Why Sustainable E-Commerce Logistics matter?
Discover key challenges and solutions that could make your brand more sustainable, drive your business and build loyalty.
E-commerce is accounting for an increasingly larger proportion of the retail sector. Yet one of the biggest challenges facing the online industry is finding sustainable solutions for packaging, transportation and returns.
E-commerce packaging uses several billion trees a year for cardboard alone and tonnes of CO2 are being released into the environment as part of the returns process.
Customers demand action!
As statistical data shows, two thirds among Generation Z and the Millennials see the environment as priority in their shopping behaviour. Moreover, more than 8 in 10 EU citizens see the product's impact on the environment as a criteria when shopping online. The shift towards more sustainable shopping requests measures towards greener and more responsible options. Following this trend can boost your brand image and customer trust.
1. Packaging is oversized, expensive and unsustainable
The average shipment box is dropped 17 times during the shipping process. Therefore, retailers are doing everything to make sure the customer receives the product in perfect condition. In other words, over-packaging. According to a study on behalf of the Bundesverband Paket and Expresslogistik (BIEK), the packaging materials have increased by 37% in the last three years and shipping material caused 769,000 tonnes of waste in Germany.
Reusable Materials and Creativity are the solution
Reusable plastic crate produces 88% fewer carbon emissions than a single-use cardboard box and 64% fewer emissions than a box made of mixed materials. Players like Repack help you update your user experience with reusable packaging, which can be used over 20 times.
Additionally, a new packaging box suite (standardisation of packaging) that better fits shipment means less trucks, and a more efficient use of resources.
There is a great example led by Asket Company, that wants to reduce their environmental impact across the entire value chain. They have investigated limitations of reusable and recyclable solutions and found out that the most feasible and effective packaging solution would be to both remove and reduce the amount of resources used. Following a 12 month packaging overhaul project, they have managed to reduce packaging material by 22%, cut down CO2 emissions by 47% and reduce costs by 45%.
2. Parcel Shipping is one of the biggest contributors to Greenhouse Gas Emission
Shipments are broken down into individual delivery packages which are responsible for 15 million metric tons of carbon dioxide released into the atmosphere, due to transportation. In addition, courier collections have a 12% failure rate which makes emission up to 5 times higher.
First Things First: Avoid, Reduce, Compensate
A great example by DHL combines both methods: they started using electric street scooters and cargo bikes within cities, and compensate other emissions through investment in nature conservation projects.
Zalando, for example, gives its customers the opportunity to pay an extra 0.25€ per order for climate-neutral shipping. A survey from Idealo showed that 2 out of 3 customers are open to pay an extra fee for climate neutral shipping.
3. Increasing returns rates at the expense of your business and the planet
Bracketing or modern consumer behaviour means 51% of shoppers overbuy online, knowing they will return unwanted items. This makes return rates increasingly high. Worldwide, a total of 17 billion items are being returned each year. The impact on the environment has been heavily discussed and the pressure is on retailers.
Returns management and circular economy must be part of your business strategy
If You Haven’t Started, You’re Already Behind.
Holistic approach, in simple words, is looking at the product’s life cycle: packaging and design, logistics methods, and end-of-life management. Let’s focus on the last part of the cycle and how a product can live longer. Donations, second-hand market, repairing, product reuse and renting are a few examples of what can be done in order to avoid an item ending up in landfill.
Tools like 8returns gather and analyze data, which gives you valuable insights in spotting behavioral patterns or product errors. With that you can minimize returns and encourage changes in consumer behaviour.
It’s up to retailers to embrace smarter packing and logistics solutions to save money, minimize returns and fulfill customer expectations. That is the way your brand will be recognized and associated as a lead of the change.
It’s a step in the right direction. Join 8returns in the mission and do your bit for the planet!