E-commerce has transformed how we shop, offering convenience and access to products from around the globe. As we journey into the holiday season, many consumers will use e-commerce to shop for family and friends. E-commerce will continue to grow with the market expecting to total over $7.9T in 2027. However, the environmental footprint of e-commerce is significant and it continues to grow. The environmental costs of moving goods from manufacturers to consumers contribute to the carbon footprint of every product sold online. Understanding the impacts of manufacturing, transportation, packaging, and returns is crucial for a sustainable e-commerce industry growth.
A Life Cycle Assessment (or Life Cycle Analysis), LCA, measures the environmental impact of a product at all five stages: raw material extraction, manufacturing, transportation, usage, and disposal. Businesses can understand the entire Product Carbon Footprint of their product and identify key areas of opportunity to reduce environmental impact. The difference between e-commerce and brick-and-mortar will impact several of these stages, but focus is often on the impact to the transportation stage. The transportation stage of an LCA incorporates all aspects of transportation involved for a product from its inception to its disposal.
The Journey of a Product in E-Commerce: First Mile, Middle Mile, and Last Mile
To understand the environmental impact of e-commerce, it’s essential to break down the three main stages of product delivery:
First Mile: This involves moving raw materials or finished products from manufacturers to distribution centers or fulfillment warehouses. The first mile is often an international journey, relying on ships, planes, and trucks, and is responsible for a significant portion of the product’s carbon footprint.
Middle Mile: The middle mile refers to the transportation of goods between warehouses, distribution hubs, and sorting centers. While this stage often involves bulk shipping, which is relatively efficient, the distances traveled can be vast, especially for global e-commerce platforms.
Last Mile: This is the final leg of the journey, where goods are delivered from a local warehouse or distribution center to the consumer’s door. The last mile is highly individualized as the deliveries must reach the consumer’s destination which can lead to complexities in logistics and must meet customer expectations.
Key E-Commerce Challenges: More Emissions, Less Efficiency
Online Shopping: Fewer Items per Transaction
One significant difference between e-commerce and brick-and-mortar shopping is the number of items purchased per transaction. When shopping online, consumers often order a smaller number of items, which increases the frequency of deliveries. Each delivery requires its own packaging and transportation, leading to higher emissions.
In contrast, when consumers visit a physical store, they tend to make larger purchases, often buying multiple items in one trip. This helps reduce the environmental impact per item, as only one trip to the store is required, and there’s less need for excessive packaging.
The Carbon Cost of Consumer Trips to Stores
While brick-and-mortar shopping involves emissions from consumers driving to and from stores, it can still be more efficient than e-commerce in some cases. A single trip to the store where multiple items are purchased is often less carbon-intensive than the equivalent number of individual deliveries made to a consumer’s home.
However, the environmental benefits of in-store shopping can be diminished if consumers make frequent trips for forgotten or single items. A consumer driving to the store multiple times for small, single purchases may end up generating more emissions than if they had consolidated their shopping into fewer trips or ordered online in bulk.
Shipping Things Together: The Key to Reducing E-Commerce Footprint
Consolidating Shipments for Greater Efficiency
One of the most effective ways to reduce the environmental footprint of e-commerce is by shipping multiple items together. Shipping things together helps in two key areas:
Reducing Last-Mile Trips: Combining several items into a single delivery cuts down on the number of delivery stops, reducing fuel consumption and vehicle emissions.
Lower Packaging Waste: Fewer boxes and packaging materials are needed when multiple products are shipped together, cutting down on overall waste.
For retailers, consolidating shipments also offers operational benefits. It reduces the need for packaging, labor, and delivery costs, as well as minimizing wear and tear on delivery vehicles.
Consumer Choices: Grouping Orders and Choosing Slower Shipping
Consumers play a critical role in reducing the e-commerce footprint. By grouping purchases together instead of ordering items separately, customers can cut down on packaging waste and reduce delivery-related emissions. For example, Amazon displays information that lets consumers know if items ship together or with other recent orders. Similarly, other e-commerce companies may offer the option to ship items together instead of separately. Additionally, opting for slower shipping options allows retailers to group deliveries and transport them more efficiently. This reduces the carbon footprint compared to rush orders that rely on air freight or more frequent deliveries.
Sustainable E-Commerce vs. Brick-and-Mortar
The debate between e-commerce and traditional retail in terms of environmental impact is complex and depends on several factors.
Packaging and Waste
E-Commerce: Online shopping tends to require more packaging because individual products are packed for shipping, often using plastic, cardboard, and protective materials. Over-packaging is a common issue.
