A new university study finds that explicitly providing consumers with information on the environmental and social impact of home deliveries can help U.S. omnichannel retailers — or those with numerous stores — capture sizeable market share from Amazon while expanding margins.
“We found that many consumers are committed to making more sustainable choices, but more than 80% of them do not inherently consider or understand the adverse sustainability implications of having online purchases shipped directly to their homes,” researchers from the Sam M. Walton College of Business at the University of Arkansas and Texas Christian University’s Neeley School of Business wrote in a column in the Harvard Business Review.
The researchers added, “While focused on sustainable product characteristics, they are often unaware of the additional packaging wastes, energy usage, traffic congestion, or safety issues that home deliveries create.”
In their study, online shoppers were asked to choose between free home delivery or free store pickup. Within the control group — participants not given any sustainability information — nearly three out of four opted for the convenience of home delivery. In the treatment group, where “participants were shown that store pickup reduced packaging wastes, emissions, traffic congestion, and vehicle accidents relative to home delivery,” 60% chose store pickup.
Overall, including online sustainability labels was found to cause store pickup to more than double and home deliveries to drop by 43%.
The researchers “conservatively” estimated that omnichannel retailers could capture $100 billion worth of market share from Amazon by calling out the environmental and social costs of home deliveries. Operating costs also could be “significantly” reduced with the shift to more in-store pickup, given that the additional handling and movement requirements for home delivery represent almost 50% of retail logistics costs.
Finally, omnichannel retailers could significantly reduce their environmental impact. The researchers said that even if only half of the projected channel-shifting volume is achieved, retailers can reduce that amount of plastic packaging waste by 100 million pounds, the number of trees used for cardboard production by 200 million, and the amount of tonnage that goes into landfills by 6%. Carbon emissions are also expected to drop as the wide majority of consumers are expected to optimize rather than add to their existing weekly trips to stores.
On the social impact of e-commerce, the “stop-and-go nature” of home deliveries that creates traffic delays, noise pollution, and vehicle safety issues for local community members is expected to be sharply reduced with a shift to more in-store shopping.
The researchers concluded, “Achieving these benefits requires neither major investments in new equipment or technologies nor significant process changes. Rather, omnichannel retailers simply need to provide consumers with the sustainability information.”
A 2023 study, “Does Shopping Behavior Impact Sustainability?” conducted by Deloitte on behalf of Simon Property Group, found that mall shopping can be up to 60% more environmentally sustainable than online shopping. Among the factors cited in the study creating online’s comparative environmental toll were the higher rate of returns from online shopping and the required additional packaging (corrugated boxes, bubble wrap, etc.). The study also found that the average mall shopping group size is 2.2, and when people travel together and buy more products per trip, the average fuel burned to buy each product is lower.
Another study published last year by Carnegie Mellon University’s College of Engineering found that grocery delivery was less energy efficient than individual trips to the store, as most people stop to shop on their way home from work or at times that avoid peak traffic hours.
However, numerous other studies contend that online delivery may be more sustainable depending on the circumstances. Increasing scale and innovations also promise to reduce e-commerce’s environmental impact in the years ahead. One study from MIT found that online shopping could be more sustainable than traditional shopping in more than 75% of scenarios that researchers came up with. Scenarios imagined included all-electric shipping, online warehouses positioned closer to the end user, and reduced packaging.