Eight years ago, we reviewed an excellent book called Force of Nature: The Unlikely Story of Wal-Mart’s Green Revolution. At that time Wal-Mart, which was long the target of environmentalists, created nothing less than a green revolution. One of its changes was forcing suppliers to reduce packaging sizes, which ended up saving $3.4 billion a year while reducing trash.
Now, in a similar vein, the new giant on the block, Amazon, is pressuring brands to make their packaging more efficient, prompting vendors to make costly changes to their businesses or face fines. Amazon has told companies they must make packaging for thousands of larger products more compact and easier to open. Eventually, Amazon wants every product it ships to meet similar standards. The firm said the requirements will make packages more environmentally friendly.
The new packaging requirements are the latest example of Amazon’s power to get vendors to change the way they do business, writes The Wall Street Journal (July 30, 2019) . Manufacturers of items from soup to garden rakes say they have to sell through Amazon to reach more customers. Philips Norelco OneBlade said it cut the components in its razor packaging to 9 from 13 and reduced the volume of packaging by 80% to meet the new standard. Hill’s Pet Nutrition said it decreased the packaging volume of its Science Diet premium dog food by 34% and the amount of wasted space, or air shipped, by 82%. The maker of Rubbermaid FreshWorks said it cut the components used to ship its containers to 2 from 7.
Amazon’s expanding e-commerce footprint has been consuming more cardboard and plastic packaging. Now, it is trying to address consumer calls to cut back on waste while reducing excess weight and volume to generate savings on shipping as well.
Classroom discussion questions:
- What are the similarities between Wal-Mart and Amazon in this regard? The differences?
- Why is this an important OM issue?