Global e-commerce is booming, but are consumers happy with the environmental cost? – The Drum

As part of The Drum’s Globalization Deep Dive, we take a look at the environmental impact of the global e-commerce boom, and what brands are doing about it.

The pandemic accelerated the uptake of e-commerce globally as people turned online in the face of lockdown restrictions. According to Forrester, there was a 25.7% surge in 2020 to make e-commerce worth $4.2tn and it expects retail sales worldwide to climb a further 16.8% in 2021.

It has also meant more customers than every are buying from retailers beyond their borders. Zion Market Research has found the global cross-border e-commerce delivered revenues to the tune of $562.1bn in 2018. By 2027 that figure is predicted to reach nearly $5tn.

This comes in the face of massively changing consumer expectations for product availability and delivery.

“The base level of shopper expectations have shifted. When Amazon launched Prime, shrinking standard delivery times from weeks to days, it was a game changer. However, it has only taken a few years for anything more than a couple of days to be completely unacceptable,” says Rob Sellers, head of retail at VCCP.

“Wherever products are manufactured or however complex the supply chain to get them to our houses, we expect almost immediate fulfilment.”

KPMG’s 2020 UK retail report found that 43% of consumers now select next-day delivery, a 4% rise on last year, while a massive 73% say they would have been dissuaded from a purchase if there had been a delivery charge associated with this, compared to 57% a year earlier.

The duration consumers are willing to wait for free shipping is also falling, from an average of 5.5 days in 2012 to 4.5 a year ago.

“But the average shopper has absolutely no appreciation of the complexities of the global supply chain,” continues Sellers. “They trust big platforms and retail brands, like Amazon, Nike and John Lewis, to handle that for them. What they care about is getting the product they want – when they want it and at a price they want.”

And at the moment, that comes at a huge environmental cost. According to Boston Consulting Group, transportation activities account for 17% of global greenhouse gas (GHG) emissions.

Over 90% of world trade moves by sea with maritime shipping accounting for 3% of all global emissions – a figure that could rise to 10% by 2050 according to experts.

Meanwhile, on land, the World Economic Forum estimates a 36% uptick in the number of delivery vehicles on our roads in the next decade.

But KPMG found that consumers also expect brands to be more sustainable in their supply chain. Over a third (37%) of shoppers now base their buying decisions on retailers’ ethical and sustainability policies, while 67% consumers claim to care more about the environmental impact of the goods they buy today than they did five years ago.

Nearly half (43%) of shoppers were frustrated or dissuaded from the purchasing process due to the packaging used, and with a growing expectation for …….

Source: https://www.thedrum.com/news/2021/10/22/global-e-commerce-booming-are-consumers-happy-with-the-environmental-cost