Fuelled by necessity, consumers’ relationship with online shopping has only become more ardent in the last year. In the UK alone, online spend reached a total of 28 per cent of total retail sales during 2020 and, while this figure is slightly lower across Western Europe at an average of 16 per cent, the trend is anticipated to continue on an upwards trajectory.
The impact that this spree has had on real estate has consequently caused one of the biggest booms in history in the logistics market: take-up increased by 12 per cent year on year and investment followed a similar course with record levels recorded. Nevertheless, despite the increased ease of purchasing for consumers, ecommerce is starting to have a negative impact, specifically the process of returns and their effect on the environment.
US reverse logistics operator Optoro estimates that 20 per cent of ecommerce returns are destroyed or end up on landfills as unsellable inventory. As a result, Boston Consulting Group estimates that €7 billion of returned goods are destroyed every year in Germany alone.
In order to combat this, we have seen policy makers start to implement sanctions on reoffending retailers. In 2020, France committed to outlaw the destruction of unsold products including clothing and electricals by 2023. Retailers will be forced to repair, re-use, resell or recycle goods instead. The German environmental ministry is reportedly visiting various ecommerce merchants in order to gain a sense of the proportion of goods which are thrown out, in anticipation of new regulation being introduced, according to Bloomberg.
As a consequence, this has created opportunities for the emergence of 're-commerce' with companies such as blinq.com acting as a returns liquidator for resale to consumers in order to reduce waste. We are also seeing the implementation of augmented reality (AR) by some retailers in order to help customers visualise the product before purchase, therefore reducing returns and subsequently, waste.
For consumers, re-sale platforms including Depop and Thrift are becoming more and more popular as the idea of re-using clothing becomes increasingly digital.
On a practical level, parcel delivery companies are also seeking more sustainable ways to deliver goods across Europe. Over the past three years, the annual number of electric vehicle sales has almost trebled to 742,000 in order to reduce carbon footprints, according to EV-Vehicles. Amazon’s fleet of electric vehicles are now making deliveries in Los Angeles and Amazon plans to expand this to 100,000 vehicles by 2030 in order to meet the company’s climate pledge of net zero carbon emissions by 2040.
What is increasingly apparent is that the negative environmental impact of online shopping is not one to be borne solely by the retailer, consumer, packaging or delivery companies; it must be a collective effort. With the issues surrounding this topic very much a global concern, we anticipate further regulation across all parts of the sector in order to combat further negative impact.
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