The retail sector has significant potential to reduce its costs while also lowering its environmental impact. A new report from Svensk Handel shows that changes to packaging and delivery solutions can cut costs by up to 88 percent in the part of the value chain where goods are delivered to retail warehouses.
The findings are based on a number of pilot tests in which companies have tested new ways of delivering goods to warehouses. By switching from small retail packages to larger, more customized packaging solutions—so-called “e-commerce ready” and “omni-channel ready” deliveries—significant efficiency gains are achieved.
The pilot tests show, among other things:
- 88 percent lower costs, in the form of reduced time spent and lower packaging costs (range in the project: 75–99 percent)
- A 77 percent reduction in climate impact, measured in terms of carbon dioxide emissions and energy consumption (range: 66–90 percent)
- A 64 percent reduction in resource use, measured as a reduction in the amount of packaging material in kilograms (range: 55–95 percent)
- A 23% improvement in the work environment, measured as a reduction in occupational health and safety risks (range: 0–36%)
“This is one of the most concrete steps retailers can take to both cut costs and reduce their environmental impact. The potential is enormous,” says Per Ljungberg, Head of Innovation at Svensk Handel.
Significant efficiency and climate benefits
Today, many products are delivered in small retail packages, such as six-packs, eight-packs, or twelve-packs. This creates unnecessary handling in warehouses, as products must be repackaged before they reach the store or the consumer. When these are replaced by larger packages containing more products, the need for unpacking is significantly reduced. This leads to faster flows, lower costs, and less packaging material.
“We’ve seen significant gains in efficiency and environmental performance in the pilot tests we’ve conducted, and we’re now rolling out e-commerce-ready solutions in collaboration with our suppliers across as much of our product range as possible,” says Christoffer Andersson, Head of Logistics Development at Apoteket.
The report’s key conclusion is that “e-com ready” is just the starting point. This approach yields significant benefits, but is currently limited to certain product flows. The report therefore points to the next step: “omni ready.” Here, packaging sizes are scaled up within existing systems—for example, from eight-packs to thirty-two-packs. The impact per product is slightly lower, but since the solution can be widely applied across the entire retail sector, the total potential is significantly greater.
“Omni Ready makes it possible to streamline large parts of the retail sector, not just e-commerce. This is an issue for the entire industry,” says Cecilia von Stockenström, e-commerce business developer at Kronans Apotek.
More testing is needed
A key factor behind these results is collaboration between suppliers, retailers, carriers, and packaging companies. When the entire supply chain is optimized, even small changes can have a significant impact.
“The results are fantastic, and the pilot tests conducted as part of the project need to be supplemented with similar tests at more companies, with more products, and across more industries so that we can develop the e-commerce and omni-ready concept for broad application in the retail sector,” says Per Ljungberg.
The project was led by the Swedish Trade Federation’s “E-com Ready” working group in collaboration with Apotea, Apoteket, DS Smith, Karo Healthcare, Kronans Apotek, Oriola, and Perrigo. Blomsterlandet, Nelson Garden, and Apotek Hjärtat participated in the working group. Project managers: Mårten Sjölin, Sjölin & Löfgren AB, and Jonas Arnberg, Svensk Handel.
