Have you heard? Between now and 2030, the demand for last-mile e-commerce delivery is expected to almost double.
That’s pretty great for everyone selling and shopping online. For our environment, not as much.
Higher demand for last-mile delivery means higher environmental impact: more vehicles on the roads, increased emissions, and the inevitable rise of carbon footprint.
Given the forecasts, the pressure for more sustainable last-mile delivery options has been on the rise. And rightly so.
What is sustainable delivery, exactly?
In the e-commerce setting, sustainable delivery (also known as green delivery) refers to any means of transportation used to get goods from a merchant to a customer with the lowest possible environmental impact.
Even though green delivery is not a priority for all consumers (yet), there are clear signs of increasingly more shoppers demanding more from the available delivery options.
At the same time, it seems that online shoppers don’t necessarily know what “sustainable delivery” offered by different e-retailers means.
This can ultimately cloud their judgment, and we can’t keep blaming them for it.
“Companies should drive the change instead of waiting for consumers to start demanding it. That’s a big responsibility, which is why e-commerce businesses and solutions like Ingrid should lead the way.” — Anders Ekman, Co-Founder & COO at Ingrid
How online retailers can make last-mile deliveries green(er)
- Show and explain sustainable last-mile delivery options
- Offer multiple delivery methods
- Aim for parcel consolidation
- Rethink free shipping
- Consider sending orders from your brick-and-mortar stores
Show and explain sustainable delivery options
Carriers and e-retailers have not yet stressed enough the importance of sustainable last-mile delivery options.
Most e-commerce stores that in fact offer climate-neutral delivery options provide little information about them — usually a “greenish” logo, label, or badge.
For now, the change towards greener deliveries seems to be driven by younger generations who are concerned about the environment, and more often than not demand that governments and businesses take action.
But, this might as well be because there are many different delivery options to choose from (or are chosen by default), and it’s not always clear to see which are more sustainable than others.
Recently, a survey conducted by the Swedish carrier Airmee showed that many Swedes do not know the difference between different fuels, or their advantages.
Only 38% say that they know the difference between emission-free and fossil-free fuels, and the lack of awareness about which fuels are actually emission-free or fossil-free is greater.
Ultimately, online shoppers are able to make better choices if they are first educated about sustainable delivery options.
If you already offer climate-neutral delivery alternatives, make sure to highlight them in your checkout, as well as a shipping policy/FAQ page.
With SaaS delivery platforms like Ingrid, you’re able to integrate with carriers that offer sustainable deliveries, highlight and pre-select more sustainable delivery options, and even test which convert better.
Offer multiple delivery options
You might be surprised, but there’s no such thing as “the most sustainable last-mile delivery option”. The greenest delivery method always depends on the context.
As logistics consultant Martin Jungerts explains it in an interview with Columbus:
- Home delivery in cities could be the most eco-friendly since you can use bicycle or electric vehicles. At the same time, it could be the worst option in the countryside if you are delivering one package over a long distance. On the other hand, pick-up-at-store could be efficient, if the store is close to the customer’s workplace, but inefficient if the customer needs to take his or her car just to pick up the order.
What last-mile delivery options should you offer, then?
DHL GoGreen, GLS ThinkGreen, and DPD Zero are just a few examples of more last-mile delivery initiatives, but it’s not only the bigger players that invest in green logistics.
Local carrier companies are also stepping up their game, maybe even more so.
Take the Swedish carrier Airmee, as an example. Since the company was founded in 2018, the team behind it has worked towards finding the most climate-smart solutions in order to be able to deliver packages with the least possible environmental impact.
Today, the company has by far the largest share of electric vehicles making home deliveries in the logistics industry.
All transport, both the deliveries directly to the end customer and the transport of packages between warehouses and distribution centers, is already fossil-free. In addition, almost 50% of all deliveries are emission-free — and Airmee aims to reach 100% by 2025.
“Our platform enables us to automate climate-smart solutions for every route and delivery we make. It’s not just about using the vehicles that are best for the environment, but also about making sure that every drive is as efficient as possible to reduce any kind of climate impact.” — Julian Lee, CEO and Founder of Airmee in an interview for IT-Hållbarhet
As the first company in Sweden and the first delivery company globally, Airmee has also signed The Climate Pledge. The goal is to work together with other companies in a number of different industries to address and act on the climate crisis.
