The Impact of Next-Day Delivery on the CPG and Corrugated Cardboard Industries

Published January 2, 2019

Consumer expectations have changed drastically in the past few years, especially when it comes to delivery services. First, USPS, and then private companies like UPS and FedEx, provided reliable home delivery for CPG and purchased items. After Amazon’s formidable rise to e-commerce power by late 1997, home deliveries increased both in speed and frequency. To outshine the competition and meet evolving consumer needs, Amazon debuted its next-day delivery service, Amazon Prime, in 2005. Thanks in part to that unique offer, Amazon now controls over 50 percent of all e-commerce trade—and that number is expected to keep rising. 

Today, more big brands are releasing their own take on same or next-day delivery services. Designed both to compete with Amazon and to capture the booming business of e-commerce shoppers, next-day delivery is prompting a significant shift in the CPG and corrugated cardboard industries. Will these changes have staying power? And if so, what do they mean for the future of packaging?

Emerging Delivery Services

As high as 90 percent of online retailers now offer next-day delivery. Among the increasing number of national brands jumping on the speedy delivery service bandwagon are household names like Walmart, Sam’s Club, Whole Foods, and Target. Requiring either a specific order minimum or a subscription, these companies are beginning to offer home delivery as quickly as within one hour after purchase. Although most companies aren’t yet offering nationwide delivery, beta-testing locations exist in many metropolitan areas throughout the United States. 

By shortening their delivery timeline to beat Amazon’s two-day Prime service, these brands hope to stay ahead of heightened consumer expectations. Offering swift delivery options or curbside pickup also provides supporting income for brick-and-mortar stores by doubling those locations as shipping hubs for e-commerce purchases. 

Utilizing next day delivery does offer some advantages over the strictly-online Amazon. Walmart, for example, has over 4,700 stores throughout the U.S. Shipping e-commerce purchases from those locations—rather than from Amazon’s regional hubs—helps to keep both shipping costs and delivery time to a minimum. 

The Impact of Next-Day Delivery

As consumers rely more heavily on the direct delivery of products, brands are becoming more efficient at meeting these expectations. However, the increasing use of next-day or faster delivery options brings its own set of complications—for both manufacturers and consumers. Understanding these challenges and how CPG and corrugated cardboard providers should adapt as a result, is crucial to success.

New Consumer Expectations

Thanks to the ease provided by Amazon Prime, many consumers expect all e-commerce products—even those ordered through alternate providers—to ship promptly, track effectively, and deliver quickly. Although most customers are willing to wait a few extra days for the right product or particular order, independent brands and small businesses can struggle to keep up with the high demands. 

If expected shipping timelines can’t be met, consumers are more likely to return to sources like Amazon for their purchases. To combat this, CPG brands should rethink their product delivery funnels to prioritize consumer convenience. If you can’t offer next-day shipping, what other unique value can you bring?

Higher Environmental Impact

While online shopping is both convenient and fast, its impact on the environment leaves much to be desired. Research shows that retail and e-commerce transportation is the current leading contributor to carbon emissions. Fast shipping of an increased product range also compromises sustainability efforts. While traditional shopping allows multiple items to be packed in the same box or bag, the ease of online shopping encourages consumers to buy things in smaller quantities, and individual purchases require their own boxes. To adapt, CPG brands should continuously monitor their consumer base and its purchasing habits to see where consolidation and conservation efforts can be maximized.

Increased Demand for Corrugate

Shipping products requires corrugated boxes and filler materials. As online shopping and next-day deliveries increase, more cartons are needed to transport these orders. As the corrugated market continues to see increased demand, CPG brands must be prepared. Make sure your product packaging and transportation processes are streamlined to help keep costs low. This allows you to funnel more resources to other parts of your budget, like increasing inventory to meet more orders, or creating better shipping services to cut down on transit time.

Get More, Waste Less With INSITE

Next-day delivery continues to raise consumer expectations, create a more damaging environmental footprint, and demand more from CPG manufacturers and product marketers. To combat these increases—and still see a return on your investment—it’s vital to work smarter. Part of this strategy involves partnering with the right packaging automation partner

INSITE’s thoughtfully-designed case erectors and case sealers are designed to provide exceptional standardized packaging equipment while minimizing waste and operator risk. If you aren’t sure that your current packaging partner is prepared to help you capitalize on the opportunities next-day delivery provides, contact us today.

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