A greener way to shop online
A greener way to shop online
A greener way to shop online
Andrew Tavener – Head of Marketing, Descartes Systems UK Ltd
Sustainability is never far from the headlines now and consumer awareness has increased since the pandemic began as people witnessed the environmental benefits of traffic and travel fumes decreasing as people stayed at home. This has led to more pressure on retailers and logistics managers to consider the environmental impact of their business operations. Recent research undertaken by Descartes found that 71% of European consumers and 60% of UK consumers now consider the environment whilst making online orders. The growing importance of sustainability is evident with 56% of the UK wanting to see the UK reduce its emissions faster and government pressure increasing on companies to pledge to go net-zero by 2050.
This awareness of environmental accountability comes at a time when the online shopping demand has never been higher. The focus should now be on continuing to grow alongside the demand but with a greener approach in both the ways that consumers shop as well as the way retailers and logistics providers deliver their services. Businesses must take action – from combating congestion to driver shortages, to diesel bans and calls for more sustainable route planning. Consequently, intelligent technology is the key to unlocking streamlined logistics for delivery companies and reducing costs.
The growth in online shopping
The impact that the Covid-19 pandemic has had on shopping and deliveries is vast, demonstrated by the number of internet sales having risen substantially since February 2020. Online shopping is now more popular than ever having grown to an average of 43% of purchases from 32%. Over half (51%) of European consumers have increased their number of purchases and now make an online purchase at least fortnightly which is almost double the amount (28%) before Covid-19 hit. The number of purchases made online is expected to remain at 41% even after the pandemic has declined showing that this shift away from brick-and-mortar stores is here to stay as consumers look for a more convenient way to shop.
The sustainable goal
With increasing interest from consumers in sustainable options and online shopping set to continue in popularity, retailers and logistics companies need to be mindful of the impact they are having on the world around them. 63% of people in the UK now show a willingness to pay a surcharge for environmentally friendly shipping and this is beginning to influence consumers’ buying habits with 21% ceasing to buy from brands over environmental concerns. Seeking to address environmental factors and matching consumer expectations can help companies to win over, and retain, consumers.
Delivery companies are beginning to take steps to improve their environmental credentials including an increase in the use of Electric Vehicles (EVs) which can mitigate the growing costs associated with the UK’s Clear Air Zones. Using intelligent route management ensures that the right vehicles can be deployed to match capacity with demand and reflect environmental goals in real-time whilst the fleet is in transition. Continuous optimisation of routes can automatically take into account details such as vehicle size and engine type to allocate an EV to a Clear Air Zone or a smaller vehicle to rural narrow roads to increase efficiency of the fleet.
UK consumers have also shown a growing interest in bulking up orders with 26% interested in bulking all orders into a single delivery when there are multiple deliveries in their areas and 27% are happy to have all their orders delivered in a single weekly delivery. This could lead to a significant increase in the sustainability of deliveries and business operations. Where smaller organisations may not have as many options to bulk up or bundle orders, there is an opportunity for fulfilment collaboration to optimise the delivery models by working collectively. With rising costs and driver shortages becoming increasingly challenging, it will be a valuable option for third parties to leverage real-time capacity optimisation solutions and a consolidated fulfilment option in the future based on bulk order delivery.
Technology for good
The current shortage of HGV drivers is dominating the news making the importance of using the limited resources available even more vital and this can have an impact on the sustainability of a company. Essential in the fight against climate change, a 5-25% reduction in fuel consumption and saving of around 552,000 tons of CO2 emissions can be achieved by using routing, mobile and telematics software, such as Descartes’. These intelligent solutions can increase visibility and ensure drivers are operating only the most efficient routes possible to avoid traffic and drive in the optimum areas for the vehicle thus reducing mileage and emissions whilst delivering more goods.
Adopting this technology can provide access to information about capacity, demand and the fleet in real-time. Through continuous background optimisation of deliveries, retailers have the opportunity to begin to influence the buyer behaviour of consumers. The data gained can enable differential pricing to incentivise delivery slots to maximise delivery density, thereby increasing efficiency and minimising environmental impact. Demonstrating the benefits of selected “green” delivery slots such as how consolidating deliveries within a small area on a specified day can use less CO2 or emphasising the use of EVs can lead to higher customer satisfaction and loyalty. Additional charges could also be used by companies for the more convenient time slots to encourage further customer consideration of the environment as well as offering a premium value service to make the benefits to the retailer two-fold.
Advanced route optimisation also can be applied to alternative delivery vehicles such as bikes and e-Scooters. It includes a range of distance variables as well as the availability of battery charging stations on route to support a change to lower carbon emissions.
Improving the customer experience and impression
Using solutions to enable a more sustainable approach to online shopping and deliveries whilst in turn providing a better and more convenient experience for the customer can have a huge impact on a brand’s success. As e-commerce has grown, so too have consumer frustrations as delivery problems continue to radically affect customer perception on not just the delivery company but also the retailer with 24% losing trust in the retailer and 24% losing trust in the delivery company as a result. The expectations for packages to be received safely and conveniently with minimal environmental impact still have a way to go to achieve consumer satisfaction, with only 16% of UK consumers being satisfied with their deliveries every time.
With advanced route automation, transport operators can benefit from insight that enables them to add new jobs where appropriate, notify customers in real-time of the status of a delivery and re-route deliveries to avoid unexpected delays to improve the experience and eliminate unnecessary mileage. Intelligent solutions such as this can provide a significant competitive advantage – not just in improving the consumer experience and therefore loyalty, but increasing driver productivity and reducing the stress on each driver.
Big expectations need big action
Customers have big expectations for an improvement in deliveries with 65% wanting greater flexibility and more than half wanting real-time order status tracking. This is proving to be a challenge with the current shortage of HGV drivers making it difficult for many to meet customer demand. As the desire for a more environmentally friendly approach from businesses also increases in tandem from both consumers and the government, the pressure is on logistics providers and retailers to match this with big action. Technology solutions can seamlessly integrate and aid businesses to meet customer experience objectives and sustainable goals simultaneously for competitive advantage – maximising their fleet’s potential and minimising their impact on the environment.