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January 2, 2025
Amazon Signals Move Toward Sustainable Packaging: How Sustainability Can Drive Profit
With sustainability and environmental concerns being more than mere buzzwords in the contemporary retail space, as PYMNTS reported, it seems that more and more retailers are moving to address these issues in various ways.
Look no further than Amazon: According to Retail Dive, the retailer is making a serious push toward sustainability. While it didn’t meet its target of making 100% of packaging for its Echo, Kindle, and Fire TV products entirely recyclable, it did reach a rather impressive figure of 90%, up from 79% in 2022.
Presenting a focus on reducing plastic bags and wrapping both inside and outside of the product box, Amazon also indicated that it was incorporating far more recycled material in packaging for these products, using unbleached boxes to produce a kraft look. Plastic air pillows were also scrapped by Amazon in October, with recycled paper filler being used to protect shipped goods instead. Further, the retailer stated it had reduced its average per-shipment packaging weight by nearly half (43%) since 2015.
Retail Dive indicated that one of Amazon’s competitors in the smart device space, Google, has also moved to take plastic out of its packaging. As of August 2024, Google succeeded in making all packaging for its new devices — including the Fitbit, Nest, and Pixel lineups — without the use of plastic.
Sustainability, ESG (Environmental, Social, Governance) Policy Can Enhance Profits
Whether sustainability can enhance profits remains something of a question in 2025, but the preponderance of evidence seems to suggest that green efforts are rewarded.
According to Diversitech Global research, consumers are increasingly savvy as to environmental issues, particularly concerning the products they aim to purchase. Some of the more notable findings produced by its report include:
- Almost 1 in 3 shoppers surveyed indicated that they had boycotted certain brands or products out of concerns related to ethics or sustainability.
- A full 70% of millennials and Gen Zers polled indicated they would pay more for sustainable products.
- Almost two-thirds (64%) of those surveyed indicated that brands needed to reduce the amount of packaging on their products and to ensure that packaging was more sustainable in nature.
And as Maersk outlined, retailers may be gently prodded in greener directions by government regulations in tandem with the proliferation of AI tools — tools that could spur massive improvements in supply chain optimization.
“Regulatory imperatives, coupled with technological advancements in data analytics and AI, further incentivize retailers to embrace sustainable practices, offering avenues for operational optimization and efficiency enhancement,” Lara Albertina Rebello wrote for Maersk.
On a broader level, a 2022 Deloitte Global research report indicated that today’s investments in sustainability could drive greater economic rewards in the future. Inaction on climate change could cost $178 trillion by 2070, per Deloitte Global, while successfully investing in greener production and transportation models could see a “turning point” emerge where profitability was enhanced.
“It’s important that the global economy evolves to meet the challenges of climate change,” said Dr. Pradeep Philip, lead partner for Deloitte Access Economics. “Our analysis shows that a low-carbon future is not only a societal imperative but an economic one. We already have the technologies, business models, and policy approaches to simultaneously combat the climate crisis and unlock significant economic growth, but we need governments, businesses, and communities globally to align on a pathway toward a net-zero future.”
Is Sustainability an Overused Buzzword?
PYMNTS spoke to the proliferation of labels or buzzwords surrounding sustainability and environmentally conscious notions — “eco-friendly” and “green” chief among these. The superficiality of these labels may be fading, though, as legislators, retailers, and consumers alike become more aligned with the greater goals of sustainability in terms of consumer goods.
Some retailers are walking the walk, however. Per Carbon Trail, H&M is one example of a retailer taking sustainability seriously. Its “Conscious Collection” drew praise from Carbon Trail for incorporating recycled materials in addition to organic cotton. Additionally, the outlet mentioned H&M’s garment recycling program, a strategy that is also carried out by brands like Patagonia, Levi Strauss, and Urban Outfitters, according to Recycle Coach.
Greenwashing may also be meeting its demise, as Forbes reported last April. Citing a 2022 Bain & Company study, Forbes noted that 65% of fashion consumers were concerned about the environment.
“Of course, ESG initiatives are important to today’s boards and investors. These stakeholders carefully track ESG performance because of the potential long-term impact on retailers’ business value, company perception, brand reputation and more. ESG efforts can also lower costs by improving efficiencies to ensure a stronger bottom line. For example, implementing sustainable practices like energy-efficient lighting, heating and cooling systems can reduce utility costs. Ultimately, retailers that fail to invest in ESG risk losing investors themselves and impeding business growth in the long term,” Forbes Council member Jeffrey Casale wrote.
Discussion Questions
What are some perhaps less obvious pitfalls retailers might look to avoid when investing in sustainability initiatives or policies?
Do consumers actually care enough about sustainability and environmental efforts to pay more for a product or to boycott those not doing enough on these fronts?
Which retailers stand out as being particularly strong on sustainability? In contrast, which brands could do more to attract environmentally aware consumers?
Poll
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Shep Hyken
Chief Amazement Officer, Shepard Presentations, LLC
Carol Spieckerman
President, Spieckerman Retail
Kenneth Leung
Retail and Customer Experience Expert
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Cynical me says the head doesn’t get it quite right: “perception of sustainability…” is more apt. That’s not to say the practice has no value, or there aren’t honest practiontioners; just that I don’t see Amazon as one of them. But I won’t scold, the forensics in the actual article suggest people know what’s up, or at least they’re as skeptical as I.
