivas: There’s no greater satisfaction than when Essity and our partners — distributors, wholesalers, service providers and such — find we are on this digitalization path together. When our visions align, we are able to amplify and accelerate growth and customer satisfaction.

But in reality, resistance to change continues to be a barrier to that forward trajectory. Legacy systems and lack of resources can all weigh down and slow down progress. We strive to be leaders and help our partners embark on the digitalization journey with us.

Think about buying a car 15 years ago versus buying a car now. The transformation of how a car operates, all its safety features, and even how you can now purchase a car online, is mind-boggling. But people still operate the vehicles and must be willing to accept this new technology and drive that car off the lot. That is what we hope to continue to do with our partners — to show them how much faster, safer and more efficient we can be when we are firing on all cylinders together.

DC 360: What are the chief gains you’re realizing?

Vivas: Our online business — both through distribution partners and direct — is growing faster and more profitably than any other channel. And what we have learned along the way is that we can not only understand and acknowledge our customers’ needs but also help address and solve them.

Back to that Essity North Star, we are committed to strengthening our distributor partnerships, which includes the work we do to support their online business. How can we do that? Our approach involves developing ecommerce, digital marketing activation, and digital selling capabilities that we extend to our distributor partners as value-add services. These services complement the great work we do offline. As we master the art of supplementing online levers with offline ones, we advance further toward our destination, which is to differentiate Essity as a leader in omnichannel partnerships.

DC 360: What is the most valuable piece of advice you have on how to launch online B2B sales or increase them?

Vivas: As basic as this sounds — and it can’t be stressed enough — understand your customers’ pain points and devote the time and resources to solving them. And do it better and faster than anyone else. This is how you build brand equity and trust, and it’s how we reach our North Star and the growth that naturally follows.

I would also add: Be bold. The cost of technology continues to go down. Going back to my car analogy, think about the cost of cars today with all that technology now included even in base models. Take advantage of these lowered costs and start small. Pilot a service where you can prove to scale or dump quickly. But don’t be afraid to fail! Just fail fast and move forward.

DC 360: Regarding COVID-19 and supply-chain disruption, what is the biggest adaptation your company has made?

Vivas: We quickly and efficiently implemented highly responsive networks that stabilized our value-creation chain end to end. This was a collaboration across our organization. We even set up remotely to avoid face-to-face interaction during the “lockdown” period.

Some examples include:

• Streamlining our portfolio in order to boost output.
• Deliberately increasing target inventories of articles with a more complex supply chain (such as dispensers).
• Creating task forces to identify alternative suppliers.
• Developing an employee-retention program to create stability within our operations.
• Developing and sharing a successful health and hygiene website that educates our customers on how to avoid infection at the workplace. This site was recognized by experts and adopted by unions.

DC 360: Looking back over the past few years, is there anything you wish you had done differently in ecommerce?

Vivas: As we have seen with technology advancements, things move quickly. And at Essity, we have worked hard to keep up with and ahead of those advances. But what we’ve learned is that success in ecommerce is 10% technology and 90% an effective operating model.

In other words, success truly depends on an organization’s ability to effectively manage change. To do that, you must engage your people so that they trust the process. Invest as much time and as many resources as necessary to get employees involved right from the planning and development phase. As our approaches changed, having everyone on board helped them remain aligned and agile.

DC 360: What excites you the most in new digital commerce technology?

Vivas: While artificial intelligence is just emerging, and we must proceed with caution, I am excited about the potential AI has to power predictive personalization engines. This will allow us to truly connect with customers in a very intimate way, at scale and with immediacy.

To achieve this, we are actively working on the next wave of digital capabilities. We hope to further simplify the way we do business while still delivering exceptional customer service, driving us right toward our North StB2ar and ultimately translating into rapid, profitable growth for Essity Professional Hygiene and our partners and customers.

DC 360: Going forward, what do you see as the most significant commerce challenges and opportunities?

Vivas:  Our biggest opportunities lie in the ability to deliver value to our customers with simplicity and speed. And in the B2B world, how that  comes across is all in the eye of the beholder. In other words, digitally savvy customers have much different needs for simplicity and speed than do more traditional customers. But we must make the process seamless for both. The key is to be effective at servicing a wide range of customers, offering our digital tools to those ready to utilize them, and bringing customers with us as we maneuver this digital highway together.

