Over the past decade, environmentalists have taken aim at online shopping and its perceived impact on the planet.
They’ve argued, in particular, that the increased volume of goods being shipped, such as shoes and clothing, are raising emissions levels and pollution and increasing waste.
Add on consumers’ expectations for next-day deliveries — Walmart and Amazon.com both announced this spring they are adding the service — and the case for potential damage to the planet becomes even more compelling.
However, it’s not all bad news.
Thanks to the efficiencies already enacted by retail and logistics companies over the past years, research from the MIT Center for Transportation & Logistics found that buying online can actually be better for the environment than traditional shopping, which involves the consumer driving from store to store.
In fact, traditional shoppers have more than twice the carbon footprint as online-only customers. (The absolute worst shopping patterns for the environment involve searching for merchandise in-store and then making the purchases and returns online with fast shipping.)
Josue Velazquez, director of the Sustainable Logistics Initiative at MIT, explained why e-commerce is eco-friendly: “[When you buy online], the company receives the order and can consolidate everything in a single, bigger truck. Therefore, in one single route, ideally, this company can deliver to your home. Instead of multiple vehicles going to one location, you have one vehicle going to multiple locations.”
He noted that certain factors can change this dynamic — for instance, whether the environment is urban vs. suburban, the distance to stores or the method of pickup.
“It’s better if you are a passenger or use public transportation or a bicycle, as many people do in Europe,” Velazquez said.
The Reality of Realtime
Nevertheless, e-tail’s impact on the environment changes drastically with the addition of fast shipping because companies are forced to abandon eco-friendly efficiencies in favor of expedience.
“With fast shipping, companies are sending a truck that probably is not fully loaded because they cannot wait for other orders to consolidate; they need to send now,” said Velazquez. “Therefore, the goods that they were delivering in one truck now are delivered in probably four or five. Many times they are going to the same neighborhoods, so this increases the carbon emissions associated with transportation.”
In fact, an online-only consumer who opts for fast shipping is increasing their carbon footprint by roughly 25%, according to MIT research.
Speedy deliveries, analysts noted, are just the latest move by retailers to meet and exceed consumer expectations — similar to other initiatives like BOPIS (buy online pickup in store).
But Velazquez pointed out that there are long-term implications to these delivery programs that will impact the entire planet.
“I’m a little bit disappointed that the companies like Amazon have started to push a one-day delivery promise because, in the end, there is no way that you can really make a business out of that, so this sounds more like a logistics strategy to get rid of the competition,” he said. “This is not good news for the environment.”
What Customers Want
In today’s hyper-competitive retail environment, it’s unlikely that e-tailers will abandon their two-day or next-day shipping strategies for fear of losing valuable customers. However, experts encourage retailers to improve their communications and transparency around the topic, particularly to keep customers.
“A lot of companies are putting sustainability at the forefront of their messaging because one of the things we’ve [noticed is that] more consumers have started to buy from brands that align with their moral compass,” said Jill Standish, senior managing director of Accenture’s Global Retail Consulting Practice.
She noted that progress has been made in terms of packaging and product design, but further steps are needed. “We need to educate the consumer more,” said Standish. “Could we be more transparent on how products are made? What is the carbon footprint of this delivery? Instead of doing next-day air, can you do five days and what does that mean for a carbon footprint?”
Velazquez and his team have been working to assess consumer sentiment regarding sustainability and shipping. While working with a major grocery company in Mexico, they sent local college students on home deliveries to ask the recipients about what it would take for them to choose a slower shipping option.
Researchers first offered a financial incentive, such as a $5 coupon for every day they were willing to wait. Velazquez said about 70% were responsive to money. “For those who weren’t willing to wait, we then asked, ‘What if I told you that for every day you’re willing to wait, I could save 200 trees in equivalent energy of CO2 emissions?’” Interestingly, 60% of the people who weren’t willing to wait in exchange for money changed their mind when presented with the environmental information.
“This is a market that nobody is capturing,” said Velazquez. “And it’s [good for] the companies because we know that you’re going to save fuel [with slower shipping], so less emissions but also less money wasted.”
He encourages e-tailers to present shoppers with the information in an easily understandable way, and let them make the choice.
Aside from shipping, e-tailers also can continue to improve their environmental impact through their packaging and distribution strategies.
George Wojciechowski, co-founder of ShipBob, a fulfillment service that specializes in working with e-commerce brands, noted that companies are increasingly requesting more sustainable packing materials.
“One of the worst things that companies do is they’ll use foam peanuts to create a layer of protection around the product,” he said, “whereas we use a machine that spits out recycled paper, which creates an amount of support — plus it’s recycled and it’s recyclable.”
He also pointed out that choosing a box that is too large is both an environmental and financial waste because it adds to the shipping cost.
Packwire, a website that specializes in custom packing for startup brands, allows clients to choose any size for their mailer box, up to a quarter of an inch. “They can even get a super-tiny box, like 2x2x2,” said co-founder Phil Bagdasarian. “That way they don’t have to use all the packing peanuts or bubble wrap; they don’t have to use anything. Plus, USPS has tiered pricing, so it would be cheaper.”
Like many packaging companies, Packwire’s boxes are made from at least half recycled material and are fully recyclable. He noted that boxes made from 100% recycled material are available, but his company doesn’t regularly use them. “The minimum quota we have to order is much higher for FSB-certified board,” he said. “We’d need to get a big job, like someone who wanted 10,000 boxes, in order for it to make sense.”
He does, however, recommend that brands consider using corrugated boxes for shipping because they use less paper than rigid boxes.
And Wojciechowski encouraged companies to work with fulfillment centers that prioritize sustainability in their facilities, such as using LED lighting and water and light sensors, as well as a robust recycling program. “Oftentimes, I’ve seen other places just take everything and throw it into a big dumpster out back, but having somebody on board who is monitoring the recycling and having recycling pickup regularly is important for the health of the planet.”