Prioritising sustainable home delivery will produce more sales and increasingly profitable operations, explains Chris Jones, EVP, Descartes.
Two supposedly opposing trends are merging. If tackled appropriately, they could provide retailers with a competitive advantage and increase their profitability. First, consumers are becoming progressively concerned about sustainability issues and they are expressing more desire than before to contribute towards protecting the environment. Second, e-commerce and home delivery has been kicked into ‘high gear’ due to the pandemic as countless numbers of consumers embraced its convenience, significantly broadening the scope of their online shopping.
Can these two trends be mutually beneficial though – isn’t the idea of sustainability at odds with the idea of home delivery and e-commerce? Since neither trend is leaving us anytime soon, taking advantage of both presents an ideal opportunity for retailers to upgrade their competitive status in the market, along with the profits they make, whilst embracing the shift towards environmentalism.
The recent study – “Retailers: Sustainability is Not a Challenge, It’s an Opportunity” – concluded exactly that. Carried out by Descartes and Sapio Research, the study surveyed more than 8,000 consumers in Europe and North America for their viewpoints on retailers’ sustainability practices around delivery operations. Here are five points that demonstrate why retailers must modify their delivery operations to take advantage of the environmental concerns that consumers have.
- Environmental impact is influencing consumer purchasing decisions. The study found that overall, 39% of consumers do consider the environmental impact of a product and company when making purchasing decisions. This number rises to 42% for respondents aged 25-34. Interestingly, only 11% said they never made a purchasing decision based upon the environment.
- Sustainable delivery allows plenty of room for retailers to differentiate. The study found that only 38% of consumers thought retailers were doing a good job of using sustainable delivery practices. This means that consumers are paying attention to retailer delivery practices and many retailers are not performing well in this area. In the case of grocery and apparel purchases, 40% and 39% respectively said that they would buy more from those retailers whose delivery practices were more sustainable than the competition.
- Sustainable delivery options are craved by consumers. Half (50%) of the respondents were quite/very interested in environmentally friendly delivery options. Even more (54%) said that they would be willing to accept longer lead times for environmentally friendly deliveries.
- The flexibility of consumers is often underestimated by retailers. Half (50%) of the respondents thought the ability to combine orders was quite/very important. Almost half (48%) said that they were quite/very interested in having retailers recommend the most environmentally friendly delivery option. In fact, three of the top four options involved combining orders or having the retailer select the most sustainable delivery option.
- Sustainable home delivery choices lead to lower costs for retailers. Options from increasing lead times to grouping orders to providing eco-friendly time windows help retailers lower both their carbon footprint and their delivery costs. Longer lead times decrease delivery costs through better delivery planning and mode selection. Order consolidation means fewer trips to the customer and higher delivery density. Eco-friendly deliveries also create greater delivery density, which reduces distance per delivery. These concepts apply to multiple delivery modes including private/dedicated fleet, less than load (LTL) and parcel.
Retailers need to adjust their opinion about sustainable home delivery. It presents a great deal of opportunity and needn’t be thought of as fraught with challenges. Consumers are evidently becoming progressively interested in more sustainable home delivery. These trends have created an opening to produce a win-win-win situation for retailers and consumers alike.
Sustainable home delivery acts in favour of the environment, fosters happier consumers and customer relationships, while increasing loyalty and reducing delivery costs. Despite this, some consumers will not express an interest in environmentalism, however the numbers are substantial enough to easily rationalise offering sustainable delivery options. And, in this day and age, what is better for the environment, is also better for business. With that in mind, what is your approach to sustainable delivery, and what does your future strategy look like?