Sustainability in e-commerce is here to stay

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Online consumer demands are changing the e-commerce market in various fields.

Webshops have to constantly deal with innovations in various departments of their business to keep up with consumers’ wishes. A hot topic in this changing environment is sustainability. This is here to stay, as consumers demand more eco-friendly solutions in the production and packaging of their products in both traditional offline retail and online shopping. We meet with Omar Asali, Chairman and CEO of Ranpak, a global leader in fiber-based, sustainable protective packaging solutions, who shares his vision on sustainability in the e-commerce market.

Customers and convenience

According to Asali, today’s consumers are accustomed to quality and convenience. When shopping online, consumers expect to have a broad selection, a good price, and a great experience with retailers and e-commerce providers. Especially in more mature e-commerce markets, people who shop online have become conditioned to find items they purchase at their doorstep in a short timeframe and in good condition.
‘While e-commerce is still in its infancy in many markets, the more mature markets offer a mix of convenience and experience that people have come to expect. Once you introduce these amenities to consumers, they cannot be taken away. An extensive product selection at competitive prices and high-quality shopping experience will become the standard, both in offline and online retail. E-commerce will play a leading role in driving these high standards as well as growth for many brands. I believe that, in terms of offline and online shopping, the whole process will become more seamless and integrated. Currently, the majority of shopping is still conducted through retail stores, but going forward, a brand needs both online and offline channels. Sales will, of course, not disappear in the brick-and-mortar channel, but the shift to online sales is likely to continue at the expense of traditional retail. Brands must be prepared to offer their customer the same high-quality experience through both channels.’

A global shopping opportunity

With the continuing growth of online shopping, the ability to conduct business and shop across borders has become easier. International e-commerce shops and marketplaces are growing rapidly and becoming more popular. This is putting pressure on many supply chain networks as online businesses look for fast and efficient ways to reach their customer. Increasingly, these supply chain decisions are not only focused on speed and reliability but also now on sustainability. The focus from consumers and regulators on businesses such as e-commerce providers regarding utilising sustainable materials in their supply chains provides an opportunity for companies like Ranpak. ‘Ranpak’s global e-commerce expertise and focus on sustainability are an excellent combination,’ says Asali.

‘I truly believe that service providers are a major reason for international shops to become successful. At Ranpak, for example, we are expanding our international presence. We are active in 50 countries but still work to grow and improve our
cross-border network. By being present globally and locally, we can offer online marketplaces the services they need in terms of international fulfilment, supply chain, and environmentally friendly packaging needs. Locally, there will be different nuances to what works in which country, but being a global business with high standards gives our customers the confidence that we can fulfil their needs wherever they expand next. The companies that will be most successful will have a truly global infrastructure coupled with a strong understanding of the local flavour.’

Where opportunities arise, so do threats. E-commerce providers might be their own worst enemy, in this case, says Asali: ‘As a lot of retailers and platforms set the bar for their service levels very high, consumers have come to expect this service, in every aspect of that company.’ With that, Asali points to more than just buying a product. It just as much concerns the delivery process, the packaging and the customer service. ‘These days, stores and brands focus on providing online customers with a seamless and unique unboxing experience. Amongst others, that involves receiving a product on time, undamaged and beautifully packed. E-commerce players have set high expectations. It will be a big challenge to convince a customer that a different, lower quality delivery experience from
that shop might be acceptable in the future.’

Core DNA

In line with this, new standards for packaging are rising. Especially in the field of sustainable packaging, demands are driven higher by consumers, regulators, and employees of businesses. At Ranpak, Asali makes sustainability part of the core DNA of the company. ‘It is who we are, and it is what consumers want. That is why it is so important to be aware of the potential it has. Seeing what has happened to the growth in plastics in the past four or five decades is staggering. Our plastic consumption really hit that exponential growth curve, and a substantial amount is in the form of foam or plastic used in packaging. This cannot continue, and we need to utilise alternatives. What I liked about Ranpak from the beginning is their ambition to provide such alternatives. Looking at the packaging options, fibre-based and aluminium solutions will take market share from plastic.’

In the case of fibre-based solutions such as paper, recyclability is excellent. It is a natural product that decomposes very quickly, and it can be used for a variety of protective packaging needs. Plastic’s biggest asset, its durability, is its biggest downfall as well. ‘It has a huge life span, four or five times that of a human. That means it will be on earth for hundreds of years after its, often, single-use purpose. In my opinion, that is just too harmful,’ Asali firmly states, clarifying he believes in paper solutions. Aluminium has a significant higher recyclability rate over plastic. ‘It is the reason more and more bottlers and plastic companies switch to this more reusable material.’

Although the Ranpak CEO heavily supports the use of sustainable packaging materials instead of plastic and foam, he also states that plastic will not be eliminated. ‘That is almost impossible. However, for many plastic solutions, there are better alternatives.’

Innovate in packaging

Sustainability is more than just a fad. For a packaging solution service provider such as Ranpak, it influences the entire business and is a driving influence on innovation. It concentrates on increasing efficiencies in warehouses, on reducing the air in a box that contains an order, and on minimising the necessary materials used. ‘It is all part of a sustainable supply chain,’ confirms Asali. ‘Our motto is “Deliver a better world”. We want to do that with our whole organisation, for our customers and the final end-consumers. All of this is part of our mandate and
responsibility to take better care of our planet. Automation, for example, can help us reduce the box size even more and paper can be a solid solution in cold-chain solutions, like the temperature-controlled packaging of groceries and medicine.’

To improve on sustainability solutions, Ranpak joined a few non-profit organisations to work on this hot topic. ‘We really feel the need that a global
solution is required regarding our plastic consumption. The companies that have partnered with these nonprofit taskforces all share the same principle: a reliable solution that balances our needs, habits and the impact on the earth.’

A responsible and fulfilling attitude

In the end, Asali wants Ranpak to grow rapidly while maintaining its profitability and environmentally friendly focus. ‘As I bought the company, I am accountable to my shareholders and communities about its wellbeing. That is my top priority. However, I remember a recent conversation with my millennial daughter about what a company such as Ranpak could accomplish. Her reaction, about how great it is to build a business while creating a more ecologically sustainable future, was very fulfilling. It fills me with pride that we can do something good for the earth, something which is really in the Ranpak DNA.’

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