A Unique Opportunity for Omni-Channel Retailers: De-Carbonizing Shopping

The convenience of online shipping and home delivery is fantastic, but it’s hard not to wonder about its environmental impact.  All too often home delivery waste is blatantly obvious, practically in-your-face.  Take for example those times when the shipping package is 3 to 4 times larger than the item you’ve bought, and it lies buried beneath excess packaging materials.  When we see this, and consider eComm’s rapid growth, we worry.  Currently at about 14% of total retail sales, eComm’s retail market share is doubling every 5 years. At this rate it could easily reach 40% - 50% by 2030. It’s blowing up.

Sorry I digress.  Back to the initial argument, eComm sure is easy, and often less expensive, but we wonder about the sustainability cost.

There are many wasteful signs.  A neighbor complains about the ever-increasing number of delivery vans that block our street.  A work colleague expresses near disbelief when discovering that return rates for some products exceed 40%. 

We wonder how many of those returns go to the dump.  Would they even exist if bought instore vs. online?  We wonder about the sustainability cost.

But interestingly, the research comparing online vs. store shopping suggests it might not be that bad after all.  Studies consistently conclude that driving to the store is a big emissions offender.   The models say that delivery routes are more energy efficient than individual driving.  Which makes sense: a delivery van, routed to 50 neighbors on a single trip, burns less fuel than each of those 50 people driving to the store. 

But what about the waste of 50 delivered packages, the returns, the far-flung fulfillment centers…aren’t all of these together “worse” than our driving?  We wonder about the sustainability cost.

What if each of these neighbors bought more items, say 4 to 6 items instead of just 1?  What if the items are large, vs. small?  Or what if the 4 to 6 items, bought online, where shipped from 3 different locations in 3 different packages? It happens all the time.

The answer to the question – which method is more sustainable? - can go on endlessly if you let it.  After a while, though, you begin to realize that there isn’t a single answer.  The studies tend to agree that either method might be best depending on the situation, and the potential impact of the wrong choice can be significant.

Given this is true, I suggest we change the question.  I suggest we ask, whenever we shop: which method is best this time? What is the most sustainable way to shop for my needs right now, or sometime soon?   After all, unless you walk to the store, shopping generates pollution. Whether it’s a short drive to the store, or a small package home delivery - either way, carbon enters the atmosphere.  So, what is the most sustainable way to shop?  I for one would love to know. 

And here we come to the point:  omni-channel is the only way to shop either way.  Omni-channel retail has the potential to de-carbonize our shopping experiences. 

Imagine enabling consumers the ability to reduce emissions on every shopping experience? Powerful.  A tremendous win for the climate, and if well done, a chance for progressive retailers to convert online shoppers into brand loyalists and increase market share.  

I came across this idea in Generation Impact Management’s excellent white paper, listed on the Interesting Reads page.  Click to it here.  This excellent report calls for retailers to up their game on emissions reductions and reporting, with three specific conclusions.  First, they call for prioritizing electric vehicles. The others:

• “Second, the final frontier for all retailers is enabling sustainable consumption patterns. Given their capabilities in technology and data, ecommerce companies are only scratching the surface of what could be done with better environmental accounting. 

• Third, we need to see enhanced disclosure of GHG data in the logistics chain. We have developed this tool with industry experts, but it could be considerably refined if information was available on a wide range of industry players.”

Two other thoughts before I quit this post.  First, how feasible is this, calculating GHG data in the logistics chain?  I checked in with a good friend, an expert in transportation logistics technology applications for a large supply chain software firm, and he suggests that simple one-off analyses of this sort are not hard.  The data is typically readily available through retail order and carrier billing systems, and calculating comparisons between different delivery options is generally not difficult.  Although I doubt it is truly “easy” - no data measurement and compliance task ever is - what probably matters most is the level of precision required, and also standardization to provide fair and equal measurements. Using artificial intelligence to offer sophisticated alternatives would certainly be more difficult, but then as you probably know, predictive modeling is exactly where supply chain software is heading.

The other thought… would this matter?  It’s hard to imagine not.  There is a clear trend in this direction.  Carbon Trust has a well-known study about consumer interest in carbon labeling (see it here).  Several manufacturers have recently come out with carbon labelling for their products. (Oatly, Quorn).  Last year Unilever announced intentions to label all their products (~70,000). We should make a distinction that carbon “labeling” a delivery path is different from labeling the product itself, so tying carbon to logistics activities adds additional complexity.  Regardless, will consumers change behavior for the greater good?  The optimist in me says yes, many will.

Of course, we wonder about the sustainability cost of eCommerce.  Please join me in asking retailers to tell us.