Sustainability in e-commerce: How can online retailers make their business greener?
Published on: March 25, 2020
Updated: August 29, 2023
Shopping online is quick, easy and uncomplicated. Plus, there’s an indescribable satisfaction from being able to browse stores from the comfort of your own home and have the items delivered the next day to your front door. Sadly, this convenience is often at the expense of the environment. Recent reports show that Amazon emits nearly as much carbon dioxide as a small country and nearly a third of the solid waste in America comes from e-commerce packaging.
As a nation we are buying more online than ever – it’s predicted that half of all sales will be made online by 2028, with the percentage even higher in fashion. Indeed, younger age groups are less likely to shop locally than people over 55. The distribution, packaging and returns of online goods is a major contributor to carbon emissions. For this reason, making online shopping more sustainable is paramount, not only for retailer success, as the general public become more eco-conscious, but more importantly for the fate of our planet.
Items are often packaged individually in small plastic bags, small products are delivered in huge packages, the same order is delivered in multiple packages or the same item is ordered in multiple sizes. Every day, thousands of delivery trucks drive throughout the UK to deliver parcels and bring returns back to the retailer. This creates tonnes of carbon emissions. For this reason, online retailing needs to be rethought.
Retailers are shipping goods with excessive packaging (Source: Buzzfeed)
Interest in sustainable products
Climate change and sustainability is now an unavoidable topic (and rightly so!). Retailers and consumers are becoming increasingly aware that we need to be protecting the environment, not polluting it further.
This is not unachievable for retailers either. Many brands are already leading the way, producing goods sustainably with environmentally friendly materials and shipping. However, currently these products are often more expensive than their less-sustainable counterparts, due to fairer pay for employees and the use of higher quality materials. Sadly, for some customers these higher price points of sustainable products are usually too much.
In a study conducted by Deloitte in 2017, Millennials were asked ‘Before purchasing from a luxury brand do you make sure it is a sustainable and ethical brand?’ The survey found that 67.1% of those surveyed either sometimes or always check a brand’s sustainability. This shows a huge level of eco-consciousness within young consumers that will have only grown since the survey was conducted.
Almost 70% of consumers surveyed said they care about whether a brand is sustainable and ethical.
(Source: Deloitte/Statistica, 2018)
Solutions for sustainability in online retail
So how can sustainability be improved in online retail, at the same time as retailers remaining profitable? Brands and retailers need to be careful not to greenwash. They should be transparent and disclose their sustainability plans, rather than making false promises and creating misleading advertising.
Greenwashing: When a company or organisation spends more money and time on marketing themselves as sustainable than on actually minimising their environmental impact.
In an ideal world, all online retailers would completely overhaul their processes and become carbon neutral tomorrow. However, this is not realistic. That being said, there are many ways that retailers can work towards becoming greener quicker as part of their overall sustainability plans.
Tips for online retailers
We’ve consolidated some top tips for how retailers make online shopping more environmentally friendly.
Offer choice of greener shipping
Some delivery carriers offer more environmentally friendly shipping options. Companies such as Green Courier and DPD offer more sustainable options, using bikes and electric vehicles to deliver parcels.
Carriers have invested greatly in making their inner-city deliveries more eco-friendly. For example, DPD won the Green Apple award for being the most environmentally friendly city-centre delivery company.
By offering customers the choice of greener shipping options, retailers can ensure their carbon footprint is reduced. Or go one step further and offer a fully green fleet of delivery services.
Retailers should be working towards carbon neutral delivery.
Ditch the plastic packaging
Online goods often arrive in plastic, both the outside packaging and the individual items. Retailers should learn from Zara, who went completely paper and plastic free a few years ago. Items are shipped in a recycled cardboard box and are not individually packaged, reducing the amount of waste produced massively. These boxes can then be reused for storage or easily recycled.
Retailers need to remove unnecessary plastic packaging.
Use reusable packaging
Another possibility is to reuse packaging. For example, Ted Baker sends parcels in cardboard boxes with a card slip around the outside. This slip is where the label is attached and once removed, the inner box can be reused time and time again. This is a great example of a retailer who is trying to make returns more sustainable. If a customer returns their parcel in the original packaging, Ted Baker can reuse this box for a new order, simply adding a new slip.
