Before COVID-19 eCommerce was booming. A year ago, Ecommerce News Europe reported eCommerce to be worth 717 billion euros. What is perhaps not surprising is that during the pandemic this figure ballooned even further. There's no doubt that the growth of online shopping in Europe is a revenue-driver for businesses and a win when it comes to consumer convenience.
However, as online sales grow, so too does the environmental impact. The eCommerce industry is strongly called upon to come together to acknowledge its growing carbon footprint, even though online stores are commonly misperceived as being more climate friendly than physical stores. With this footprint in the spotlight, a joint effort is needed to clean up the logistical process to realize Best Environmental Practice (BEP) in eCommerce.
Long term solutions require collaboration. With the current state of affairs, failing to grow sustainably carries too many risks for a business' operations, its bottom line, and the planet. One such risk is ignoring consumer demands, and the customer's opinion shouldn't be overlooked when searching for greener solutions.
The consumer demand for greener processing channels is indeed a force putting pressure on the industry to be more proactive about its impact. Environmental issues, and how a business takes responsibility, is more top-of-mind for consumers than ever. According to IBM, nearly 6 in 10 consumers say they're willing to change their shopping habits to reduce their environmental impact. Customers are voting with their wallets - and buying from brands that value sustainability. Similarly, a German study found that 86% of online shoppers would opt for an environmentally sustainable shipment option if they had the choice. If offered the option, many customers will pay for climate neutrality. For companies, a change to sustainable logistics not only means enhanced environmental performance, but also improved customer satisfaction and even employee retention.
With online shopping becoming more popular by the day, the corresponding carbon emissions of producing and transporting goods are also increasing. As previous reports show, consumers' preference for online shopping has grown at a rate that was not expected until 2025. Together with South Pole, Digitec Galaxus applied the Climate Neutral Checkout solution to their eCommerce system as one way to reduce the environmental impact within their customer purchase process. This allows customers to make up for their consumption-related CO2 emissions, and to invest in carbon credits that contribute to environmental protection projects.
Adyen, a payment processor from The Netherlands, also implemented Climate Neutral Checkout by building an emission calculator into their production and delivery system. This determines the amount of CO2 emissions related to the production and delivery of purchases. Customers can choose to offset these emissions by supporting third-party certified reforestation and renewable energy climate projects, like those developed by South Pole.
Similar efforts can be seen by eBay Germany, which offers customers the option to offset their CO2 footprint. All of these initiatives are helping to make customers more aware of the climate impact their consumption habits can have.
For the eCommerce industry, the CO2 footprint left by the packaging of shipments is still too high. A majority of the waste is caused by over-packaged goods and the curious belief that already packed products need to be repacked once again for shipment.
Protecting products is important, as having to re-pack and return damaged goods is even more environmentally damaging. However, sustainable packaging solutions are available for the eCommerce industry. Popular materials include biodegradable plastic packaging, plant fibers, and air pillows. Companies with a future-oriented mindset are taking these innovative green packaging alternatives onboard and developing them even further to match their BEP.
Olive is a relatively new entrant in this domain that's joined forces with hundreds of retailers to deliver packages that can be reused and returned. They also schedule weekly rather than daily deliveries, allowing the company to aggregate orders and ship them together from a centralized location, cutting down on transport emissions.
Noissue is a popular provider of custom sustainable packaging, with a product range made from compostable, recycled, and reusable materials. The company makes its own packaging - which includes everything from mailers and tissue paper to stickers and tape - accessible to small businesses so brands of all sizes have an opportunity to meet consumer demands for sustainable packaging.
In combination with sustainable packaging, many brands and retailers are choosing carbon-offset or carbon neutral shipping. Transportation activities alone - the vehicles and vessels needed to move goods around the world - are responsible for approximately 17% of global greenhouse gas emissions. As demand for package delivery grows, the World Economic Forum (WEF) estimates 36% more eCommerce delivery vehicles driving around our cities by the end of the decade. With this in mind, focusing on reducing carbon emissions through modified shipping practices can enable all businesses to stay productive and profitable without compromising environmental health. Gradual changes to business operations can already have a great impact, such as switching to a sustainable fuel alternative, which alone will cut transportation emissions by 28%.
One company tackling the issue of shipping emissions is Sendle, a 100% carbon neutral shipping provider for small businesses. Sendle reduces the impact of eCommerce delivery by making use of excess space in existing delivery trucks to ensure every route is maximized. They then offsets the emissions of every shipped package by funding nature-based carbon removal projects with South Pole as their partner. Through offsetting, Sendle gives businesses a way to immediately reduce their delivery footprint. The company is also actively looking at ways to move the broader shipping industry towards a zero-emissions future.
Customer returns are a critical part of post-purchase logistics and they can have a significant impact on both the environment and the health of a business.
In the past years, more than 50% of online shoppers across The Netherlands and Germany have returned at least one product. On average, 13% of online purchases in The Netherlands are returned. As much as 65% of returns can be prevented by instilling a cleaner retailer process.
Statistics show that a positive returns process is key to customer satisfaction and loyalty. Despite this, returns remain the least favourite part of the customer experience, and most European companies score between an average of 6.5 and 7.5 on their Customer Experience Excellence (CEE).
The trouble with returns is that they cause massive amounts of waste. In particular, it is estimated that €7 billion is lost to returned products that are then destroyed in Germany alone. Stemming from overproduction and overconsumption, great ecological damages is done by insufficient retail waste management.
In an attempt at better waste management, brands across the EU have embarked on a circular economy mission. This includes the minimization of returns by, for example, expanding product descriptions, making the return policy accessible and prominent, or offering live support at checkout.
Helping customers understand the climate impact of their actions is proving to be helpful in combating returns wastage. Other efforts to battle waste from returns have brands using customer consciousness as a tactic to reduce returns. For instance, houseof embarked on a mission to end “throw away" culture, which South Pole supported by helping houseof introduce a carbon footprint calculation into their entire range of production.
An environmental awakening is long overdue. Developing a more sustainable approach to eCommerce logistics is not an easy task, but given the pace of industry growth, the clear business imperatives, and the looming climate crisis, an industry awakening is more critical than ever. From eCommerce brands and retailers to shipping services, many companies are taking much needed steps, but greater awareness and action are needed now.
Let's encourage leaders to approach the boom in eCommerce in a way that sees both business and natural resources thriving far into the future. With the right strategies and the will to change, we can collectively make eCommerce a driving force for climate action.
Meanwhile, don't hesitate to look at our solutions for climate ambition in ecommerce that empower you and your customers to take climate action at every interaction.
Turn ambition into action and join the transition with other businesses by looking at our solutions for climate ambition in ecommerce that empower you and your customers to take climate action at every interaction.