Amazon has recently announced a new, innovative program called the “Amazon Incentive Program”. Basically, this program is geared towards certified Frustration-Free Packaging (FFP) on certain products sold by Amazon.
This news has been met with positive responses by packaging pundits and analysts.
Here are some quotes by experts in the field regarding the Amazon Incentive Program:
Brian Wagner, co-founder and principal, PTIS LLC: “We have worked with clients to develop holistic ecommerce and omni-channel packaging strategies. This fast-growing channel is driving and will drive packaging, automation and supply chain innovation, to cut waste and improve margins for all across the entire value chain. We also provide consulting advice, design and opportunities for Amazon FFP and SIOC [Ships in Own Container].
Some thoughts on the new incentive program:
- Consumers will love it and should help to centralize waste for collection, so that is good.
- Amazon’s timing seems a bit aggressive, so we assume it will be phased in.
- Directives like the Walmart Scorecard and item level RFID [radio frequency identification] set a bad precedence, and didn’t work. However, mandating concentrated liquid laundry detergent made a truly positive impact. Amazon’s directive is consumer and cost driven.
- This will likely be the ‘kickstart’ that many companies needed to truly design packaging for the ecommerce channel. Many have been using the exact same package format they use in retail and simply let Amazon rebox the product.
- This could really have a dramatic change on package design—elimination of windows and cut outs, for example. Do you put the nice graphics on the inside of the box instead to delight the consumer upon opening?
- This could have a dramatic effect on Amazon’s shipping costs—no longer shipping a box in another box.
- There will be lots of pressure to get certified FFP based on the timing—labs will be busy!
- Timing could be tough—many packages have been designed for retail, but not the rigors of single-unit direct-to-consumer shipping. Impacts could be pretty large based on which categories are selected by Amazon.
- This is just the start. I can see this (Amazon’s ecommerce pack) becoming a standard package format in every company’s product portfolio as Amazon expands this to other categories. If you’re not impacted today, I’d take the time to start thinking about how you would achieve FFP certification and protect your product for direct-to-consumer shipping (which is likely for products and SKUs [stock-keeping units] over a certain size).
- Packages that are easier for consumers will generate positive reviews, and will ultimately lead to more package recycling.
- Be sure to use How2Recycle labeling to communicate to the consumer!”
Matt Dingee, co-founder and COO OnPoint2020: “The Amazon news is a big step and I think will be a pivotal moment for brands and packaging in ecommerce. Although it has flashbacks to Walmart, I think it will have a more powerful outcome for two reasons.
First, the mindset will change for brands to truly meet FFP compliance. Brands that take this to heart will necessarily engage experts and packaging ideas from all over to meet the Amazon guidelines. During this process, brands will discover that there are many sustainability and business benefits beyond compliance. As a result, brand mindset toward packaging design for ecommerce (Amazon) will be elevated.
Second, FFP is primarily of direct benefit to the consumer. So the outcome is not actually serving Amazon or some subjective metric, but the consumer directly. The brand now has an opportunity to improve packaging and product design for a customer ecommerce experience!”
David Luttenberger, global packaging director, Mintel: “You drew a parallel between WalMart’s Scorecard and Amazon’s FFP certification program. I believe what Amazon is doing is very different and is being received by vendors in a totally positive light. Amazon is incentivizing CPG [consumer packaged goods] vendors and training them to create more environmentally responsible packaging, which in and of itself will save them money and create supply chain efficiencies. At the same time, it’s enabling them to retain proprietary branding while creating a more cost- and logistics-efficient system in which to sell and profitably compete.
Mintel is now qualified as an APASS certified consultant, having gone through the training at Amazon’s Seattle headquarters. It’s eye-opening to see the ISTA6 testing protocols Amazon has developed and to witness real testing in person. Amazon tests packages and products to the worst-case scenario, the outcome of which is two-fold. First, it ensures that a consumer will receive products and packages that are undamaged and which reflect the equity of the brand. That is critical to a successful ecommerce experience for the consumer. Second, it will significantly reduce costs to Amazon for damaged and returned goods, which in turn will help it keep its overall costs of fulfillment and distribution as low as possible.
Finally, it’s interesting—and totally believable once you experience it first-hand—but Amazon considers itself to be a sustainability company, not an ecommerce retailer or logistics/distribution company. Everything it does reflects that mindset, and its package testing protocol is just one facet of a multi-faceted plan to prove that day by day, package by package.”
Build Rehabilitation, which is located in Los Angeles, offers specialized packaging services to a variety of different businesses in the industry. With 200 disabled workers and 50,000 square feet available, we have space and the manpower required to service all of our clients and their custom packaging needs.