The environmental impact of online stores is a topic that people are interested in, but one that is still talked about relatively little. There are great examples of how online stores have managed, in a variety of ways, to tackle their carbon footprints. Some are reasonably easy and quick to implement in many kinds of online store, while others require more planning and initial investment.
What is common to all of them, however, is that in the long run they often also save the online retailer money. Read on and choose the ways of reducing your business’s emissions that are most suitable for you.
Online v. brick-and-mortar store
There are many models for measuring the environmental impact of online and physical stores, but there is still no generally applicable measuring method. It’s particularly difficult to measure the final kilometres of deliveries. Consumers’ personal car travel, the efficiency of online store logistics, packaging materials and returns all need to be weighed up.
From an environmental perspective, the biggest challenges for online stores are in small partial deliveries, returns and packaging materials. A 2017 study by Bain & Company showed that smaller one-off purchases, which often lead to several separate deliveries, increase the carbon footprint of e-commerce. Separate deliveries also mean more packaging materials are used.
That means you can affect your online store’s carbon footprint by reducing deliveries and packaging, as well as the environmental impacts of the product manufacturing itself, naturally.
Eight ways to reduce your online store’s carbon footprint
1. Put your product manuals and guides online
Instead of printing everything on paper, provide product information, manuals and guides on your website. Instead of a thick instruction book, your product can come with a card telling the customer how to find the materials they need in electronic format on the store website. This is also good customer service: paper documents can go missing, but online, the information customers need is always available.
2. Start using ecological packaging materials
Repackaging products takes its toll both on the environment and the online retailer’s wallet. Use recycled packaging materials and the packages in which the products arrived from the supplier’s warehouse.
The Happy Food Store store uses old newsprint and recycled paper instead of bubble wrap in its packages. Cardboard boxes and packaging materials that the products came from the supplier in are also re-used when they are sent to the customer. You can read about how Happy Food Store improved its logistics.
3. Use durable packaging
RePack is a reusable packaging service, that offers durable packaging as an alternative to disposable plastic packaging. When the customer has received the product they ordered, they fold up the durable packaging and pop it in their nearest letterbox to be returned.
Returning the durable packaging is free worldwide. The customer can be incentivized to do this with a discount code for their next order, for example. Brands such as Filippa K, Scandinavian Outdoor, MUD Jeans and Makia use this service.
4. Make in-store collections and returns possible
If your customer lives a long way from your store or does not usually pass by it, delivering online orders to their closest pick-up point could be a more ecological choice. For customers who live nearby, however, in-store collections and returns may be easier and more environmentally friendly.
Visiting the store is also a chance to create a special kind of customer experience. You can encourage your customers to collect their orders in store by offering them the service for free. Dick Johnson offers its customers the opportunity to collect orders for free from its stores within two days of the order.
5. Avoid partial deliveries and boost average spend
On average, shoppers buy fewer products online than in a physical store. If every online sale was of twice as many products, and there were no partial deliveries, product-specific emissions would be reduced by 30 % and delivery costs would drop by over 50 % (Bain & Company).
You can make an impact on this by suggesting products, for examples. If your customer needs to buy suitable batteries when shopping for a new torch, suggest the batters and other suitable products on the torch product page.
You can also affect the average spend and the number of partial deliveries by tying free delivery to a minimum spend. And naturally, a larger average spend and smaller delivery costs are more profitable for the online retailer.
6. Examine your producer responsibility
“Producer responsibility” means the obligation to recycle some product packaging materials after they have been used. For some product groups, such as electronics, there also separate product-specific responsibilities.
Check your country's regulations. For example in Finland, if you sell physical products online and your turnover exceeds €1 million, you very likely bear “producer responsibility” under Finnish waste legislation.
7. Make your logistics more efficient
Transporting goods from place to place generates a large part of the e-commerce carbon footprint. The more efficient the logistics is, the smaller the emissions are. The simplest way to make logistics more efficient is to send more goods in the same transport.
Ikea is reducing its transport costs and emissions 10% by using lighter cardboard pallets. Smaller online stores can do it as well, for example by increasing the number of orders being sent in each transport. More efficient logistics also means monetary savings.
8. Offset payments
In the airline industry, offering passengers voluntary offset payments has become common in recent years. A reckoner calculates the carbon dioxide emissions produced by the flight per person and the customer can choose to pay an applicable offset payment. A more familiar example to many online retailers is the logistics and transport service PostNord. In Denmark, it offers delivery options that include carbon offsets.
When offering offsets, it is extremely important to consider trust. You should only use certified or otherwise monitored offset providers that offer the offset service in accordance with EU or international emissions trading rules. When you use a trusted partner to offer offsets, remember to tell your customers about this, too. Tell them how the offset payment works and how it is supervised. Cool Effect is an example of a company offering companies offset services.
Remember to tell your customers
Environmentally friendly choices appeal to consumers. Consumers are more and more interested in responsible consumption, and they pay very close attention to the ecological impacts. If you do work to reduce your online store’s environmental impact, tell your customers. When you make logistics more efficient and or reduce packaging material, you should find out and make a note of the baseline at the start of the project. That way, you can tell your customers later on what concrete effects the changes have had.
Written by Silja Patrikainen, business developer / Woolman
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