In our current era of ecommerce ubiquity, consumers are fast replacing traditional retail with the ease of online shopping. Experts predict ecommerce sales to double by 2028 — for an industry that already accounts for 19.1% of total retail sales.
And with retail giants offering free expedited shipping and same-day delivery, shopping online seems more convenient than going to the store. We won’t lie; the convenience factor is huge, significantly changing consumer expectations and behavior.
Studies found that shipping options (or lack thereof) are the number one reason for abandoned carts. And, free shipping led to more sales, larger sales — 84% of respondents reported purchasing because shipping was free, and 30% increased order size to qualify for free shipping.
Considering all that, It makes sense that retailers are growing in their ecommerce presence.
We have to pause and consider how does online shopping affect the environment? In this article, we’ll look in depth at the environmental impact ecommerce has and will have in the future — unless we invest in more sustainable ways of doing things.
Our team has worked with thousands of businesses to help them unlock the value of sustainability. Download this eBook to learn more about getting started.
The Growth of Ecommerce
Ecommerce is big business! By 2025, retail ecommerce sales are projected to exceed $1.6 trillion — doubling 2020’s revenue. And with fast, free shipping, it’s easy for shoppers to purchase items often, which led to more than 40% of U.S. consumers getting at least one delivery each week.
Compared to brick-and-mortar, there are advantages and disadvantages of ecommerce. The variety and volume of products available to consumers with various interests and needs is a significant benefit. Plus, goods and services are more readily available for older people or consumers with disabilities.
The problems with ecommerce are often hidden in the supply chain — with greenhouse gas emissions created in each step from production to shipping. Factory production and carbon emissions from transportation all contribute to global warming behind the scenes. Although, the waste produced by shipping materials is pretty apparent on garbage day.
Struggles Facing the Ecommerce Industry
Does online shopping contribute more to climate change than in-store shopping?
It depends. Studies show brick-and-mortar stores can use far more energy and create more emissions due to the need for commercial retail space and frequent bulk deliveries, but much less in packaging and IT environmental costs.
As we’ll see later in the article, consumer choices play a significant role in how environmentally friendly ecommerce is. Whether shopping in person or online — consumers are responsible for researching a company to ensure they make sustainable choices.
How can consumers make sustainable choices while shopping online?
The good news is that sustainable online shopping is achievable; it just takes time and attention.
We recommend looking for retailers that sell pre-loved or upcycled items or create new products from sustainable, renewable resources. Other essential aspects of sustainability are transparent and fair labor practices.
And, you can always look for eco-friendly apps that help you make the most sustainable consumer choices!
Sustainable stores will use lower-impact materials like recycled paper for packaging — you can often find this information on a retailer’s sustainability page. And finally, opt for a carbon neutral shipping option in the cart.
It’s no fun to get something you ordered online and realize it doesn’t fit (or you just don’t like it) but making returns in-store whenever possible is much better for the environment. If that’s not possible, hanging on to the item and re-gifting it later is a sustainable choice!
What are retailers doing to reduce the environmental impact of online shopping?
Many online retailers are trying to reduce their environmental impact. Creating sustainable business practices like investing in energy-efficient machinery for factories, going paperless, or made-to-order merchandise reduces the environmental impact.
Many companies are making their own net-zero carbon emissions pledges to be carbon neutral — just use your best judgment whether you believe these claims are true and the company is making meaningful progress toward them.
Can technological innovations help in making ecommerce more environment-friendly?
Technology can definitely make ecommerce more environmentally friendly. Companies are leveraging innovations like e-shipping labels to eliminate paper labels (over 2 billion pieces of paper were eliminated during the 11.11 online shopping festival alone).
Adopting AI in the warehouse can help minimize waste by sorting products into the optimal sized, eco-friendly packaging and analyzing logistics networks for efficiency.
Eco-savvy brands partner with responsible businesses to amplify their impact — like leveraging EcoCart to offset carbon emissions and make online orders carbon neutral.
What role can government regulations play in shaping a sustainable ecommerce industry?
Government regulations are critical to shaping the future of the ecommerce industry, especially to protect emerging economies and enable them to participate fully in global ecommerce.
