US E-Commerce Ready Packaging

US E-Commerce Ready Packaging

E-commerce continues to have a profound impact on the packaging industry as companies adapt to the rapid shift from traditional retail models focused on brick-and-mortar stores and centralized distribution to one that includes online shopping and delivery direct to customer’s front doors. This shift toward home delivery is leading to significant changes in operations, infrastructure, and logistics at companies throughout the supply chain.

Retail e-commerce sales of merchandise are forecast to grow 8.9% per year to $1.4 trillion in 2028. This represents a slowdown from the high levels seen during the pandemic, but it is still well above growth in overall retail sales and most sectors of the US economy. However, the continued expansion of home delivery is having opposing impacts on the packaging industry and the types and amount of packaging used.

Sustainability Concerns Proliferate as Environmental Impact of E-Commerce Widens

The continuing robust growth of e-commerce has raised concerns about its environmental impact, particularly regarding carbon emissions from transportation and the large amount of packaging waste generated. Consumer product manufacturers, retailers, and parcel shipping companies are all looking for more sustainable practices that optimize packing and delivery, reduce the amount of shipping materials used, and include the development new eco-friendly and delivery-compatible options.

Demand for traditional e-commerce related packaging – primarily shipping boxes, mailers and associated protective packaging materials – is forecast to grow 6.4% per year to $8.5 billion in 2028, lagging growth in e-commerce sales due to continued efforts to reduce the use of excess shipping materials.

Ships in Own Container (SIOC or SIPP) Driven by Environmental Concerns & Cost Savings

E-commerce ready packaging is a new movement in the packaging industry focused on addressing the sustainability and cost issues associated with growth in direct-to-consumer shipping. These new programs focus on two key areas of development:

• Ships in Own Container (SIOC) packaging
• improving sustainability, efficiency, cost, and supply chain optimizations

Demand for e-commerce ready packaging is being driven by leading global e-commerce giants such as Amazon and Alibaba, who are using their influence to push suppliers to meet their standards.

The shipment of SIOC packages will continue to see double-digit growth over the next decade, reaching 6 billion units in 2028. While a small share of packages have historically been shipped in their own packaging, efforts to reduce packaging waste and improve profitability will continue to drive this shift away from traditional shipping materials.

This Freedonia industry study analyzes the e-commerce ready packaging industry and presents historical demand data for e-commerce packaging and e-commerce merchandise sales (2013, 2018, and 2023) and forecasts (2028 and 2033) by product type (boxes & mailers, protective packaging, and other) and market (computers, electronics & appliances; apparel & accessories; home furnishings; food & beverages; toys, games & sporting goods; health & beauty; and other). Annual historical data and forecasts for markets are also provided from 2013 to 2028. Data are given in dollar value.