Why and how to make eCommerce more sustainable?

Online shopping has become an integral part of everyday life and the eCommerce industry is booming. Especially in times of the pandemic, the increase was enormous. A survey by BITKOM showed that 84% of the German population over the age of 16 currently shops online. This corresponds to 58 million citizens. As the number of online shoppers increased, so did the net sales of B2C eCommerce. While this figure was at around 73 billion euros in 2020, sales are forecasted to rise to an impressive 109 billion euros in 2023 (Statista, 2022). Advantages that make online retailing particularly popular are delivery to the door, opening hours around the clock, and the numerous premium services that promise faster and more convenient delivery. But what does this mean, especially in terms of sustainability?

 

The consequences to the environment

 

The enormous growth affects the environment in many ways. According to the German Federal Environment Agency (UBA), 75% of the emissions are generated during the manufacturing process. 10% can be traced back to transport. This may not sound much at first, but given the high annual order volume, it sums up to an enormous amount of C02. The consequences listed below weigh particularly heavily and accordingly have a high need for optimization.

1. Higher transport volume

2. Growing number of failed delivery attempts

3. Rise in product packaging

4, Increase in returns

 

1. Higher transport volume, especially on the last mile 

As a result of the increase in orders, the transport volume for deliveries is also rising. Although greater distances are covered between the goods distribution center, the start package center, and the destination package center, the greatest need for optimization is on the last mile. This is the distance between the destination parcel center and the end consumer.

A study by McKinsey underlines the above and states that last-mile services will lead to 36 percent more delivery vehicles on the roads in the 100 largest cities worldwide by 2030. The consequences are higher emissions of up to 25 million tons. Other negative effects are traffic congestion, higher pollution, and noise caused by delivery vehicles. The increased traffic is not only caused by the rising number of orders but also attributable to more buyers demanding faster and more individualized delivery. As a result, more vehicles are on the road of which the capacity is not fully used.

Sustainability on the last mile in eCommerce
The solution for more sustainability on the last mile? 

An essential measure to improve the carbon footprint is to switch to electric vehicles, or even better, cargo bikes. If this cannot be covered by standard shipping service providers, it makes sense to look for a sustainable shipping partner.

Using city-based micro depots is another great way to make eCommerce more sustainable. These micro hubs allow products to be stored in different locations which enables shortening the routes to end consumers. With automated route optimization, additional routes can be saved and vehicles can be optimally utilized. The establishments of micro-depots are already an integral part of the National Climate Protection Initiative and get funded by the BMUV (Federal Ministry for Environment).

 

2. Numerous failed delivery attempts

Another problem that drives up last-mile emissions is failed delivery attempts. If a delivery is successful, around 277 grams of CO2 are emitted, according to calculations by myClimate. However, it often takes up to three delivery attempts, as around a quarter of deliveries fail on the first try (Bundesvereinigung Logistik, BVL). This results in CO2 emissions of over one kilogram per package. The consumer association additionally points out that several attempts result in around 18 percent of customers having to pick up the delivery themselves. This is sometimes done by car, which in turn has again a negative impact on the eco-balance.

The solution for a higher success rate of deliveries?

There are two primary ways of minimizing the problem of incorrect deliveries. First, customers can be offered short delivery windows to ensure they are at home to receive the parcel. This significantly increases the chance of a successful delivery. Second, offering online shoppers to get their packages sent to alternative shipping locations such as packing stations also reduces misdeliveries. 

 

3. Rise in product packaging

The increasing demand for transport packaging presents another hurdle. Numerous retailers use standard sizes and pad the cartons with filler material often made out of plastic. Emissions vary by size as well as material, and can range from 20 grams for smaller boxes to 1000g for large cardboard boxes (German Federal Environment Agency). This not only results in a lot of waste but also means that the capacity of transportation vehicles is not fully utilized.

Reduce Product Packaging Waste eCommerce
The solution? More sustainable packaging in eCommerce

There are several things retailers can consider. It starts with improved packaging sizes that are based on the size of the individual product that is being shipped. This saves filling material and ensures better utilization of transport vehicles. In addition, if filling material is needed, sustainable raw materials should be used. Of course, recycled or, in the best case, reusable packaging would be ideal. 

 

4. Increase in returns

More online purchases also mean an increase in returns, especially in the fashion sector. The consumer center estimates that 800,000 returns are made every day in Germany alone which are responsible for the emission of around 400 tons of CO2. In this respect, returns are a real environmental sin. In addition, many returned items are destroyed because it is simply cheaper than reselling or donating them. Consequently, all the resources that have been used for production are being wasted.

The solution? Minimize returns and make them more sustainable

With the help of detailed product information and realistic images, customers get a more precise idea of the item they are buying. AI-based applications also manage to analyze customer behavior and make individualized product suggestions based on data. Both of these factors increase the chance that customers will actually like the item they receive. In the event that items are returned, they should not be destroyed but reused, sold as used goods, or donated. Finally, the retailer can also appeal to online shoppers by outlining the consequences of returns.

If you follow the above four solutions as a D2C brand in terms of transport, delivery, packaging, and returns, you have already taken a big step towards sustainability. Well done! But is it possible to, at the same time, meet customer needs in terms of delivery speed and flexibility?

 

Are sustainability and fast delivery mutually exclusive in eCommerce?

Speed and individualization on the last mile do not always lead to a higher impact on the environment. Thus, customers do not have to decide on either speed and convenience on the one hand or sustainability on the other hand. What does this mean for shop owners? You do not have to weigh the competitive advantage of offering a fast and convenient service against an environmentally-friendly solution. There are providers, such as dropp, who offer a personalized and fast delivery and, at the same time, represent pioneers in the field of sustainability.

dropp delivers environmentally friendly via eBikes and eVans. On top, the start-up uses micro hubs and route optimization to reduce distances and use the full capacities of their transportation vehicles. In addition, dropp avoids using any filling material or cardboard packaging and sticks to paper bags only. Customers also have the option of selecting a window of their choice, which significantly reduces the number of delivery attempts. The success rate currently lies at 93% for the first delivery. This is far above the average of traditional shipping companies and not only saves a lot of resources but also increases customer satisfaction. So choosing the right shipping service provider for the last mile allows you to not only tap into new audiences but create a competitive advantage.

Do you want more information about dropp? Contact: sales@withdropp.com