Brick-and-Mortar: Products sold in physical stores typically require less packaging since they are shipped in bulk and displayed on shelves. Customers carry their purchases in reusable bags or minimal packaging.
Transportation Emissions
E-Commerce: The emissions from last-mile delivery and returns can make e-commerce more carbon-intensive. The frequent need for fast, individual deliveries adds to the environmental burden.
Brick-and-Mortar: Consumers generate emissions from driving to and from stores, but they often consolidate trips and buy multiple items. This makes it potentially more efficient per item compared to e-commerce last-mile delivery.
Ultimately, the sustainability of each model depends on factors like the frequency of orders, distances traveled, and how items are packaged and transported.
What Can Your Company Do to Reduce E-Commerce’s Environmental Impact?
Smarter Inventory Management and Fulfillment Centers Retailers
Streamlining inventory can improve efficiency in the middle mile and warehousing stages by optimizing their inventory and fulfillment strategies.
Localizing Inventory: Store products close to where they are likely to be purchased. This reduces transportation distances and emissions.
Energy-Efficient Warehousing: Implement renewable energy solutions and smart lighting, heating, and cooling systems in fulfillment centers can lower the carbon footprint of warehousing.
Reducing Returns
Many e-commerce returns are driven by customer dissatisfaction with sizing or product appearance.
Better Product Descriptions and Virtual Tools: Offer more detailed product descriptions and use tools like virtual try-ons. Retailers can reduce the volume of returns, lowering the environmental impact of reverse logistics.
Encouraging Fewer, Larger Orders: Some e-commerce platforms offer discounts or incentives for consumers to make larger purchases. Ordering single items requires a higher shipping frequency and packaging waste.
Optimize Product and Package Design
Product development can have a significant impact on packaging needs and requirements.
Optimized Product Design: Create products that require less packaging in general, and when shipped which can save space. Durable products that can withstand transportation will reduce the need to replace damaged goods.
Efficient Packaging: Packaging that requires less material can save on sourcing and production costs. Additionally, packaging that best fits the product can lower the need for extra protective packaging during transportation.
Greener Deliveries
Streamlined routes and delivery systems can help reduce last mile emissions, but the mode of transportation can also make a difference.
Route Optimization: Creating efficient delivery routes can reduce vehicle emissions as well as save the company time and money. Efficient delivery routes can reduce fuel optimization, reduce contribution to traffic congestion, and increase customer satisfaction.
Electric Vehicle (EV) Adoption: Utilizing new technologies to deliver products can help reduce transportation emissions. Transitioning delivery fleets to vehicles that run on clean energy can reduce vehicle emissions. Utilize company owned vehicles or partner with couriers that have sustainable delivery options.
Ensure Compliance with Government and Policy Interventions
This can play a role by introducing regulations that encourage sustainability in e-commerce.
Packaging Standards: Mandating the use of recyclable, compostable, or reusable packaging can significantly reduce the waste associated with online shopping.
Carbon-Neutral Delivery Incentives: Policies that encourage the use of electric vehicles for last-mile delivery, or tax incentives for companies that adopt greener logistics, can further reduce e-commerce emissions.
The Future of Sustainable E-Commerce
E-commerce is here to stay, but its environmental impact can be minimized through innovation and conscious efforts from both businesses and consumers. As e-commerce continues to expand, companies must take decisive steps to achieve sustainable e-commerce within the growing industry. Key strategies include: optimizing logistics through the adoption of electric vehicles for last-mile deliveries, implementing smarter route-planning technologies, and localizing inventory to reduce transportation emissions.
Sustainable packaging is also critical—businesses should transition to recyclable, compostable, and reusable materials. They should also adopt right-sizing techniques to eliminate over-packaging. In addition, leveraging technology like virtual try-ons can minimize return rates, reducing the environmental and operational costs of reverse logistics. Offering slower, eco-friendly shipping options and promoting bulk or grouped orders can also encourage more sustainable consumer behavior.
As consumer awareness grows, sustainability is a business opportunity. Consumers are increasingly drawn to companies that demonstrate environmental responsibility. Businesses implementing sustainable practices can enhance brand loyalty, reduce operational costs, and stay ahead of regulatory changes. By focusing on greener logistics, packaging, and consumer engagement, retailers can reduce their product footprint while still offering the convenience of e-commerce.
Next Steps: Make Progress Towards Sustainable E-Commerce
CarbonBright’s AI-powered LCA software helps organizations accurately measure emissions and meet regulatory standards—at a fraction of the time and cost of traditional methods.
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