California company is offering reusable packaging to e-commerce brands
Imagine a world where companies never have to buy a new box for a shipment or one where box manufacturers are nearly put out of business.
Sounds far-fetched? It probably is. But there is a California company that is trying to move the direct-to-consumer market closer to a truly circular economy. Boox wants brands and consumers to switch to reusable shipping containers — boxes and now bags.
The Petaluma, California-based startup on Tuesday announced the introduction of its Boox Baag, a reusable package designed to ship items such as clothing and other soft products. It joins the Boox Box as a sustainable shipping package offering that is designed to be used over and over again.
“Once you create them, if you do it efficiently, you never have to make another one again,” Matt Semmelhack, CEO and co-founder of Boox, told Modern Shipper.
While it is unlikely to ever put packaging manufacturers out of business, the Boox business is part of a movement to build a circular economy. Semmelhack said the company, founded in 2020 on the premise of building reusable packaging, is quickly growing into a “platform for reuse.” Its road map includes the potential development of a means for any consumer that has an item that can be reshared to do just that.
At the moment, though, Boox is reinventing sustainable packaging. The Boox Baag is made of recycled nylon and polyester and includes a Velcro enclosure for sealing.
“The Boox Baag is designed for hundreds of uses over time, but the key part is how do we get them back,” Semmelhack asked.
The answer is through partnerships and its overall business model. Boox offers locations where consumers can return the Boox Box and Boox Baag. The company has over 6,000 locations in the U.S., primarily Happy Returns’ Return Bar locations, typically located inside Staples stores, and another 4,000 locations in the U.K. through a partnership with InPost lockers.
The other part of the equation is incentivizing consumers to return the packaging. Unlike a traditional e-commerce return where the consumer is receiving a refund that could range into the hundreds of dollars, there is no clear incentive for the consumer to drive to a physical location to drop off the packaging.
“We have a couple [of clients] that are offering very specific incentives, some up to 25% off the next purchase,” Semmelhack said. “There are several types of discounts that are motivating people. I think over time it will get better [but] we need to incentivize people. I think 10% of the people will do it but to get that other 90% you really have to [incentivize].”
So how does a business that wants to reuse packaging make money? Boox is doing this by taking the burden (and cost) away from the retail brands and gambling on itself. The company does not charge the shipper for the packaging, instead charging a service fee for use of the Boox service on a per-shipment basis.
“It puts the onus on us to get them back as efficiently and affordably as possible,” Semmelhack said, noting the cost is between 5% and 10% higher than the standard cardboard box. Return rates vary wildly by brand. “There are some clients at a 10% return rate … but there are some other clients that are at a 65% return rate.”
Semmelhack said Boox is at breakeven whether a single package is returned or not, noting that the service fee covers the manufacture of the packaging. Obviously, the more items that are returned and reused, the higher the margin goes. “We know that some percentage will always be reused,” he said.
The packaging is a visible indicator for brands looking to go green at only a slightly higher cost. Among the companies Boox is working with are well-known brands Lululemon, REN Clean Skincare, Boyish Jeans and Ouai. The company said that retailers that utilize its packaging are able to reduce their environmental impact by 70% or more after 10 shipments compared to traditional cardboard boxes.
All Boox Boxes and Baags feature QR codes linking to digital instructions to guide consumers through the return process. They are also designed to always be reusable, even in situations in which the packaging is no longer suitable for shipping.
“We designed the products pretty carefully so if they do reach end of life, they can be recycled back into a new product,” Semmelhack said. “Our tagline is literally the box you won’t throw away.”
Boox Boxes in the U.S. are manufactured with 20% postindustrial material, but the company has just produced a box from 100% postconsumer material in Poland, and the goal is to use as much recycled material as possible in the making of the product.