Finally, I will say that as fast as technology moves, we must always pause to be sure our internet and customer information-management systems are secure. This is a trust we never want to breach.

Jim Daly is a Digital Commerce 360 contributing editor covering B2B digital commerce technology and strategy.

Sign up for a complimentary subscription to Digital Commerce 360 B2B News, published 4x/week, covering technology and business trends in the growing B2B ecommerce industry. Contact editor Paul Demery at paul@digitalcommerce360.com and follow him on Twitter @pdemery.

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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.

“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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Cleancult sells nontoxic cleaning products, such as soap and laundry detergent, in a cardboard carton. Shoppers then transfer the product into a glass bottle, which the brand also sells. Cleancult’s mission is to reduce plastic consumption, and it has 15 patents on the machines it uses to create its cartons.

Cleancult is not the first brand to tackle reducing plastic packaging in the cleaning industry, as other brand manufacturers sell cleaning products in 1-ounce concentrated glass bottles or sell products in powder form. This appeals to eco-conscience shoppers, but many consumers are not ready for this step, Lupberger says. While concentrated products are lighter, require less packaging and are more sustainable to ship than traditional products, it requires effort for customers at home to create the final product, which is a barrier, Lupberger says. Although Cleancult customers need to purchase a glass bottle in addition to its cleaning products, Lupberger says this is not a barrier to purchase.

Cleancult’s products are packaged and shipped without plastic.

“We want to go after the 99%,” Lupberger says. “We have to meet them where they are with ready-to-use formulas and ready-to-use bottles.”

“How do we change the category, but not change consumer behavior?” he adds about its goal to make choosing its plastic-free products easy for shoppers.

Cleancult.com launches and then pivots to physical retail

Cleancult launched in 2019 with its direct-to-consumer website Cleancult.com.

“I really hoped D2C would work long term,” Lupberger says.

But things quickly changed. As online sales skyrocketed during the pandemic — especially for cleaning products — so did costs. Digital marketing costs to acquire customers and shipping carriers raising their rates were the largest increases, he says. Digital marketing costs increased roughly 50% from 2019 to 2021, Cleancut says. Plus, what once cost the brand $6-$7 to ship now costs it $17-$18.

Plus, post-pandemic, many consumers resumed their normal shopping habits, including buying their cleaning products in stores. And so, Cleancult shifted priorities to get its products in more physical stores instead of working to acquire digital customers. In 2021, Cleancult debuted in a handful of regional grocers. In 2022, it expanded to Walgreens, CVS, and Bed Bath & Beyond, and this year is Cleancult’s Walmart debut. Cleancult also sells on the Walmart and Amazon.com Inc. marketplaces.

Amazon is No. 1 in the 2022 Digital Commerce 360 Top 1000 database. The Top 1000 ranks North American web merchants by sales. Walmart is No. 2. Amazon is No. 3 in the Digital Commerce 360 Online Marketplaces database, which ranks the 100 largest global marketplaces. Walmart is No. 9.

Ryan Lupberger, co-founder and CEO of Cleancult.

“A lot of categories shouldn’t live online,” Lupberger says. “Fundamentally, the cost of shipping big, bulky, low-price items, doesn’t work very well.”

Subsequently, its sales shifted from 100% via its direct-to-consumer website, to 90% its own website in 2020, 70% in 2021, 65% in 2022 to likely 20% in 2023, Lupberger says. Cleancult includes sales made on the Amazon marketplaces in its direct-to-consumer sales figures.

Even though sales are growing 50% year over year for its total business, sales are flat on Cleancut.com.

This shift in sales is fine with Lupberger, as its ecommerce site and Amazon business do not make money.

“It’s break even at best,” he says.

But its ecommerce site still serves a purpose, including building a community and testing new products and scents, he says.

“If they find us in store and believe in the Cleancult brand, join the website. But if they need a quick shipment, buy on Amazon. And if they are grocery shopping, they can pause their subscription and buy from the grocer,” Lupberger says.

Plastic-free shipping packaging

For shoppers who do buy direct from Cleancult.com, the brand works to ensure the products are shipped in the most sustainable way, such as by offsetting the carbon from the freight and by using paper instead of plastic.

“We can’t use plastic. It can’t ruin our value proposition,” Lupberger says.

