The true cost of online shopping
Can online shopping be environmentally and economically sustainable?
Even before the COVID-19 pandemic, online shopping was growing at an incredible pace in many countries. And why wouldn’t it, as ordering online is fabulous in so many ways. You can quickly browse through item catalogues, compare prices, look up reviews, and even find items that may not available in your area. In many places, you can even get your package delivered the same or the following day. Now that everyone is locked inside, it’s only natural that many turned to the internet to order what they need, leading to record high demand for package deliveries. While there are benefits to online shopping, it’s worth looking at some of the consequences it has, both on the environment and society, as, like many things, it comes with both positives and negatives.
It may come as a surprise to many, but there is no clear winner when it comes to the environmental impact of online shopping when compared to going to a regular store. On the one hand, reducing the number of trips to the store sounds like a clear win for online shopping if these trips were going to be made by car. However, if these trips were to be made by foot, by bicycle, or by public transport, the line becomes a bit blurry. At the same time, the system that makes rapid deliveries possible also reduces the environmental benefits of online ordering, as many trucks end up driving around without being full. Similarly, faster modes of transportation tend to be favoured, leading companies to prefer trucks and planes over boats and trains. In fact, the demand for rapid shipping is so high right now that passenger airline companies have taken to filling the seats with cargo. There’s also the issue of packaging, where, instead of large shipments to retailers, we are now shipping a great number of smaller, individually packaged items. Finally, with the growth of online ordering comes the growth of online returns, especially when it comes to clothing. A 2014 study found that 77% of online consumers in Germany had made a return at least once, and distributors reported a return rate of over 20% on average.
Of course, there are a number of ways in which this is changing, or has already changed, for the better. For instance, many companies are moving to electric vehicles for last-mile deliveries (the part of the supply chain where a product reaches its final destination), with postal services often leading the way in terms of transition. Of course, in cities where it is possible, bike deliveries are helping reduce traffic congestion. Finally, innovations might help resolve these issues completely, with drone deliveries looming on the horizon and even plans for crowd-sourcing the last steps of the shipping process.
Costs for businesses
The competition between online and physical retailers is no longer a new thing. Ever since Amazon took the world by storm when it started selling books online in 1995, a fierce battle has been happening between both realms. While people are unlikely to completely abandon brick-and-mortar stores in favour of online shopping, as the experience simply isn’t the same, the online world has several advantages that give it an edge in many areas. From the massive amount of choice, backed by enormous inventories that would be unthinkable for physical locations, to the convenience of not having to worry about opening hours, the ability to quickly find the best price for what you want, and the easy access to customer reviews, online shopping is in a league of its own. There are, unfortunately, a number of sacrifices that have to be made to reach this position, and while you may have heard echos, a lot of them remain hidden beneath the surface, with many retailers reporting that, despite higher sales, their online presence has been detrimental.
While you may think that doing business online is inherently cheaper, mostly due to the lack of need for a storefront and its associated costs, there are many ways in which it can quickly become financially straining to do business online.
To begin with, there’s the aforementioned question of dealing with returns. The headaches and costs associated with restocking a product that has already been opened lead many companies to simply throw away all the items that are returned to them, with billions of items being returned every year, you can imagine the impact this is having. That time you ordered three pairs of shoes to see which size fits you before returning the others? The odds are, the shoes that you returned because they didn’t fit you ended up in the landfill.
Of course, even if the items are later resold, the returns are part of the costs associated with shipping. While the initial mailing costs are usually covered directly by the customer or through some other scheme such as minimum orders, returns are more and more expected to be paid for by the merchant, with nearly half of all customers reporting they would not order if they had to pay return fees. A research group found that, for an item sold for £89 (€99, US$110), returns would cost £11 at a 20% return rate (the average mentioned above), or £20 at a 35% return rate (a typical rate for clothing purchased online). With the rates mentioned before, you can see how a retailer may find itself seeing more losses than profit very rapidly.
This is an element that has been on the news a lot lately, and for good reasons. Warehouse workers are making headlines striking over hellish working conditions in warehouses and concerns over their safety. Meanwhile, delivery drivers are coming out claiming that the tight deadlines, often required to maintain cost efficiency while offering a speedy service, are pushing them to drive dangerously and resort to urinating in bottles in their trucks so they don’t waste time stopping somewhere. The cost-cutting measures that have to be taken to make online shopping appealing also have very real consequences for the people whose livelihood depends on the income from ensuring your goods get to you.
What can you do?
Online shopping is here to stay, and that’s a generally good thing. The online experience will continue to draw people to it, and no matter what side of the fence you are on, it’s hard to ignore the benefits it brings to shoppers. That being said, online habits have a direct consequence on our planet, our favourite stores, and the people around us. It’s worth taking a step back and asking a few questions:
- Is the item you’re buying available at a nearby store? Perhaps one you can reach by foot or by bicycle?
- Is it an item you need urgently enough to warrant pushing the retailer to use faster, more polluting modes of transport, or can you wait a few more days?
- Are you certain you need this item and won’t return it?
- Is there an online retailer with a better reputation you could choose (e.g. one that is known for better working conditions, offers more environmentally friendly packing or delivery)?