Greening Up Your Ecommerce Operations During the Holiday Sprint

The holiday shopping season is well underway, and The National Retail Federation is predicting holiday retail sales will total between $727.9 billion and $730.7 billion this year, and ecommerce is projected to grow 14.1% this holiday season, according to Adobe Analytics.

The holiday season can make or break a retailer’s annual performance, and now more than ever, they need to respond to an array of demands from savvy shoppers.

In 2019, consumers are paying attention to the sustainability practices of brands. More than half of shoppers say they’re conscious of the environmental practices of retailers they shop with. At the same time, they have grown accustomed to perks like overnight shipping and free returns, which have a detrimental impact on the environment. Retailers, striving to please consumers and simultaneously practice sustainability, are caught in the middle.

While these demands can be overwhelming, especially when competing with Amazon, there are creative ways retailers can approach shipping and returns to both delight consumers and be more sustainable.

Shake Up Shipping

In 2016, transportation surpassed power plants as the top contributor to carbon dioxide emissions, and one quarter of this footprint comes from trucks doing last-mile deliveries after goods have been transported to a warehouse by plane or ship. In short, shipping is not great for the environment.

There are constructive ways to minimize the environmental footprint of increased shipping, while maintaining a good customer experience. Some retailers, like Amazon, encourage shoppers to consolidate orders so multiple items get bundled together in one shipment.

According to a Bain analysis, doubling the average number of items purchased per ecommerce transaction and eliminating split shipments would reduce average per-item emissions by 30%. Local pick-up locations, like Amazon Locker and Nordstrom Local, also encourage shipping items in bulk to one central location rather than single packages traveling to individual homes.

Carbon-neutral shipping options can also make the holiday shipping rush more eco-friendly. Some retailers, like Etsy, purchase carbon offsets for all of their forward logistics. Alternatively, retailers can install an online feature at checkout like Carbon Checkout that empowers consumers to purchase offsets for their personal shipment.

Retailers can also encourage more mindful shopping behavior from consumers. Consider rewards for customers who avoid high-impact conveniences like overnight shipping and free returns; Jet, for example, offers monetary incentives for customers to opt out of returns.

Tackle the Returns Dilemma

Due to seasonality, location and condition, many returned items can’t go back into stock, creating a massive environmental problem as they travel around to find their next best home. Many end up in landfills, annually resulting in 5 billion lbs. of waste in the U.S. While returns are inevitable, there are things retailers can do to minimize returns and improve the customer experience, especially considering that ecommerce return rates are 3-4 times those of physical stores.

Better product descriptions and imagery help reduce returns, as consumers get a more accurate feel for the item before they click. Companies like Nike and True Fit have rolled out augmented reality features that can more accurately measure an individual’s sizing to reduce the likelihood of returns. And brands like Houzz provide AR features for home products that allow consumers to visualize an item in their physical space. A fast, easy way to improve product representation is to simply write more detailed descriptions and invest in better, more accurate visuals.

Retailers can also explore ways to go offline. Research shows that the carbon footprint of buying from a store is often less than an ecommerce order, as customers typically buy more items and combine their travel with other stops.

Omnichannel retailers can offer promotions and sales exclusively for in-store purchases to encourage more sales. Digital-only brands can consider participating in popup shops. By providing a physical space where consumers can see and feel products, they can also a place to bring returned goods. This buy online, return in store model is both appealing to consumers and better for the environment.

Get Real about the Whole Footprint

Sustainable retail is incredibly difficult to implement. There are so many factors to consider, from supply chain to logistics, right down to the light bulbs in stores. It can be overwhelming to consider it all. It often makes sense to bring in experts to analyze each and every element and identify hidden areas for improvement.

Many retailers appoint executives like Chief Sustainability Officer and VP of Sustainability to champion business transformation internally. Alternatively, third-party organizations like Climate Neutral help retailers measure their carbon footprint, provide guidance on how they can cut emissions and help implement systems that can offset the rest.

Ecommerce isn’t going anywhere, and the digital shopping revolution has created an abundance of positive opportunities for retailers. However, there is a dark side of ecommerce, and retailers must be held accountable for their role in climate change.

Corporate social responsibility (CSR) initiatives are a great start but are often siloed away from operations. Retailers should look at their business holistically and bridge the gap between departments to find ways to better the environment that also make smart business sense, especially in Q4.

Ann Starodaj is Senior Director of Sustainability at Optoro