Cleancult uses corrugated paper to pad its products, which is typically two to three times more expensive than a plastic polybag filler. It also pads its glass bottles with carboard beds to ensure the products are not touching anything and there is space for crushing.

The brand uses Forest Stewardship Council certified paper for its product cartons and shipping boxes. FSC is a nonprofit organization that ensures the paper is from a forest that is responsibly managed for environmental, economic and social benefits. 

Cleancult has four box sizes, and 99% of its orders arrive in one box. This means an order with multiple products is not split up into multiple shipments.

The last person who packs the box is the last quality control to ensure it is packed correctly, with none of its products touching. While this is important to its plastic-free ethos, it’s often thankless.

“[Shoppers] don’t notice it when it arrives,” Lupberger says.

But shoppers do notice when there is plastic in the shipping box by mistake. This can happen for some of its Amazon.com orders, which is shipped via Fulfilled By Amazon. Cleancult provides Amazon with its own carboard boxes to use to ship directly to shoppers. Sometimes, however, a warehouse employee may put that box inside another box with a polybag in it, or its box is added to another part of a larger order and plastic is added. Then, shoppers contact Cleancult with negative comments, even though this is outside of its control, Lupberger says. 

Cleancult is No. 1963 in the 2022 Digital Commerce 360 Next 1000.

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Ash Trasi, director, IT, web and ecommerce, Illumina Inc.

Ash Trasi is director of information technology, digital experience, for web and ecommerce at Illumina Inc., a life sciences tools manufacturer focused on sequencing- and array-based products and services for genetic and genomic analysis.

Trasi is a speaker in the “Why We Chose Headless” session on headless commerce technology June 21 at the EnvisionB2B 2023 Conference & Exhibition in Chicago.

DC 360: What is driving B2B companies like Illumina to expand online?

Trasi: Digital transformation is a key factor and a driver in our world today. Digital transformation may mean different things to different companies and leaders, but in the world of B2B businesses it means opening avenues to customers and making it easier for them to do business. To some, online expansion may mean having a website through which customers can transact, but online commerce is way beyond just a direct site to transact through.

Opportunities such as e-procurement (including punchout, hosted catalog), vendor managed inventory, or even point of sale systems are some other channels through which customers can and may even prefer to interact with us.

DC 360: What are your biggest internal and/or external barriers?

Trasi: To achieve channel adoption to a level that we want is a very hard task. Many of our customers have adopted our online channels quite organically. Some of our other customers still prefer calling in and talking to a real person in customer service or sales. It’s a shift in mindset, and to create that kind of paradigm shift our omnichannel experience has to be spot-on and geared in every way to make our customers’ job easier and create a delightful customer experience.

We are getting there.

DC 360: What are the chief gains you’re realizing?

Trasi: Mainly operational efficiency for our internal customer care and sales team. Since a lot of transactions have shifted to our online ecommerce channel, our very talented internal teams can now focus on their real jobs instead of being order-takers for our customers. Self-service is another win for us and our customers, since they can now find all their information, from orders to upcoming shipments to invoices and quotes, all online without any kind of hand-holding from our internal customer service teams.

DC 360: What is the most valuable piece of advice you have on how to launch online B2B sales or increase them? 

Trasi: Prior to even selecting and launching an online sales channel, first know your customers. It is important to understand what kind of service they would like to get from you. What are their pain points? Do they want an omnichannel experience to do business with you? These are some of the critical questions one must answer before embarking on the journey of creating any kind of a B2B online sales channel.

Also, you should know your products and offerings. Can you bring your entire product portfolio online? Or are there more opportunities to transact low-dollar, high-volume products online while keeping a more personalized, white-glove experience for high-dollar, more expensive products via your sales force. These considerations will drive what kind of online experience you will end up offering your customers.

DC 360: Regarding COVID-19 and supply chain disruption, what is the biggest adaption your company has made?

Trasi: The supply chain disruption caused during the pandemic is truly an unfortunate sequence of events that no company has control over completely. However, through our ecommerce channel we have been able to take a few measures to build customer trust by providing robust and valuable content. We provide accurate information via our “Available to Promise” capability so that customers can make quick decisions about their inventory and purchasing cadences — self-service capabilities that again build customer trust and confidence and provide them with information that helps them make smarter and better purchasing decisions.

