Delivering Sustainability 2:
Will 2022 finally be the year of sustainable delivery?
“Consumers have shifted to online. For good.”
*This blog was written by Luke Theissling, Head of Sales at Paazl and is a follow-up to the original article that appeared on LinkedIn.
Last year I wrote an article about some of the things brands & retailers can do to become more sustainable. From influencing people’s shopping behaviour to preventing missed deliveries, from smarter packaging to decreasing their customer’s returns and – obviously – by offering green(er) shipping methods. A lot has happened since then: the world has seen more lockdowns and we’ve even seen a second Black Friday week without shops being open (in some parts of Europe and North America).
Consumers have shifted to online, for good.
The effect on (online) shopping has been enormous. According to research conducted by RetailX, 78% of consumers have shopped more online since the pandemic and much of that shift is predicted to remain, with 87% saying they will continue to shop online after the pandemic. At the same time, 81% of consumers had more negative delivery experiences, fewer delivery options were offered and many of the products ordered were delivered later than promised, which could have resulted in lost customers and irreparable brand damage.
There was also good news, excellent news – if you ask me. Sustainability is still top of mind for most consumers. According to the research, 57% of shoppers are willing to pay more for sustainable delivery and 32% of shoppers value sustainability more than practical factors like cost and speed.
A report from PostNord confirms that many consumers are willing to pay extra for more eco-friendly delivery, but is it fair to put the responsibility of reducing the carbon footprint of the e-commerce industry in the hands of the consumer? Probably not. Here are some things to consider:
First of all:
Most of the wins can be achieved in the first-mile, not in the last-mile of the delivery. Dutch journalist platform De Correspondent published an article about the myth of free shipping in which they investigated how it is possible that products are delivered for free while they are manufactured and shipped to consumers on the other side of the planet. They found out that there’s a world of exploitation, pollution, and disguised subsidies behind our free deliveries. Paid by taxes and paid by the planet. So, the first step in making delivery sustainable is for brands to rethink their manufacturing locations and for consumers to be very critical of where to buy their products.
Even though more and more consumers value sustainability more than cost & speed, and are willing to pay extra, a report from Ecommerce Europe tells us that there is a gap between attitudes and behaviour, and that many consumers struggle to turn their sustainability priorities into purchasing decisions.
It sounds obvious, but communication is key.
One of the reasons that consumers struggle with this, is simply bad communication about the impact of their choices. The Ecommerce Europe report says that “any information meant to empower consumers needs to be accessible, understandable, but also comprehensive. This means that initiatives aiming to inform consumers need to consider the risk of over-burdening and obligatory information streams that, in effect, do not inform at all.”
The solution is simple: make sure to offer very clear information about the environmental impact of deliveries at the selection of delivery options in the checkout, including ETA’s to let consumers understand when slower delivery is the greener option. Pre-selecting the most sustainable option is best, helping consumers to make a greener choice.
Options to Consider
For each brand or retailer, the most sustainable option depends on its context. It depends on the location of the consumer, the location of the warehouse, the carrier, the delivery method, and all of these factors, combined with the shopping behaviour of the consumer, can differ per country and culture. In general, we can say that delivery by bike is carbon neutral, but this is only possible in certain regions. Delivery at a pick-up point is considered to be a more sustainable option, but not if individual consumers all have to travel by (non-electric) car to pick-up their parcels. Therefore, it’s important for brands & retailers to decide for themselves what selection of options works for them and what is achievable in terms of cost & operations.
I work off the assumption that all carriers are working on making their fleet carbon neutral, but here are a couple of options we see growing rapidly and might be interesting to consider for your e-commerce delivery strategy:
1. Parcel Lockers
A number of carriers have been offering them for some time, but in 2021 we saw a huge increase in the installation of parcel lockers across Europe. InPost, for example, has increased their capacity in their home market by 50% and announced a partnership with Tesco, aiming to have 10.000 lockers in the UK by 2024. Instabox, from Stockholm, who entered the Dutch market through the acquisition of Red Je Pakketje earlier this year, is growing 300 percent year-on-year and just announced plans to enter the German market. And Budbee, also from Stockholm, installed their parcel lockers in 13 of the largest H&M stores in the Netherlands.
2. Bike Couriers
Whether this option works for a brand or retailer really depends on their region and location, but if it’s possible to offer this, they’re offering the most sustainable option for planet earth. There are more and more local courier companies that offer delivery by bike, and they are often combined with the existing networks of companies such as Stuart in the U.K, France, Spain, Portugal, and Poland. Packaly from the Netherlands launched in Belgium plus in a couple of cities in Germany, and the parent-company of Fietskoeriers.nl just entered a strategic alliance with the largest online retailer in the Benelux. But don’t forget to check out the existing parcel networks from DHL, FedEx or other existing carriers that are heavily investing in delivery by bike.
This is not really a shipping option but it’s worth communicating with consumers that their product will be shipped from a local store instead of a central warehouse further away if that’s the case. A lot of the time, ship-from-store is combined with delivery by bike, but it doesn’t have to be. You should however take into account that you need inventory information from your stores to make ship-from-store possible, and that implementing this concept is different from just adding a new carrier -or delivery method.
Will 2022 finally be the year of sustainable delivery?
To be honest, we don’t know. I certainly hope so, but even though more brands & retailers appoint Corporate Social Responsibility Officers, more companies invest huge amounts of dollars to reach their climate targets and that we have CEO’s saying that ‘there’s a special place in hell’ for those who are not combating climate change, we haven’t seen a huge effect on the last-mile delivery methods yet…
Paazl is a leading shipping service provider (SSP) for brands & retailers in e-commerce. Its all-in-one, multi-carrier platform unburdens the delivery process across webshop, warehouse, customer service and returns. Paazl enables logistical flexibility, consumer loyalty, cost transparency and (inter)national growth. Customers include industry leaders such as G-Star Raw, Rituals, VanMoof, Tag Heuer, Leenbakker and Under Armour.