Shopping online reduces carbon emissions compared to shopping in-store.
Ordering online and receiving your package seems almost miraculous when you estimate the needs: e-logistics, logistics, transport, planned routes, deadlines, etc. E-commerce reduces carbon emissions by up to 3 times compared to purchasing in-store, according to recent MIT study. The process that an order requires before arriving at its destination is complex. Each improvement can improve its competitiveness, reduce costs, shorten deadlines, but also reduce the quantity of carbon emissions. Our purchasing behavior, when we buy a product on an online e-commerce site or at a store (a physical point) and we go there, largely determines the quantity of CO2 emissions. The delivery method, either at home or at a relay point, also influences the carbon rate. However, there are many more factors at play.
A site, a e-commerce site or a Intranet e-shop have the advantage of offering 24/7 access, to check the stock availability of a product, to benefit from reductions (coupons), etc. Some of these benefits combine when we visit an e-commerce site to see product availability, but go to the store to purchase it.
In-store purchase
When purchasing in-store, almost ¾ of carbon emissions are emitted during transport. The 2nd emission emitter is that of the property for around 18%, that is to say the store, with its heating, air conditioning, lighting, etc. Customer returns and packaging account for a smaller share (7% for returns and 4% for packaging). Let's take a concrete case to analyze this data. We browse the e-commerce site of a department store and discover one product, then a second. They are in stock in the store. I can possibly buy it and collect it via Click & Collect (which is similar to e-commerce). But let's stick with a classic scenario where I go to the store to see the products, then buy them and take them home.
In this case, the products I purchased were transported, most often by cargo ship if they came from abroad (or the parts that were assembled in the country), possibly by train, then by truck. These transports are largely similar to e-commerce transport. However, the store requires a physical location close enough for the customer to get there.
Urban infrastructure plays an important role in carbon emissions. Is it easy to get to the center (if the store is in the center and not on the outskirts)? Are the means of public transport available, safe, pleasant and does the energy come from a renewable source? Going on foot to collect your package represents a reduction of 70% compared to e-commerce. But this situation is only possible for certain stores in a well-planned or small town. Or the client is wealthy and lives in a privileged neighborhood. Of course, the package can't be too big either. Going to the store in an electric car can reduce your CO2 emissions by almost 40% when making a purchase. A hybrid vehicle reduces emissions almost as much.
These cases clearly represent the complexity and our behavior when making an in-store purchase. Urban planning, the type and frequency of the store, the type of vehicle, as well as public transport can quickly determine customer behavior and their amount of carbon emissions.
Order on an e-commerce site or an Intranet e-shop
Let’s compare this data with e-commerce. When purchasing online and delivering to your home, around 45% of emissions are due to packaging. The 2nd factor is customer returns which represents more than 25%. Emissions emitted from warehouses and transportation are almost equivalent: 15% for property and 13% for transportation..
For example, you browse an e-commerce site, choose two products that you order and have delivered to your home. In this case, the fact of having ordered several packages reduces carbon emissions by 30%. If a solution existed for packaging, it would reduce emissions by an additional 36%. Restricting returns would represent 13% and a solution for the last mile would decrease by 10% (assuming that you collect your package at the relay point). In this situation, once your purchase is made, collecting your package on the way back brings a benefit in terms of carbon reduction because you eliminate a journey. But again, this is possible with a distribution of relay points in the city center and on the outskirts and at transport hubs.
E-commerce, town planning and energy
These factors play an important role for the future of e-commerce and in-store purchasing. If the retailer electrifies all of its processes (with a solar – hydroelectric alternation for example), the e-commerce will also have to electrify its vehicles to remain competitive in carbon emissions.
Efficient urban planning, with nano-hub solutions at the entrance to cities as well as relay point solutions for the last mile also considerably reduce carbon emissions. And even more so, if the customer collects their packages on the way back. Buying several products at the same time also contributes to the impact on the climate. 3D augmented reality appears to reduce customer returns, but it is a recent technology and the perfect solution is still lacking for e-commerce packaging.
E-commerce and in-store purchasing in the near future
Certain factors are clarifying our horizon. E-commerce is recent. So is the electrification of vehicles (private and commercial). The environment is competitive. We are much more aware of our carbon emissions and our impact on the environment. However, some strategies to reduce our emissions are more complex. Indeed, the distribution of department stores, the vast choice on e-commerce sites, urban planning, the logistics of nano-hubs on the outskirts as well as the number and location of relay points, the electrification of vehicles, public and road transport hubs, etc. are all factors. Some are simpler to implement, while others require more intense urban planning. The question of access to renewable energy, solar, hydroelectric and hydrogen remains a most important factor. As customers move toward fewer, more sustainable purchases, energy will play a crucial role in the coming years.
E-commerce and carbon emissions