Aim for parcel consolidation
Regardless of the delivery method, consolidating orders into one shipment or one vehicle makes the whole process more sustainable. By doing so, you can reduce the amount of carbon emissions created per purchased product.
One of the solutions you can try implementing yourself is introducing no-rush shipping. When the orders are not time-sensitive, it can make the delivery promise greener, as you can wait for more orders to be consolidated and delivered to the same area.
Parcel lockers and pick-up points also help with consolidation and traffic congestion, and they get even more eco-friendly when carrier companies share the existing infrastructure.
“The message is clear. Parcel lockers are a more sustainable solution than home delivery, but the type of parcel locker network determines how sustainable.”—Andre Pharand, Managing Director (Consulting, Post and Parcel Lead) at Accenture
Speaking of, there’s also a pretty green alternative that we seem to forget about: good old mailbox delivery.
For e-comm brands that sell smaller items, this option in particular can be sustainable, low-cost, and convenient for online shoppers. Companies like Helthjem and Early Bird are already using the existing infrastructure and delivering orders with morning papers during the night, which also helps to reduce traffic congestion.
Rethink free shipping
Offering free shipping might seem like a no-brainer for online retailers. But, as good as it sounds — it can cause excessive and, often, unnecessary shopping.
It doesn’t seem to be the best option for most e-commerce merchants either, especially if the aim is to profit from the delivery experience.
As Anders Ekman, Co-Founder and COO at Ingrid puts it, there is a sweet spot where paying for shipping might mean selling fewer products, but still earning more. He explains:
— It was an idea that one of Ingrid’s customers experimented with. They began to charge 10 SEK more for the delivery. The result? The conversion decreased by 2.5% but the value of an average shopping cart increased by 4.2%. At the end of the day, revenue from deliveries alone increased by 11% and the profit margin increased by 5.5%.
Don’t be afraid to charge your customers and experiment with different shipping costs. The result is likely to be fewer orders, but more revenue and fewer unnecessary purchases from online shoppers.
Send orders from your brick-and-mortar stores
For many online shoppers, last-mile delivery has to be both fast and low-cost. Then, it also helps if it’s sustainable.
The best way to achieve this is by locating your inventory as close as possible to the customer, with multiple fulfillment centers and delivery stations near dense urban areas.
Like your physical stores, for example.
By using brick-and-mortar stores as “warehouses”, you can introduce shorter but more frequent delivery loops at less congested hours, and use greener, electric vehicles.
In fact, according to a report from Accenture, the last-mile supply chain made possible by local fulfillment centers could lower last-mile delivery emissions by 17–26% by 2025.
And that’s not the only benefit for the environment.
For retailers who own local stores and sell online, an even higher climate effect can come from reducing overproduction, waste, and the need for aggressive sales and discounts.
Martin Jungerts explains:
— By enabling store-to-door delivery, online retailers can suddenly make their whole total inventory available for the total market. Sure, they should ship locally whenever possible to reduce last-mile carbon emissions, but by being able to also ship certain products from a local store to a customer across the country, they will also match supply and demand much better, thus reducing the need for both local and central safety stocks across the full assortment. I think this is a great example of how smart logistics can be used to make companies more sustainable and profitable.
At Ingrid, we support merchants in using their brick-and-mortar stores as fulfillment centers, both for last-mile logistics and as pick-up points across the globe.
If you’re curious to see how it works in practice, one of the brands that excelled at making the delivery promise greener and faster with Ingrid In-store solution is Nudie Jeans.
Instead of shipping all the way from their warehouse in Sweden with an international courier, Nudie Jeans transitioned to an in-store solution to turn stores into mini-warehouses and fulfill web orders directly store-to-door.
This doesn’t only speed up the delivery process but also allows the merchant to work with local, carbon emission-free carriers like HIVED.
Currently, local Nudie Jeans stores fulfill 30% of web orders in the UK, Australia, Germany, the Netherlands, and Sweden, and there are more markets to come.
Green logistics to the rescue
Reducing the environmental impact, meeting customer expectations, and driving conscious consumerism — online retailers have the opportunity to do it all.
It’s now up to you to shape the future of sustainable e-commerce and support consumers in making informed purchase decisions.
If you need any help once you’re at it, forward-thinking carriers and solution providers like Ingrid can help you use green delivery to everyone’s advantage. We’re ready when you are.
Originally published at https://www.ingrid.com/blog.
