This year’s holiday gifts come in a different wrap.
Instead of the usual wrapping paper for purchases made from its site, retail behemoth Amazon.com Inc. (AMZN) is offering consumers the choice of velvet gift bags in three different colors and five sizes this holiday season in the U.S., Mexico, and Canada. The sizes for the gift bags range from a palm-size BB-8 droid replica from Star Wars to a DJI Phantom Drone. The gift bags cost the same as standard wrapping paper used by the company earlier. Amazon’s director of sustainability and social responsibility told Fortune magazine that the company’s “guiding North Star is the minimization of packaging.” She added that “wrapping paper has no value.” The Seattle company will ship one million items this holiday season with “frustration free” packaging or packaging that is simple and uncomplicated for consumers to open. (See also: Amazon: 10 Secrets You Didn't Know).
Amazon’s move is a step in the right direction as e-commerce increasingly takes over from brick and mortar stores. While it may be cheap and efficient, this type of commerce relies on cardboard boxes and plastic packaging for deliveries. According to the Environmental Protection Agency, containers and packaging accounted for 75 million tons or 29.3% of all waste generated in the United States back in 2013. As e-commerce and delivery services, from startups such as Postmates to Alphabet Inc. subsidiary Google (GOOG), multiply, the problem is expected to multiply. Amazon alone is said to ship 608 million packages per year, according to a report by research firm Sanford C. Bernstein. The company has received 33 million comments from users about packaging since 2009.
Using recyclable packaging also comes with financial benefits. For example, a company in California estimates that it saved saved a million dollars annually by using recyclable materials. Amazon refused to put a number to the financial benefits it gains from the move. However, an analyst is quoted as saying that the company can “save money by reducing packaging costs and increase room on trucks for more sales by making packages smaller.” (See also: Understanding Amazon's Capital Structure).