Regulations can improve things like data and intellectual property rights, sustainable growth, and controlling carbon emissions, according to some studies.
Plus, if governments were to create a verification body for carbon offsets, that would help standardize the carbon offsetting industry and provide more growth and transparency.
The Environmental Impact of Online Shopping
You might be wondering, how does online shopping affect the environment exactly? With 21.5 billion parcels shipped in the U.S. in 2021 alone, a significant amount of raw materials, shipping and packaging, and logistics are involved. Let’s dive deeper into some of the problems with ecommerce and what that means for climate change.
Carbon Emissions: From factory to front door
Most carbon emissions created by ecommerce are indirect, meaning they’re made during the full scope of the supply chain, not just the delivery process. For example, just one logistics company creates 36 million tons of CO2e emissions annually, equivalent to 8 million passenger vehicles.
Without changing the supply chain to be less carbon-expensive, large ecommerce shops are projected to create more than 1 Gigaton of CO2e yearly by 2040 — twice that of the entire United Kingdom.
But, if online retailers avoided split shipments while growing their operations, they could reduce their emissions by 30% per item.
Packaging Waste: Unboxing the problem
Shipping and packaging materials create a massive amount of trash — including cardboard, plastic, bubble wrap, and tape.
Research shows a single retailer shipped 165 billion packages in the US, using the equivalent of 1 billion trees worth of cardboard. Not only that, the same company created 465 million pounds of waste from plastic packaging in 2019.
The packaging from shipments is a significant waste issue that municipalities aren’t equipped to handle the amount and complexity of recycling at this scale.
Electronic Waste: The dark side of digital commerce
Have you noticed that electronics are harder to fix these days? You’re not alone. Manufacturers intentionally restrict repair information and ability, leaving customers few choices but to replace rather than repair.
This is a major reason why 41.8 million metric tons of e-waste are generated globally each year, and the bulk of it ends up in landfills in countries including China, Ghana, India, and Indonesia.
While some can be recycled or refurbished, exposure to the elements of electronics (mercury, lead, and lithium, to name a few) can negatively affect humans and animals, the local groundwater, and soils.
Impact on Urban Spaces: The concrete footprint and food deserts
Ecommerce is creating a challenge for city planners — how to effectively manage increased deliveries while preventing traffic congestion and pollution in urban centers.
Online shopping is also changing the face of our communities. Traditional retailers are closing stores at a record pace, which means fewer jobs in the service sector and increased demand for warehousing and fulfillment centers. Cities must contend with the changing face of commercial real estate.
While some changes are concerning, the move to online shopping has increased grocery access for those living in food deserts. More than 90% of USDA-designated food deserts are served by grocery delivery services, with 96% in cities.
It’s vital that online shopping creates access to quality food, but it doesn’t address the policy issues and rural/urban divide that created food deserts to begin with. While immediate needs are being met, governments can develop long-term solutions to the food desert problem.
The Trade-Offs: Online vs. Offline Shopping
We’ve seen some of the advantages and disadvantages of ecommerce; let’s dig deeper into the environmental and sustainability questions surrounding whether or not to shop.
Energy Use and Emissions: Store Shopping vs Online Shopping
A study by MIT found traditional retail has a larger carbon footprint than ecommerce. But, when determining which creates more carbon emissions, ecommerce vs. retail, it depends on the individual choices of the consumer.
For example, if they live in an urban center, the emissions will be less than those in a suburban community, requiring them to travel further to the store. Also, when shopping online, if they opted for rush shipping or waited 7-10 business days for delivery. These choices all impact the carbon footprint of their purchase.
So, when common behaviors like choosing rush shipping and returning 30% of online purchases were factored in — online shopping fared worse for climate change impact.
The Challenges of Consumer Behavior
The transport of goods is responsible for 37% of the total carbon emissions for the ecommerce industry. It’s estimated that by 2030, there will be approximately 7.2 million delivery vehicles on the road, increasing carbon emissions by about 6 million tons. It’s not hard to imagine how much more traffic and longer commutes will result from this influx of freight.
It’s also not inevitable. Consumer expectations drive the demand for convenience, fast delivery, and inexpensive goods. But attitudes are shifting! Globally, 85% of people report changing their purchasing behavior to be more sustainable in recent years.
