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Sustainable Logistics: How Retail is Going Green

With the government looking at Net Zero targets, consumers becoming more aware of their impact on the environment, as well as the Covid-19 pandemic accelerating the path to e-commerce, investing in a sustainable logistics solution is fast becoming a necessity, as well as a competitive advantage that can help drive business growth.

E-commerce: the environmentally friendly option

It might surprise you to learn that e-commerce is more sustainable than bricks and mortar retail. While physical shopping will always have its place, e-commerce is not only convenient for the consumer, but has half the carbon footprint of physical stores.

A fleet of logistics vehicles delivering goods to their customers’ homes uses much less carbon than consumer vehicles taking individual trips to the store, where goods have been delivered from the warehouse. Goods going directly to the consumer reduces CO2 emissions by 30% compared to traditional retailing, because of the travel that customers take. On top of that, using electric vehicles (EVs) for last-mile deliveries, your carbon footprint is reduced even further. Barriers that have previously been in place for mass adoption of EVs are being resolved, with more and more well-loved commercial vans now launched as EV, so it’s now easier than ever before for businesses to transition to an electric fleet.

Even with the extra packaging needed for e-commerce deliveries, end-to-end environmental impact is roughly 15% lower for online shopping.

Consumers prefer sustainable sellers

According to a study by SmartestEnergy, four out of five people say that they are likely to choose a brand with a positive approach to environmental sustainability. The research also finds that 45% of consumers are unaware of sustainable practices that consumer brands have adopted, which means that either companies aren’t being eco-friendly, or they’re not publicising their new practices enough.

To remain competitive, it’s important that businesses act now and start talking about their sustainable practices.

Covid-19 pandemic

The pandemic has accelerated many businesses towards selling online, regardless of sustainability. The need to stay home has meant that new customer segments (i.e. an older demographic) and new industries (baked goods for example) have taken a digital path to sales.

With so many, both consumers and businesses, now converted to the convenience of shopping and/or selling online, Covid-19 has significantly changed shopping habits.

How IKEA is investing in sustainability & mobility

IKEA is paving the way for big brands to think about the planet and reap the rewards in terms of business growth. It reduced its carbon footprint by 4.3% last year, but still grew in sales by 6.5%. While they have a way to go to reach Net Zero, they are certainly on the right path.

IKEA is unlikely to ever go exclusively e-commerce, but it has identified a need to bolster its sustainable practices in terms of logistics (as well as many other areas of their business).

It plans to make 100% of its last-mile deliveries zero-emission by 2025 and has already been making waves on this front with fully electric vans in Australia, France, Shanghai, and India. IKEA is also helping bolster the EV infrastructure of the UK with electric car charging stations in its customer car parks, powered by 100% renewable electricity.

Tips for making your retail logistics more sustainable

  • Reducing emissions. Transitioning to an electric fleet is no mean feat, but it is doable. Nexus’ dedicated EV rental platform means that you can test out electric cars and vans, making the transition much more manageable.
  • Offer recycled and recyclable packaging. Packaging is a necessary evil, particularly for e-commerce retail, but there are ways to make it less damaging to the environment. According to research, 92% of consumers would choose paper-based over plastic-based packaging.
  • Increase awareness among customers. Customers want to make more sustainable choices, so ensuring that they know about your eco-friendly practices will mean that they are more likely to choose your business over a competitors’.
Winchester, UK. 25th June 2017. The streets of Winchester City centre are quiet at the end of the day on a warm Sunday evening.
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