Sustainable positions under pressure – Retail Week - May 2015

In 2009, research by academics at Heriot-Watt University in Edinburgh found that home delivery produces 20 times less carbon dioxide than if a customer takes their car to the shops.

A couple of years later in 2011 and ecommerce had already become accepted as enviro-friendly, with three in four shoppers believing it to be so, according to an IMRG poll. Therefore, given that online shopping now accounts for £1 in every £4 spent, surely all’s well with the retail industry’s sustainability ambitions? Not quite.

Multichannel retailing has complicated matters. What if customers opt not for home delivery but click-and-collect instead? How will they collect their goods – in store using their car, or on the way home from a locker in the train station? What if the item is sent back? What packaging did the product arrive in and was it recyclable or, if it needs to be returned, re-sealable?

The first thing to recognise is that ecommerce has changed the method of shopping rather than the overall size of the market, says Martin Koehring, a sustainability expert in the Economist Intelligence Unit. ‘Multichannel retailing doesn’t mean that people shop more (which is seen as environmentally harmful), but they do shop differently,’ he explains.

Some of the environmental impacts have therefore been shifted around – most notably road miles. Many retailers have targets in place to increase the efficiency and, in turn, reduce emissions of their logistics operations.

But these improvements have been made largely during a period of a more simplistic approach to retail. Take food, for instance: for a long time supermarket chains would open their next big store and people would come and shop there. But that has changed – retailers have taken on a lot more complexity to make their convenience-hungry customers’ lives simpler, but the benefits will come.

‘If you were designing a supply chain from scratch, you wouldn’t build a load of shops, ask people to drive there and then take their purchases home with them, because it’s just not efficient,’ explains Nick Miller, Head of FMCG at supply chain consultant Crimson & Co. ‘You’d centralise things and deliver it to their homes.’

Multichannel retailing is forcing retailers to do just that and the direction of travel for fulfilment is faster and cheaper, while greener doesn’t offer factor. But Nick believes it should. ‘More could be made of home delivery in the sustainability piece – and that could help the image of multichannel retailers,’ he says.

Meanwhile, some retailers have been pushing greener final mile logistics for years. Online grocer Ocado offers an option for its customers to choose a green delivery – this flags up with a van is already booked for a drop off in the same are, allowing customers to ‘minimise the carbon impact of their delivery’. But if customers were offered a choice of delivery options – fastest, cheapest or greenest – which would they go for?

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