A Closer Look at Packaging
It’s not just shipping that makes ecommerce a significant carbon emission creator — all the materials needed to transport goods securely must be considered when considering the big picture of climate change and ecommerce.
Single-Use Packaging and its Consequences
Packaging creates massive amounts of single-use plastics, contributing to greenhouse gas emissions. For example, only 14% of the nearly 86 million tons of plastic packaging produced yearly is recycled.
That means the remaining 86% is landfilled, incinerated, or left to pollute the environment.
Also contributing to the emissions problem, 3 billion trees are pulped to create 241 million tons of shipping cartons yearly. Fewer trees plus more emissions from single-use plastics is a self-compounding problem!
Fortunately, many ecommerce companies are turning toward recyclable and biodegradable packaging solutions. Customers purchase from environmentally conscious companies to further their plastic waste reduction goals.
The Potential of Eco-Friendly Packaging
Eco-savvy consumers know that sustainability isn’t just about the recyclability of packaging but also the environmental repercussions throughout its lifecycle. More sustainable packaging is in demand, and the industry is growing!
The sustainable packaging market is expected to increase from USD 371.4 billion in 2022 to USD 737.6 billion by 2030. Pretty significant!
Market research found many consumer-facing brands are setting ambitious net-zero or greenhouse gas emission reduction targets — and sustainable packaging is a big part of those strategies to reduce carbon footprints.
The Logistics of Online Shopping
Warehousing and Storage: The hidden costs
While we know that a significant portion of the carbon emissions from ecommerce comes from shipping, a lot is happening behind the scenes that add to its carbon footprint. In fact, up to 13% of the emissions come from warehouse buildings alone.
The total energy demand can be around 24% of the transport emissions. Knowing how much greenhouse gas we can attribute to warehouses is challenging, as this topic needs much more research and standardization.
Delivery Mechanisms: A Tale of Transportation
Studies show that 44% of the carbon footprint of a product is incurred during transportation, with 26% of that total in the last mile, i.e., home delivery. And while many large e-tailers are making publicized commitments to electric vehicle fleets, reducing carbon-expensive air freight, and going carbon neutral — their actual emissions have increased by 15%.
The disparity between what companies say and the impact they have is why we suggest consumers do their research before they purchase! Corporate greenwashing isn’t new, but we just have to be careful when we hear big claims without much data.
Reverse Logistics: The return trip
Online shoppers are more likely to return items than in-person. It makes sense; getting a good feel for the product virtually is harder. While in-store purchases are returned up to 10% of the time, online ones go back to retailers up to 40% of the time. Without proper data, the true carbon cost of these returns is still known.
We do know that while online retailers make returns easy, a good chunk of those products are never resold. Up to 25% of returns are simply thrown away, resulting in 5 billion pounds of unused goods hitting landfills yearly.
Energy Use in Ecommerce: Servers, Services, and Sustainability
It’s estimated that the energy for IT makes up about 20% of an item’s carbon footprint. There’s a lot in that bucket, including the servers needed to host ecommerce websites, in-warehouse logistics programs, shipment tracking systems, and others.
This side of the energy used in ecommerce is seldom considered. In terms of greenhouse gases, one Google search creates 0.2 grams of carbon emissions. The more we rely on our devices to discover and purchase products, the higher the carbon footprint will be.
Same-Day Delivery: Speed at what cost?
Freight vehicles create almost 25% of transportation-related carbon emissions, which is high on its own, but we also need to consider the human costs.
To fulfill the same-day delivery promise, companies rely on contract drivers who lack workplace protections. An investigation found these drivers working under intense demand with high delivery volumes, leading to reckless driving and inhumane conditions.
The Promises and Perils of Carbon Neutral Shipping
Offering carbon neutral shipping is a step in the right direction for sustainability in ecommerce, but it’s important that the entire lifecycle of the product is being accounted for, and not just last-mile shipping. Eco-conscious consumers should look for carbon neutral brands as a whole, not just in the last mile.
EcoCart’s carbon offsetting solutions empower businesses to analyze, offset, track, and communicate their end-to-end carbon footprint — from production to delivery. Knowing the complete picture of the carbon emissions from your business operations is the first step toward sustainability.