For years, Amazon had a problem with shipping small items in oversized packaging. That seems to have abated, and every move the company can make to be more sustainable is appreciated by customers.
Consumers do care about sustainability, but they don’t want to pay for it. That’s why there’s a disconnect between what people say in surveys and how they act. The real gains are made where policies can be implemented that save retailers money as well as help the environment.
You are 100% right, Gene. People don’t put their money where their mouth is! It’s as simple as that!
Any improvements Amazon makes on the sustainable packaging front are merely lessening the impact of a self-created problem. The same goes for purveyors of fast fashion. Focus groups I’ve attended confirm that this disconnect isn’t lost on consumers and it impacts buying decisions and brand (or platform) loyalty. Still, something is better than nothing and smart retailers and brands are partnering with third-party providers that understand the intricacies of sustainability and how to execute programs at scale.
My annual customer experience research found that 60% of customers prefer to do business with a company that has a social cause that is important to them, and 63% expect companies to be socially responsible. Between shipping and packaging, there is a lot of opportunity for Amazon to successfully practice sustainability. It’s good PR, and if done right, will make a difference.
Survey is one thing, wallet share is another. There is always a bias if you ask would they do the right thing, at the end of the day it is the purchase behavior that counts. People want convenience at close to zero cost. Amazon is the closest company that has done it (you have to pay for Prime). Sustainability for any ecommerce retailer is about reducing shipping/handling costs and the perception of waste.
I’m a fan of sustainability measures. Having seen some wonderful examples of companies and brands remaining mindful of their packaging is quite encouraging indeed. We need to see those 7 in 10 consumers who said they would pay more for such items actually reaching into their wallets and making that commitment.
My encouragement to brands and retailers (including their private label) is to take the leap and make an investment in sustainable packages and continue planting seeds and paying attention to their crops … eventually consumer purchases will catch up.
The ecommerce packaging opportunity it bigger than just shipping boxes. Retail-ready packaging is glossy, expensive and often oddly shaped making it inefficient to store as pickable items in an ecommerce warehouse.
Two examples are batteries and larged bagged candies. In store the hanging battery pack with plastic cover looks good. But it’s very inefficient for ecommerce storing or automated pick arm picking. Some retailers will ship plain cardboard boxes of loose batteries when buying in bulk. That makes a lot more sense.
The standup bags of candy in the candy aisle is another example. Terrific for shelf appeal. Terrible for ecommerce item storage, shipping and automated pick arm picking.
There should be an initiative to match packing with channel to reduce costs and waste. It will also improve ecommerce fulfillment operations.
Would be nice if Amazon when delivering also picked up folded flat, good condition used Amazon boxes, and reuse / recycle them. I know the entire logistics operation is optimized for going one way – Amazon DC to Consumer……but returning a truck route of boxes to an Amazon DC for reuse should be feasible. I’d be less embarrassed to get even more Amazon stuff delivered if the boxes found their way back.
Let me apologize up front for being the grinch but let me list just a few reasons why these surveys are bogus and why Amazon will probably not significantly improve sustainability.
Surveys and polls are designed to produce the results the sponsor wants. A broad scale boycott of products over sustainability does not seem to be valid.
Millennials are a frugal group of shoppers, so its doubtful that they will play more for sustainability. In the words of the survey, 64% “of those surveyed,” believe that brands should reduce the amount of packaging on their products. It is important to note that the key words are “of those surveyed.” Who was surveyed?
Secret surveys of this type are meaningless. Exactly who was surveyed? What are the demographics and mixes of the respondents? What questions were asked, and what options were available? What is the level of generalization? How specific is the information? What is the objective or goals of the sponsor who paid for the research?
The majority of the products Amazon sells are from third parties, and aside from some private-label goods, Amazon has little or no control over how, or what materials are used.
A number of articles, surveys, and summaries indicate consumers are dispassionate about environmental factors, unless Product A and Product B are of comparable quality and price.
Since consumers are not buying into the narrative, especially with all its contradictions, lack of credibility, and inconsistencies, they don’t pay more for sustainability.
Amazon customers may prefer less packaging for lightness and handling, but not for sustainability. It is also very true in the opposite direction. The Amazon customer wants to receive orders that are very securely packaged.
Many consumers are also aware that recycling is based on untruths and overstatements. Due to the lack of markets for recycled resins, very little of what people put in their own recycling bins actually gets recycled. I apologize for letting the air out of the phony balloon.
One big pitfall is pretending to be sustainable without real action and greenwashing fools no one anymore. Customers are smarter, and if the efforts aren’t genuine, they’ll see through it. Brands like Patagonia and Levi’s stand out because they truly commit to sustainability.
Many customers say they’ll pay more for sustainable products, but price and convenience still win most of the time. Retailers need to stop treating sustainability as a marketing gimmick and invest in genuine practices, unlike fast fashion brands. Otherwise, they will keep losing trust and relevance in the market.