3 Top Trends in Green Retail Logistics
Guest post: by Alex Buckley, General Manager for EMEA & APAC at DispatchTrack www.dispatchtrack.com
According to current trends, the number of parcels being delivered in London is expected to double by 2030. Given the increasing emphasis that consumers, businesses, and the UK government have been placing on sustainability, this number should jump out to retailers. Of course, this is a great sign that business is booming—but, considering that road transport already accounts for over 10% of global greenhouse gas emissions, it will also signal the need for a fundamental shift in the way that we transport goods from warehouses and distribution centres to end customers.
The good news is that that fundamental shift is already underway. Retailers around the world have found themselves in a position to innovate almost constantly over the course of the past two years, and many of those innovations have been focused on finding more efficient and sustainable delivery operations.
Some of these changes are coming so quickly that it can be difficult to keep up. That said, change cannot come quick enough to match the increased importance customers are placing on sustainability. It is now non-negotiable for the strength of one’s brand to keep up with the evolution of green logistics. To make that just a little bit easier to do, here are 3 key green logistics trends to watch out for.
Powering Green Distribution Innovations
There has already been a huge increase in deliveries being carried out by bikes, scooters, and other means that go beyond the traditional vans and lorries one expects to see in last mile deliveries. As urban areas become more congested, this is likely to become more commonplace—both as a way of cutting back on emissions and as a practical necessity for beating the traffic. Some businesses, for instance, have been innovating with more sustainable food deliveries via micromobility.
Meanwhile, studies from Deloitte show that at least some consumers in the UK (~15%) have been turning to in-store pickup fulfilment methods as a way of decreasing the carbon footprint of their purchases. Since this study was conducted in the early days of the pandemic, when the safety implications of in-store shopping were top of mind for most consumers, it is not hard to imagine that that number has been creeping up.
Simply put, flexibility in the way that businesses organise their transportation networks is going to become the norm. As this happens, it will be more crucial than ever to have increased visibility into supply chains. This is a key building block for businesses that want to understand the feasibility of new distribution methods or gain a more thorough understanding of all the moving parts that are impacted when their fulfilment network meaningfully changes. This requires highly connected systems across all supply chain touchpoints.
Gaining Supply Chain Control
It is starting to dawn on retailers that by effectively managing a greater portion of the supply chain, they can more easily identify new green efficiencies and, in doing so, take greater control over their emissions.
In the Netherlands, the online retail giant Bol.com actually acquired an entire bike courier business so that they could fulfil their own parcel deliveries for the first time in their history. Not only does this put them in control of their own deliveries—which can have huge benefits for maintaining a consistent brand and delighting customers with right-time deliveries—it also gives them a transportation network that is more sustainable by definition. Similar transactions are happening elsewhere in Europe, and we expect a lot more of them going forward, for the simple reason that when you own your own fleet (even a fleet of bicycles) you can set sustainability benchmarks and take full ownership over how you meet them.
This is just as true, and just as important, when talking about lorries and vans: the more control a company has over its supply chain, the more it can leverage tools like route optimisation and strong customer engagement to decrease the number of miles spent driving and cut out wastage in the delivery process. Like we saw above, this is also about gaining visibility and boosting connectivity, such that it is actually possible to identify feasible plans and execute on them seamlessly.
When warehouse management, route management, customer communication, post-delivery experience, and all other touchpoints are being managed with shared data and connected systems, it is possible to reduce failed deliveries, drive fewer miles, and gain huge amounts of efficiency. Going forward into the next few years, that is what we expect real supply chain control to look like in the context of sustainability.
Educating Consumers on Green Logistics
Most businesses are in fairly early days when it comes to figuring out a green logistics strategy and actually implementing more sustainable practices. The same can be said for consumers. The desire for greater sustainability efforts in the market is palpable, but the average consumer is still figuring out what that really looks like and how it should inform their purchasing decisions.
That represents a huge opportunity for retailers. A number of studies have shown that when businesses make consumers more aware of the environmental impacts of their purchasing and delivery decisions, they are more likely to choose eco-friendlier options. For instance, by letting customers know at checkout that a two-day delivery option is more sustainable than same-day or next-day, it is possible to incentivise many of them to opt for the two-day delivery option. With self-scheduling capabilities that actually give customers freedom over their delivery schedules, it is possible to improve one’s reputation and delight customers.
Given the power of simply giving options to consumers, there is likely to be an emphasis going forward on actually educating consumers about sustainability and green logistics from the retailer side. This can encompass a wide set of activities, such as:
- Showing customers, the potential emissions impact of bundling their deliveries when they are checking out.
- Highlighting the impact of failed deliveries on sustainability when sending reminders or other notifications about delivery statuses so they know how valuable it is to be ready for the delivery van to show up.
- Post-delivery communications informing consumers how their choices contributed to sustainability efforts in terms of reduced wastage, reduced fuel costs, etc.
Again, technology needs to be up to the task. Retailers need real-time visibility throughout the entire process, the flexibility to work with customer preferences, and the ability to customise customer communications at scale. When that happens, it can go a long way towards educating consumers and getting them on board with shared sustainability goals.
It is immensely difficult to predict what the future will hold for retail deliveries—the past two years have taught us that lesson multiple times. But at this point there’s little doubt that trends related to sustainability are going to drive major changes in the industry in the coming years. By keeping up with those trends, retailers can position themselves to lead the charge towards a more successful and sustainable future.
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