The Environmentally Conscious Consumer Under Pressure: How Retailers Can Differentiate Through Sustainable Delivery
With many recent natural disasters — hurricanes, forest fires and flooding — serving as a constant reminder of the threat of climate change, the environment is playing an increasing role in decision-making for retailers and consumers alike. But how motivated are consumers to reduce their carbon footprint through sustainable products and eco-friendly home delivery options?
While today’s consumers are definitely interested in making sustainable choices — a recent survey found a whopping 99 percent of respondents are open to doing more to reduce their environmental impact — the current economic climate is squeezing their budgets and curbing their desire (and perceived ability) to prioritize sustainable options.
Descartes’ 2024 Home Delivery Sustainability Report found that although 57 percent of respondents are quite/very interested in sustainable home delivery services, 89 percent felt their willingness to pay more for eco-friendly delivery was impacted by the current economic environment and its bearing on personal finances, with 34 percent indicating economic pressures had significantly or drastically impacted the motivation to make sustainable choices.
Capitalizing on Consumer Interest
Despite the financial squeeze many are facing today, interest in purchasing goods from retailers with sustainable business practices, including environmentally-friendly home delivery options, remains strong. Notably, a significant number (38 percent) of consumers indicated they regularly or always make purchase decisions based on the environmental impact of the product or company, while 37 percent believe convenience and environmental impact are of equal importance when it comes to their delivery experience.
In examining online consumer sentiment of retailers’ sustainable delivery practices, the survey found that of those respondents that are quite/very interested in greener delivery methods, 57 percent favor combining orders over a period of time into a single delivery at the end of the week or, where possible, when there are multiple deliveries in their area (56 percent). Consumers are also quite/very interested in retailer input to guide their decisions, from eco-friendly delivery recommendations, such as green delivery slots (53 percent) and rating the environmental impact of the delivery options (46 percent).
Influencing Green Behavior
To retailers’ detriment, many consumers are still in the dark, not only about what sustainable delivery options are available to them but also about the associated cost benefits — a missed revenue-generating and reputation-building opportunity for e-commerce businesses. Indeed, the reticence to choose sustainable home delivery options stems partly from consumers’ misconception that the more environmentally friendly choice carries a higher price tag when, in fact, green delivery options can be the most wallet-friendly — welcome relief when consumer budgets are strained to the maximum.
Offering and educating the market about sustainable last mile practices that save the consumer money is an ideal opportunity for retailers to differentiate their brand as eco-friendly while reaping the bottom-line rewards of more efficient operations. Companies can pass on savings directly to consumers through sustainable delivery options such as increasing delivery density to reduce miles traveled and cut fuel and labor costs or offering free or low-cost delivery slots with long lead times to help flatten out demand and avoid costly, carbon-intensive management of seasonal or unpredictable volume peaks.
Cost savings aside, educating consumers to make delivery choices that decrease emissions (e.g., consolidated deliveries, “green” delivery slots using electric vehicles) helps satisfy their sustainability expectations — especially amongst millennial and Gen Z buyers — to build brand loyalty, drive repeat orders, and minimize churn. Indeed, with 56 percent of 18-34-year-olds reducing their online shopping this past year due to environmental concerns, retailers can’t afford to ignore the value of establishing themselves as a sustainable business through eco-friendly last-mile practices.
Johannes Panzer is head of industry solutions, e-commerce at Descartes, a provider of on-demand, software-as-a-service solutions focused on improving the productivity, performance and security of logistics-intensive businesses.
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Johannes Panzer is Head of Industry Solutions, Ecommerce at Descartes, the global leader in providing on-demand, software-as-a-service solutions focused on improving the productivity, performance and security of logistics-intensive businesses.