Transporting products and goods from one place to another generates a substantial carbon footprint and can result in poor air and noise quality, this impacts local ecosystems and communities. If retailers want to commit to sustainable practices then they need to ensure that their logistics transportation is efficient. Efficiencies within the transportation and deliveries system will reduce emissions, increased margins, and lead to happier consumers.
The rise of e-commerce and online retail has led to a sharp rise in deliveries and transportation and a change in consumer behaviour. However, despite wanting more items delivered through their doors, consumers also increasingly want their purchasers to have minimal impact on emissions and waste. Items sent separately without being clustered into one delivery can produce up to 35% more emissions. As retailers respond to consumer demand they also need to be mindful of the impact of their operations on local communities.
One of the biggest environmental challenges for retailers is product deliveries and partial deliveries. According to a Bain and Company study, if partial deliveries were reduced and every delivery was of twice as many products then this would reduce emissions by 30%.
Challenges Retailers Face
Retailers face the challenge of meeting increasing consumer demand for products and deliveries, whilst decreasing their emissions. Most retailers want to make deliveries and logistics transportation more sustainable and are channeling funds into their sustainability targets. The logistics of fulfilling orders has to be balanced with the environmental footprint. Retailers have already recognised identifying and eliminating inefficiencies in logistics transport is good for business. It not only reduces costs but also meets consumer demand for more sustainability. CapGemini research has found:
- > 68% of consumers who purchased non-sustainably produced products were willing to purchase a more sustainable product once they were made aware of the sustainability issues.
- > 53% of consumers overall and 57% in the 18-24 age group have switched to lesser known brands because they were sustainable.
- > 79% of consumers are changing their purchase preferences based on social responsibility, inclusiveness, or environmental impact.
In addition to this, Forrester found that 52% of consumers factor brand ‘values’ into their purchase choices. BCG report that 75% of consumers rate sustainability as important or very important in their selection of a brand to purchase from. These insights highlight the important shift in consumer behaviour towards eco-friendly values.
One of the main challenges retailers face when decreasing their logistics emissions is being able to evidence reductions. With 49% of consumers saying they do not have any information to verify the sustainability claims of products, and 44% say they do not trust product sustainability claims, businesses need to focus on ensuring they have the right tools and resources to be able to track, mitigate and evidence improvements in sustainability.
Monitoring and Mitigating
The McKinsey Report found that less than 20% of supply chain managers had sufficient visibility into the sustainability of the supply chains they used.
Technology is one of the key ways of reducing the impact of logistics operations on local communities. Technology helps retailers to:
- > Monitor the operations
- > Until logistics operations move to more sustainable methods such as electric cars, to ensure they can route optimise to reduce emissions
- > Consolidate deliveries
- > Identify and minimise vehicle idling
- > Use data, analytics and reporting to enhance supply chains reduce emissions, and take incremental steps to sustainability
If retailers cannot understand the pollution impact of logistics on the site and local community then they cannot adequately map and mitigate it. EMSOL’s innovative cloud-based platform helps retailers gain visibility of their emissions, so they can effectively plan action to reduce pollution from logistics activity. The platform ensures that retailers have real-time evidence of problem identification and the success of mitigating pollution. Without this crucial data, retailers will struggle to evidence their sustainability pledges to consumers, investors, and regulators.