These are just some of the capabilities that we have made available to combat the disruption caused by supply chain issues.

DC 360: Looking back over the past few years, is there anything you wish you had done differently in ecommerce?

Trasi: If there is one thing I would change, it would be going to headless commerce earlier. Although we have implemented headless commerce far ahead of 90% of the companies in our space, we struggled a lot with monolithic systems that could have been avoided by earlier adoption.

DC 360: What excites you the most about new digital commerce technology?

Trasi: The modular nature of these latest software tools that provide ecommerce capabilities is by far the best thing that digital commerce has finally adopted. Headless, RESTful application programming interfaces have been there for decades. This architectural shift from monolithic systems to modular, API-first, composable and headless constructs is very exciting now for any professional in the ecommerce space.

DC 360: Going forward, what do you see as the most significant commerce challenges and opportunities?

Trasi: Channel adoption by customers remains my No. 1 challenge to solve for. It’s not easy to bring about a mindset change in people who are used to conducting business a certain way and ask them to completely abandon their old ways and adopt new ones.

But with this challenge comes the opportunity of creating and implementing technology that delights customers, wins their confidence and trust, and provides them with content that is meaningful and actionable. Introducing artificial intelligence and machine learning in our systems is the next frontier in providing that customer experience, which will pull our customers towards digital commerce like a magnet.

That is easier said than done, but I like the challenge, so let’s go!

Ash Trasi will speak at EnvisionB2B 2023 in the session, “Why We Chose Headless Commerce,” Wednesday, June 21.

Jim Daly is a DC360 contributing editor covering digital business technology and strategy.  

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The post EnvisionB2B Speaker Spotlight: Illumina’s Ash Trasi on digital transformation appeared first on Digital Commerce 360.

Tom Funk, ecommerce director, Ann Clark Ltd.

Tom Funk, ecommerce director for cookie cutters manufacturer Ann Clark Ltd., has applied his ecommerce expertise at several online companies including Keurig Green Mountain and Vermont Teddy Bear.

Now, as the ecommerce director at a bakery supplies company, Funk is helping a manufacturer steeped in retail ecommerce experience also grow its B2B online sales. Here he shares his insights on growth strategy.

DC 360: What is driving B2B companies like Ann Clark to expand online?

Funk: We began over 30 years ago in Vermont, hand-making metal cookie cutters, selling primarily to gift stores and specialty retailers through a network of sales representatives and wholesale direct-mail catalogs. About 15 years ago, our B2C ecommerce business just took off on AnnClark.com and through Amazon. And it brought our wholesale business along for the ride. Growing nationwide brand visibility, plus our increasing proficiency with B2C digital commerce operations and logistics, website management, email marketing, all helped us grow our B2B business online.

DC 360: What are your biggest internal or and external barriers?

Funk: I bet we’re not alone in feeling our wholesale business is sometimes the poor stepchild to B2C ecommerce. It’s challenging to ensure our B2B marketing, website usability and design, and tech investments don’t lag the investments made on the B2C side.

Externally, the kitchen and home categories have been on a roller-coaster ride. Baking boomed during Covid-19 quarantines. But it was a tough time for our brick-and-mortar retail customers. Now, retail is back, but not without economic challenges like inflation and changes in consumer behavior.

DC 360: What are the chief gains you’re realizing?

Funk: Much of our recent growth comes from product line expansion. We’re the country’s biggest cookie cutter manufacturer. But some of our strongest growth comes from baking supplies and ingredients like Ann Clark food coloring, icing mix, baking parchment, piping bags and rolling pins. New products attract new wholesale customers and also give existing customers more ways to grow their business with us. We just launched large 4.5-ounce bottles of food coloring aimed at commercial bakeries, culinary programs and food-service organizations. We are superfast to market with new ideas, getting new products onto Amazon B2C and our Wholesale website in a fraction of the time it takes at other companies where I’ve worked.

DC 360: What is the most valuable piece of advice you have on how to launch online B2B sales or increase them?

Funk: Just get started and learn by doing. We leveraged B2C ecommerce strengths and applied them to B2B without overthinking the special requirements of B2B. There will always be opportunities to optimize your B2B website in future iterations with special tools like recommended assortments and quick-reorder.

DC 360: Regarding COVID-19 and supply chain disruption, what is the biggest adaptation your company has made?

