Before the Coronavirus pandemic, reducing carbon footprint had been high on the agenda of a large number of companies. Sustainability was a buzzword in logistics last year and looked set to increase its profile in 2020, but has this progress been derailed by the global health crisis? When it comes to the carbon footprint of retail distribution, the effects of COVID-19 will depend not only on the environmental budgets of major businesses, but also on the exact nature of the shifts we are seeing in consumer demand.
Surge in e-commerce
With lockdown and social distancing, the popularity of online shopping has soared. According to research by scientists from Radboud University in the Netherlands, the environmental effects of this shift in consumer behaviour will depend on the type of online shopping selected. Their study – published recently in the American Chemical Society's journal, Environmental Science and Technology – estimated the greenhouse gas emissions created by sales of FMCG goods in the UK.
The products studied were personal care and household products, which tend to be low-priced and purchased frequently – items that have traditionally been sold in physical stores, but which are increasingly being sold online. The research compared the carbon footprints of three different shopping channels – traditional ‘bricks-and-mortar’ shopping and the two main forms of e-commerce: ‘bricks-and-clicks’ (online ordering, with home delivery from a physical store) and ‘pure play’ (online ordering, with fulfilment via a parcel delivery company). In all three models, the researchers calculated emissions from transport, warehouse storage, delivery and packaging.
The study showed that the total emissions per item purchased from bricks-and-mortar retailers were higher than those from bricks-and-clicks retailers in 63% of cases, but lower than those from pure play retailers in 81% of cases. This can partly be explained by the fact that more items tend to be purchased in bricks-and-clicks orders than in-store, leading to a smaller carbon footprint per item, plus one vehicle bringing multiple deliveries to an area creates fewer emissions than all those consumers driving to the shops. And, compared to pure play orders, bricks-and-clicks deliveries tend to involve shorter delivery distances.
Electric cargo bikes
The research also identified ways in which carbon footprint could be reduced. Bricks-and-mortar consumers could reduce their footprint dramatically by walking or cycling instead of driving. They could also reduce emissions by ‘trip chaining’ – for example, shopping on the way to or from work. Online consumers could reduce their footprint by bundling purchases into one delivery (rather than having each item dispatched as soon as available) and buying as many items as possible from a single source. Pure play retailers, meanwhile, could cut emissions by 26% by switching from conventional vehicles to electric cargo bikes for the ‘last mile’ of delivery.
So, the effect of the pandemic on carbon footprint will depend on which e-commerce channels people switched to. The picture is mixed because both pure play retailers (notably Amazon) and bricks-and-clicks retailers (notably the online grocers) benefited from the e-com spike. The surge in online shopping is against a backdrop of increasing demand before the pandemic. According to Eurostat, 60% of EU citizens shopped online in 2019, compared to 56% in 2018 and just 32% back in 2009. This trend towards e-com is, in turn, increasing demand for intralogistics automation to enable warehouse operators to handle the different order profiles and delivery speeds more efficiently. Over time, this increasing use of automation – which features energy-efficient technologies, minimised material flows, maximised space utilisation and optimised drop sequences – is manifesting itself in the carbon footprint calculations.
The 50th annual Earth Day survey of 1,000 consumers by global consulting partnership, Kearney, indicates that the pandemic has not reduced demand for sustainable solutions; 48% of respondents said the pandemic had made them more concerned about the environment, and 55% said that they were more likely to purchase environmentally friendly products. It will be very interesting to see whether organisations continue to view sustainability as a means of developing relationships with customers and stakeholders to build resilience and value.