The Trade-offs: Ecommerce vs Retail
We know the carbon footprint of the retail industry is enormous. For example, the British Retail Consortium (BRC) reported the retail sector’s annual greenhouse gas emissions are 80% higher than those of all vehicles in the country. Fortunately, they’ve penned the BRC Climate Action Roadmap to reduce CO2 emissions of the industry and its supply chains to net zero by 2040.
There are certainly trade-offs between ecommerce and traditional retail, but as more organizations take accountability for their role in emissions — and ultimately, climate change — either shopping style will have many sustainable options.
By 2021, over 65 major global retailers had set science-based targets to reduce carbon emissions, a number that continues to grow. Many of these companies have both in-store and online operations, so any decarbonization efforts should benefit both.
Energy Use and Emissions: Store Shopping Vs Online Shopping
Shopping malls require energy — from lighting, music, and air conditioning, to internet, security systems, and heating. These create emissions within the retailers’ control.
There are also the downstream emissions (referred to as Scope 3) that are created in the manufacturing, transportation, and use of the product, that are harder for the retailer to prevent or offset.
Ecommerce still requires a lot of energy, and much of it falls into the Scope 3 category. To address this, online retailers will need to work with their suppliers and transporters to reduce emissions as much as possible if they want to reach their decarbonization targets!
Potential Solutions and Sustainable Practices
Eco-friendly brands have a massive market.
It’s true! More than half of US and UK consumers report wanting online brands to use less packaging, and one-third will pay a premium for eco-friendly delivery. Here are some ways to get started making your business more sustainable.
Green Shipping and Carbon Offsetting
One of the easiest to implement sustainable practices is offering greener options like carbon neutral shipping. A green checkout can be enabled with a carbon neutral shopping cart app like EcoCart.
How does carbon neutral shipping work? Very simply, the carbon emissions created throughout the products’ lifecycle are measured, and carbon offsets are purchased to remove the equivalent amount of greenhouse gases. Easy, right?
If you’re wondering how carbon offsets work and their effectiveness, it’s essential to know that carbon offsetting projects follow a stringent verification process. Independent organizations verify and ensure they are actually creating the carbon remediation they claim.
Circular Economy Approaches in Ecommerce
Moving toward sustainable ecommerce doesn’t stop when the product reaches the customer.
More and more brands are taking accountability for the entire lifecycle of their products, offering value back to the customer upon returning a used item, opening online resale markets, or up-cycling previously used products.
Integrating Sustainability into Lifecycle Marketing
One of the best ways for your brand to connect with like-minded consumers is to tell your sustainability story at every stage in the buying funnel.
We’ve found customers are 14% more likely to convert, with a 10% higher average order value when you incorporate data-backed green messaging into your lifecycle marketing. Plus, our app for sustainable consumer packaged goods products can help you tailor a solution to meet the needs of your eco-conscious business.
Consumer Choices: Shaping a Sustainable Future
Consumers are up to 6 times more likely to purchase and recommend purpose-driven companies, a global study found. While shoppers want to support sustainable companies, there are ways that brands can design their experiences to encourage eco-friendly choices.
The simplest way to build in sustainability is to make it the default choice. For example, researchers found that when green electricity was the default option in residences, 94% of people stuck with it. More consumers will adopt greener behaviors when we make sustainability the easiest option!
Clicks, Carts, and Carbon Offsets: Navigating the Future of Online Shopping
What does the future of ecommerce hold? What’s clear is that online shopping is a permanent fixture in our purchasing repertoire. How that impacts the planet long term is up to us.
We’ve seen ecommerce advantages and disadvantages — faster, more convenient, and more accessible products at the click of a button come with trade-offs like more traffic, more packaging waste, and simply more purchase volume.
All of these put pressure on an already struggling climate as we draw closer to the Paris Agreement’s target of 45% emission reduction by 2030.
As new technology makes ecommerce more efficient, with greater options for sustainable packaging and carbon neutral carts, we hope customers will choose eco-friendly ecommerce more often.
Fortunately, online or in-person — consumers can use our purchasing power to shape a more sustainable future.
