We've all ordered something online that shows up in packaging that makes no sense.
Typically, that incompatible box, envelope or 15 square feet of bubble wrap ends up in the trash or takes up a lot of room in your garage or recycling bin. It's a pesky issue too many of us are familiar with, and it costs retailers a lot of money.
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But many inefficiencies at large corporations go unnoticed or unaddressed as the machine keeps churning toward profit and growth -- that is, until those inefficiencies start to cost them dearly.
Such is the case with Walmart (WMT), which recently noticed an uptick in its goods arriving overpackaged. What seems like a small problem doesn't just annoy consumers. It makes shipping more expensive, which in turn makes it more costly for the seller.
The world's largest retailer has committed to ensuring that its customers get what they ordered -- appropriately packaged. The initiative is designed to right-size shipments and reduce waste -- something the retail giant has placed a renewed focus on as it scales up its e-commerce efforts to compete with Amazon (AMZN).
Image source: Jeff Schear/Getty Images for Walmart
Good Things Come in Right-Sized Packages
In a June 1 announcement, Walmart said it would ensure that its goods arrive in more sustainable materials, which mean they'll come in a box properly sized for whatever you ordered. And the packaging will be better suited for recycling.
"This includes moving from plastic to recyclable paper mailers, right-sizing cardboard-box packaging, giving customers the option to consolidate shipping on e-commerce orders, opting out of single-use plastic bags for online pickup orders, and last-mile delivery efficiencies to reduce mileage and delivery times," the news release on Walmart's official corporate press page says.
It believes shipping products in paper mailers -- those thin brown paper envelopes that fit things like personal-care products, condensed and nonfragile gadgets, and small clothing items -- may help to reduce 65 million plastic mailers that tend to be single-use and nonrecyclable.
This equates to roughly 2,000 tons of plastic waste by the end of Jan. 31, the conclusion of Walmart's fiscal year.
Walmart Is Using AI to Boost Efficiency
As the largest retailer, Walmart has a lot of hurdles to contend with. Reducing waste and moving to more sustainable shipping methodologies is certainly a step in the right direction.
Its largest competitor, Amazon, all too often ships goods in inappropriate packing. Tiny, nonfragile items may arrive in large boxes filled with bubble wrap. Large boxes and plastic envelopes are expensive to produce and ship -- but often big retailers have no other options readily available unless they work to change shipping methodologies from where an item originates.
Since both Walmart and Amazon have thousands of distribution centers across the country, fulfillment is a difficult task -- but one that stands to benefit from the integration of artificial intelligence.
Walmart says it has begun implementing the new technology: Once an order is placed, AI can help decipher whether an item can be shipped from a store versus a fulfillment center. Walmart already has 4,700 brick-and-mortar stores, and 90% of the American population lives within a 10-mile radius of one.
By leveraging this massive footprint, Walmart's shipment and fulfillment system stands to get a whole lot more efficient -- and expedient. That's especially if customers opt out of pesky packaging (which takes more time to box) and are willing and able to get multiple items delivered together.
Walmart will also offer customers the ability to opt out of single-use plastic bags in online orders. The retailer has already eliminated single-use plastic bags (and some paper bags) in many states, instead offering reusable bags for $0.74.
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