The surging popularity of online shopping has created a headache for environmental groups concerned by an increase in packaging waste – and physical retailers could hold the solution.

Australian consumers spent more than $50 billion on online shopping in 2020 as the pandemic shuttered stores and forced people to make their purchases from home.

Data from Australia Posts’ Inside Australian Online Shopping 2021 report stated this was a record-breaking sum and represented a 57% year-on-year increase in digital shopping.

The sector now accounts for 16.3% of all Australian retail spending, the report found.

And this change in shopping behaviour is not expected to reverse even as lockdown restrictions ease and stores reopen to the public.

This increase in online shopping has also brought about an increase in the use of packaging as goods are shipped from retailers to consumers – by March 2020 alone, corrugated box shipments had jumped 9% year-on-year and continue to climb.

Meanwhile the market for filled-air packaging products is tipped to balloon by $1.16 billion between 2020 and 2024 due to the increase in digital sales.

The quick click fix

While there are currently efforts to make packaging sustainable, many of the materials used to manufacture these products remain relatively expensive.

And simply posting without packaging is hardly a solution either – the environmental cost of replacing goods damaged in transit is often worse than the cost of appropriately packaging them ahead of time.

However, that’s not to say it isn’t possible to sell goods online without packaging. Speaking to fashion industry magazine Drapers, Clipper Logistics CEO Tony Mannix said the solution to the packaging problem could be to simply stop posting goods bought online.

More specifically, he suggested using click-and-collect services in lieu of postage could result in less packaging waste.

Click-and-collect solutions can also help drive foot traffic back into stores, helping retailers develop relationships with their customers and alleviating stocking challenges created when unwanted or ill-fitting goods are refunded but still awaiting return postage.

Companies like TZ Limited, an Australian technology company specialising in access control solutions, are even enabling smaller retailers to rollout contactless click-and-collect solutions using their smart locker banks.

Footwear company Nike, heavy machinery retailer WesTrac, and South African bank NedBank have already implemented these lockers to give customers secure, 24/7 collection options without needing to mail out goods.

In April, the company further cemented its place in Australia’s click-and-collect market with the acquisition of 34 already-installed POP Station locker banks from logistics outfit CouriersPlease.

The deal also included an additional 19 locker banks presently in storage, which TZ can deploy to new locations selected to help retailers improve the delivery experience for their customers.

The company also announced a partnership with HUBBED, giving TZ access to more than 2000 parcel collection sites around the country in a move CEO, Scott Beeton, said will give shoppers more choice and control over how they receive their goods.

“Through agreements with retailers and couriers, HUBBED gives consumers more control and options regarding their preferred delivery, collection and return choices,” Mr Beeton said. 

Stay up to date with the latest TZ Limited company news and announcements by registering your details on their investor centre.

Reach Corporate provides Corporate Advisory Services to TZL and has been engaged by them to manage their investor communications.

Sources:

• Vox: Online shopping has boomed in the pandemic. But what about all the packaging?
• Drapers: Why is click and collect so important post Covid?
• Australia Post: Inside Australian Online Shopping
• Stockhead: TZ just snapped up a nationwide network of click-and-collect locker banks
• Small caps: TZ eyes multi-billion dollar click-and-collect market with smart lock technology