Funk: Made-in-USA is Ann Clark’s superpower. It has been for 30 years. So, when COVID-19 supply chain disruptions hit, we were in a perfect position to maintain dependable supply and short lead times. We’re passionate about making everything ourselves, right here in America. Our cookie cutters are made of U.S. steel and don’t have to sail for weeks and weeks across the ocean before getting into stores. Our food coloring and other baking supplies are certified food-safe and made at our food production facility in Rutland, Vermont. It didn’t require any adaptation: We were ready in the batter’s box when that pitch came across the plate!

DC 360: Looking back over the past few years, is there anything you wish you had done differently in ecommerce?

Funk: I wish we’d realized sooner how effective and profitable our wholesale ecommerce operations could be,  compared to the B2C side of the business. There are still opportunities we’re just beginning to pursue.

DC 360: What excites you the most in new digital commerce technology?

Funk: Original content + omnichannel strategy. We’re creating a lot of original digital content — how-to videos and tutorials — and publishing it on whatever digital platforms our consumers use. Ann Clark embraces omnichannel. We have no preference or desire to control whether consumers buy from our website, or from Amazon, or from one of our wholesale customers. We want to spread the joy of baking, provide solutions and distinguish the Ann Clark brand from cheap importers that view products like cookie cutters as a commodity, and are less in tune with our baking holidays, traditions and occasions. I strongly believe that authentic, digitally-active brands like Ann Clark make the best selling partners for retailers.

DC 360: Going forward, what do you see as the most significant commerce challenges and opportunities?

Funk: One challenge is decreasing trackability of Google and Meta ad campaigns, and what a cookieless web looks like for marketers. On the flipside, I see opportunities in SMS text marketing, social commerce and influencer programs. I’m also cautiously interested in Amazon B2B as a growth opportunity.

Tom Funk will speak at EnvisionB2B 2023 in the session, “Avoiding Ecommerce Mistakes: Do What I Say and Not What I Did,” on Wednesday, June 21.

Peter Lucas is a DC360 contributing editor covering digital business technology and strategy.

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The post EnvisionB2B Speaker Spotlight: Tom Funk on growing B2B and B2C ecommerce appeared first on Digital Commerce 360.

Rafa Oliveira, president of international markets, The Kraft Heinz Co.

The Kraft Heinz Co. will start out with sales to merchants in Mexico, Colombia and Peru, followed by expansion into Ecuador, Dominican Republic, Panama and other Latin American countries in an effort to “unlock 1 million potential new points of sale across LATAM,” Kraft Heinz and BEES said in a combined press release today.

Kraft Heinz expects its business through BEES to help grow its emerging markets strategy.

Tying into AB InBev’s distribution network

Rafa Oliveira, Kraft Heinz executive vice president and president of international markets, says the big CPG company expects BEES to be a “game-changer” in its efforts to expand globally. In the press release, he notes that selling on the BEES marketplace lets Kraft Heinz benefit from AB InBev’s distribution network, “particularly in countries where we have huge potential to grow, while also allowing us to customize our approach on a market-by-market basis serving the needs of regional retailers.”

Anheuser-Busch InBev developed BEES as an online B2B platform in 2019 to let retailers order from among AB InBev’s hundreds of brands, including global beer brands Budweiser, Corona and Stella Artois and many regional and local market brands.

But BEES recently opened its online platform to let other consumer packaged goods companies list their products within the BEES marketplace. BEES says it currently operates in 20 countries, including:

• Canada
• The United Kingdom
• China
• South Korea
• Several countries in Africa and Latin America

Overall, it notes that it has 3.1 million active monthly users and has processed more than $32 billion in gross merchandise sales.

BEES drives up ecommerce share of AB InBev’s revenue

Nick Caton, chief B2B officer, BEES

AB InBev reported $57.8 billion in revenue last year. It said the digital BEES platform accounted for “approximately 63% of our revenues.”

Buyers on BEES can:

• Browse for products
• Place orders
• Earn rewards in applicable markets
• Arrange deliveries
• Manage invoices
• Access market data for supply and demand insights

Nick Caton, chief B2B officer at BEES, says adding CPG companies like Kraft Heinze to the BEES marketplace complements BEES’ commitment to “accelerating digital transformation” and helping local retailers thrive in their markets.

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