Omni-channel environmental impact

One of the questions not fully addressed by omni-channel retailers is how their omni-channel activities affect the natural environment:

Does omni-channel retailing generate more carbon footprints compared with conventional brick-and-mortar retailing?

To address this topic, a team of researchers at The MIT Center for Transportation & Logistics (carbon footprints of ecommerce Annual Review 2014-2015) led by Dr. Blanco, compared the carbon footprint of online and traditional retailing. The team examined 10 consumer buying behaviors representing different combinations of the search, buy and return phases of the consumer purchasing journey for three products: a laptop, a doll and a t-shirt. Evaluating multiple scenarios of supply chain configurations, consumer transportation choices, urban density, packaging and item bundling, they found that online shopping was the most environmentally friendly in a wide range of simulated experiments. However, they warned that with retailers and consumers leveraging traditional brick-and-mortar alternatives to fulfil orders purchased online, including returning products to stores, the carbon footprint savings accruing from online purchases would soon disappear.

Another study by Edwards, McKinnon and Cullinane at Heriot-Watt University (2010) “Comparative analysis of the carbon footprints of conventional and online retailing: A ‘last mile’ perspective”- also compared the carbon footprints of goods delivered from local depots to customers’ home as well as personal shopping trips. Their findings showed neither home delivery nor conventional shopping to the brick-and-mortar store has an absolute carbon advantage. In short, the jury is still out. It is not so much about the purchase, or whether an item is bought online or in a conventional brick-and-mortar store. What matters most from the perspective of reducing carbon footprints, is which mode of transport is used, how many items are purchased each trip, the way shopping trips are combined with other activities, and the frequency and drop density of delivery trips.

With omni-channels offering unprecedented levels of convenience to shoppers, and retailers competing to meet the “anything, anytime, anywhere” expectation, chances are that consumers would be less likely to plan their online shopping by combining multiple purchases. Therefore retailers would find it hard to organise combined deliveries to increase drop efficiency. What is needed is an awareness-raising campaign to increase consumers’ and retailers’ awareness of the environmental implications of their purchasing behaviour and distribution methods. A holistic effort involving all parties is needed.

To further illustrate this point, view the short video by AFP News Agency on pollution control: India’s choked capital starts ‘pollution toll’ for trucks. It highlights the environmental issues India’s logistical infrastructure is grappling with, and the consequences that may prove detrimental to its future. It also shows that with huge population pressure on supply, controlling pollution at one part of the city merely passes the pollution to another part.

Reflection

Should businesses be concerned with their carbon footprint for omni-channel?

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