Insights
Nov 20, 20186 min read

Is your webshop harming the environment?

by Klarna.com

Would mother Earth be worse or better off if your products were sold in physical stores? The consensus from scientific research is, well... it depends.

Depends on what, exactly? Henrik Pålsson, associate professor of packaging logistics at Lund University, recently published a meta-study titled “Energy consumption in e-commerce versus conventional trade channels”.

“You need to look closely at six different factors to understand the environmental impact of e-commerce compared to conventional trade,” he says.

“The factors are the transport of goods, the consumer journeys, the packaging, the energy consumption in buildings, the proportion of product returns, and the proportion of unsold or damaged products.”

If you run a web store and are convinced that your particular business is better for the environment than a conventional store would be – or perhaps you’re sure it’s worse – you might be mistaken. The environmental impact is not that black or white.

 

“Difficult to see the full picture”

“In general, the net effect of energy consumption in e-commerce was positive in the majority of the16 specific cases I studied. But it’s challenging for an individual business to intuitively ‘know’ its impact because you need to see the full picture.”

Let’s say you – or someone you know – had a business in the 90s selling relaxing meditation CDs off the shelves. Now, you make those same meditation tracks available as digital downloads. It’s quite safe to say your e-commerce business means a positive change for the environment. No transport is needed; neither are the plastic cases. (You could argue it takes energy to run your website and store those digital files, and that is true, but those energy costs don’t move the needle very much.) However, for most online businesses the environmental impact is harder to evaluate.

Let’s take online grocery shopping as an example.

“Online grocery shopping has the potential to be great for the environment, on the condition that delivery vehicles are fully loaded, the routes are optimized, and these orders replace consumer shopping trips. That’s mostly not the case, not yet,” says Malin Henriksson, who has led a three-year research project at VTI, the national road and transport institute of Sweden, focused on the effects of increased e-commerce in the grocery market.

 

Additional transport

Many of the people interviewed by her research group reported they still go to physical grocery stores “several times a week” to buy additional items like milk, avocados, meat, snacks, or other items  – a habit that is upholding the total number of trips to the grocery stores.

The research also revealed some unexpected consequences of grocery e-commerce:

“When people save time by buying their groceries online, they suddenly have more time to do other activities, so they can end up driving more than before, not less. On the other hand, other people see online grocery shopping as a way to keep living a car-less lifestyle, even when they have kids,” says Malin Henriksson.

Now, let’s look at your business. What impact does your particular web store have, both negative and positive?

 

Becoming more aware of the environmental impact of your e-commerce store

By reading through the two lists below – one filled with examples of when e-commerce is beneficial for the environment, and another for when it’s not – you’ll become more aware of the different elements of your webstore that affect the environment. Ask yourself these questions:

  • How can we improve our environmental impact in this area?
  • How can we encourage or reward our customers to make more environmentally-friendly decisions? (For example, mention on your website that the 3-day home delivery option is better for the environment than delivering the same day, because of logistical optimizations).

 

The environment loves …

… online display of products. Products are available for “window shopping” via the internet 24/7 now. Back in the day, people drove to a shopping center just to browse the new arrivals.

… digital products. Nothing to transport.

… efficient transport from store to the customer. Environmental-friendly, fully loaded delivery vehicles (preferably electric ones) driving along an optimized delivery route. Instead of customers needing to make individual trips.

… many items ordered at once. Rather than frequent small orders.

… mindful purchases. Shopping that doesn’t lead to regrets, over-consumption or waste.

… local consumerism. Distribution is usually more efficient if a German buys from a German online store, rather than from Wish (China).

… e-commerce optimized packaging. When products don’t need to be displayed in physical stores, the packages can be optimized for transport and materials chosen based on their environmental impact. Reducing airspace and packaging materials are examples of eco-friendly actions.

… buying guides. They can help customers to make the right choice the first time (size, color, etc.), thus reducing the number of returns.

 

The environment doesn’t enjoy …

… spread out purchases. After a few hours of browsing Instagram and online fashion stores “Lisa” has purchased from five different stores, resulting in five packages being sent out, distributed on five different vehicles going all the way to her door, or to a pickup place.

… many returns. It turns out “Lisa” wants to try a different size and color for two of the items. In the days of shopping in a physical store, this would have been dealt with right away at the fitting room. Now, “let’s try another size” leads to a few rounds of vehicles driving back and forth until Lisa either settles on something she’s happy with or decides to send everything back.

… customers using their car to either pick up or return their online purchases. It cancels out some of the environmental benefits of online shopping.

… wasted products. Products that are thrown away because they couldn’t be sold.

… damaged products. Poor packaging or handling of products has a negative impact on the environment if a new product is needed as a replacement.

… “exclusive” home deliveries. Cars being sent out just to deliver to one address is not efficient. If the delivery is done by bike or some other eco-friendly means, it’s another story.

… many large buildings (stores or warehouses). Heating or cooling these buildings use energy.

… low-quality products. Those are more likely to be thrown away quickly, impacting the environment in a negative way.