This post was originally published in Venture Beat by Samantha Smith, Director of Sales at Ware2Go.
As the dust settles from the frenzied ecommerce growth spurred on by COVID-19, many businesses and consumers are beginning to take a long, hard look at the new digital-first economy to understand the environmental impacts of online shopping and particularly at the impacts of home delivery.
The impact of small parcel, Direct to Consumer (D2C) shipments can’t be overstated. According to the World Economic Forum (WEF), the ecommerce boom will likely increase the total final- mile delivery vehicles on the road by 36% and increase greenhouse gas emissions by 30% overall by 2030.
At Ware2Go, we wanted to know how aware consumers were of the impacts of their increased ecommerce shopping, and we found from our 2021 consumer survey that overwhelmingly they were not only aware. They were concerned. 88% of respondents indicated that sustainability was either somewhat or very important to their online purchase decisions, and 66% indicated that sustainability had become more important to them as a result of the pandemic. Fulfillment and delivery were clearly top of mind for these respondents as well. When asked to indicate the most important sustainable business practices to them, 47% indicated recycled packaging, and 41% sustainable shipping practices.
We found, however, that although consumers were aware of the impacts of online shopping, they weren’t planning to change their habits anytime soon. 49% of consumers planned to continue doing most of their shopping online as pandemic restrictions were eased. Not only that, but their expectations for fast and free shipping had actually increased as a result of the pandemic.
Altogether, this data built a picture of how 2020 shaped what we’re calling “The New eCommerce Shopper”. This new eCommerce shopper is informed, environmentally conscious, and aware of the impact of their purchasing decisions. They are not, however, planning to change their at-home shopping lifestyle anytime soon. So, if we Americans can’t give up at-home delivery, what can the ecommerce industry do to lessen its impact?
Understanding Customer Motivations
As we began to research how we could lessen the environmental impacts of shipments within our network we came across a study by Harvard Business Review that points out a cognitive dissonance among ecommerce shoppers. Their study found that 65% of shoppers want to support more sustainable businesses, but that, in fact, only 25% actually do.
Similarly, in a survey by Shopify, 49% of consumers reported that they would be willing to pay extra for a sustainable shipping option. However, those same shoppers were more likely to choose same-day or next-day shipping (with a considerably high carbon footprint) when the option was available.
We noted a similar cognitive dissonance in our survey data. Although 88% of respondents indicated that sustainability affected their purchasing decisions, only 54% of respondents were willing to pay extra for a sustainable shipping option. Slightly more respondents (66%) indicated that they would be more likely to purchase from a brand that offered carbon-neutral shipping at the same price and same delivery speed as their competitors without carbon-neutral shipping.
This cognitive dissonance is symptomatic of our 1-click purchase retail environment. Busy consumers have grown accustomed to the convenience of 1- to 2-day home delivery on everything from perishable food items to large appliances. When faced with a split second decision between convenience and sustainability, most consumers are choosing convenience, even when they seem to understand the impacts of their choices.
The Role of Consumer Choice
The question, then, is what is the responsibility of the ecommerce merchant? There’s a new level of expectation from ecommerce shoppers. And now that we’ve all had a taste of this frictionless, fast-paced shopping experience, it’s unlikely that we’ll ever go back.
But do consumers’ choices really reflect what they want? Or should merchants appeal to the nobler intentions of their customers?
The report from Harvard Business Review outlines a few tactics for “tricking” consumers into making more sustainable choices. Their suggestions include using social influence or making the more sustainable choice seem like the social norm. This tactic appeals to most people’s need to feel that they are behaving in a “normal” or socially acceptable way.
They also recommend publicly acknowledging shoppers’ sustainable choices, noting that most people are twice as likely to make an eco-friendly decision when others are present to witness that decision vs. when they are alone. Our merchant O2 Recovery, an oxygenated recovery drink with a brand emphasis on social responsibility, used this tactic when announcing their carbon neutral status on Earth Day this year. They promised a social media shout-out to any customers who made a purchase in celebration of their carbon neutral announcement and planted a tree for every purchase made that day, amounting to 1,000 trees planted in a single day.
However, we felt that while social influence is clearly a powerful motivator, there may be an additional tactic that the Harvard Business Review omitted: remove consumer choice.
If consumers say they want sustainable shipping options, we are going to enable our merchants to take it a step further — remove non-sustainable alternatives completely. We recognized that the responsibility doesn’t fall solely on our merchants. We needed to take responsibility for the environmental impacts of last-mile delivery by offering low-cost and easily adoptable sustainable shipping programs.
And our responsibility doesn’t stop there. Now that consumers have experienced a world where virtually any item they can imagine is available at the click of a button and can be delivered to their doorstep in two days or less, they won’t accept anything less. In fact, our survey data indicated that 33% of shoppers actually now have higher expectations for fast delivery as a result of the pandemic. So, to make sustainable final-mile delivery the most attractive option, it must also meet the new consumer expectations for delivery speed. There are two primary ways that our network enables merchants to deliver on both speed and sustainability:
Distributed Inventory: By forward-stocking inventory as close as possible to the end customer, our merchants can reach their customers with 2-day ground shipping. This lowers each shipment’s average time in transit (TNT), and the less distance a package travels to reach its destination, the less environmental impact it has. This also decreases a merchant’s reliance on next-day air shipments, which our analysts found to emit nearly six times the amount of carbon as small parcel ground shipments.
Carbon Offsets: Beyond decreasing the distance traveled by a package, we have chosen to subsidize carbon credits on behalf of our merchants to offset the carbon their shipments do emit. Through a partnership with Pachama, all of the carbon offset projects we support are measured through remote sensing and AI to ensure their credibility.
By working to provide the service levels ecommerce shoppers have come to expect while reducing the environmental impact of final mile delivery, we are partnering with our merchants to truly remove non-sustainable choices for consumers. When consumer choice is removed, shoppers are no longer confronted with diametrically opposed choices: the one they want to make (the eco-friendly one) and the one they’ve been programmed to make (the convenient one).
In this way, we have the opportunity to help consumers make the decision that, deep down, they actually want to make. Our merchants can also reward their customers by advertising their sustainable shipping practices. Consumers will still feel good about their decision to support sustainable business, even if the decision was ultimately made for them.
A Truly Frictionless Experience
Brands like O2 Recovery are choosing to lead the charge with recycled and compostable packaging materials, an initiative to be plastic-free by the end of 2021, and by partnering with a fulfillment provider that reduces and/or offsets all carbon emissions.
At the end of the day, removing choice by presenting consumers with only the choice they truly want will make for happier shoppers. Relieving ecommerce shoppers of their cognitive dissonance, then, may be the last frontier in creating a truly frictionless online shopping experience.
Samantha Smith is the Director of Sales at Ware2Go, a UPS company. Samantha graduated from GA Tech with a BS in Industrial & Systems Engineering. She worked for 7 years as a Strategy Consultant in Supply Chain and Restructuring.
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