Ted Baker uses a removable slip so packaging can be reused time and time again.
Ban returned goods being destroyed
Internet giant Amazon made headlines as it was reported that they destroy many returns instead of repackaging them. Sadly, Amazon are not the only business that do this, as it is often cheaper for the company to throw the return away rather than reselling it.
There is obviously a massive environmental impact in doing this, with these items often going into landfill. Companies should therefore rethink their returns process and stop the process of destroying perfectly functional goods.
Do not offer free returns
Returns currently cost retailers £60 billion a year, with fashion retailers seeing the highest level of returned goods: 56%. The cost to the environment is even greater. Indeed, in the US, returns create 5 billion pounds of landfill waste and produce 15 million tonnes of carbon emissions annually. This is equivalent to the amount of rubbish produced by 5 million people in a year.
Many online retailers offer free returns. As a result, customers often order more than they are planning to keep. Research by Barclaycard found that 30% of shoppers purposely over-order and then return unwanted items. So, if retailers removed free returns, customers might think twice before ordering additional products.
Retailers should consider charging for returns to combat serial returners.
Stop using large packages for small items
How many times have you received a parcel and wondered what on earth is inside such a big box? You order a phone charger for example and you’re presented with a box the size of your laptop.
Online retailers often use standard box sizes to ship all goods, filling the free space with packing materials. This not only means that additional, unnecessary packaging is included, but also the package itself takes up more room in the van, meaning less parcels can be delivered in one go.
Retailers should therefore ensure they are shipping products in correctly sized boxes. Amazon now requires vendors to use less packaging.
Create detailed product descriptions
By investing time in creating detailed product descriptions alongside high-quality photos, online retailers can minimise high returns. The more precisely the product is described, the better customers are able to guarantee the item will fit. Retailers can even go one step further and implement augmented reality tools such as ASOS’s ‘See My Fit’, which allows customers to virtually see the item on different body types and heights.
Asos is trialing AR tool ‘See My Fit’
Often orders are sent in more than one shipment. This can be due to items being available from different distribution centres or items being available at different times. Where possible, retailers should avoid sending an order in more than one package or give the customer the option to wait a little longer and consolidate their parcels. The more retailers are educating their customers on the environmental impact of their purchases, the more likely they are to choose these more sustainable options.
Tips for customers
It’s not only retailers that need to take responsibility for their carbon footprint, but also the customers who are buying from them. We’ve put together top tips on how customers can be more sustainable when shopping online.
Try to avoid express delivery
Many customers do not realise how unsustainable express delivery can be. As the retailer has to get the parcel to the customer as quickly as possible, often vans are not fully loaded when they leave the distribution centre. However, if standard shipping is chosen this risk is mitigated and carriers are able to deliver multiple parcels on the same trip, significantly reducing the last mile carbon footprint.
First attempt delivery a must
The majority of delivery carriers will make a second delivery attempt if the customer is not home the first time. This effectively doubles the carbon emissions of the delivery. Therefore, if a customer knows they will not be able to receive the parcel, they should redirect it to a parcel locker, their local post office or specify a preferred neighbour.
Customers should try to be home to receive their parcel on the first attempt.
Assess personal environmental impact and make right decision
There is much discrepancy about whether online shopping is more damaging to the environment than shopping in store. Research shows that for those customers who live within 3 miles of a store, click & collect is a much more eco-friendly shopping method. However, if this distance increases, the emissions from the car they will likely use to go to the store outweigh those produced by the home delivery carrier, making online shopping greener. Therefore, customers should consider which option applies to them and shop accordingly.
Avoid trying before you buy in store
Customers sometimes go to store to try on items, before going home and purchasing them online. This is doubling the amount of emissions produced from the order. Customers should avoid doing this, even if they will save a few pounds, as they are costing the environment much more.
One thing is certain: online retailers need to change if they are going to become more sustainable. These changes will not happen overnight, however implementing their sustainability strategy should be of the highest priority. Those retailers that are becoming more green are likely to be more successful as customers seek out eco-friendly retailers to shop from.