The battle for values-driven customers: three steps for reducing emissions in the last mile

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This article is brought to you by Retail Technology Review: The battle for values-driven customers: three steps for reducing emissions in the last mile.

By Mattias Gredenhag, CTO, nShift

Being a successful retailer used to hinge on having the best products and lowest prices.  For more and more customers today, however, a retailer’s commitment to lowering their environmental impact is becoming a key factor.

This is raising the stakes for multichannel and ecommerce retailers, with their carbon-intensive supply chains and last-mile delivery networks.  Conventional logic has it that as their businesses grow, so, too, will their environmental impact - from delivery van emissions to waste sent to landfill. 

And that raises the possibility that they could, eventually, lose hard-won customers to newer, seemingly greener, rivals.  According to one study some 71% of consumers prefer to buy from companies that are aligned to their values. 

How then can retailers do their bit to protect the environment, and at the same time grow their business?  They must aim to be more environmentally efficient than their competitors – and securing the support (and loyalty) of customers is crucial.  

There are three areas which can help with this: widening delivery choices for customers, rethinking emissions data, and embracing the circular economy.

Ensure more delivery choices, including low or zero emissions options

Widening the delivery choices available to customers is a straightforward way for retailers put customers firmly in control of their own carbon footprint.  Seeing one’s carefully chosen, eco-friendly goods unloaded from a diesel-powered van doesn’t just look incongruous, it can undermine the customer relationship.

Most retailers already offer their customers delivery options based on speed or cost.  Emissions should also be part of that mix.  With more choices, spanning more modes of transport and emissions profiles, customers can choose those which best reflect their values. 

Forward-looking brands are going further still, inviting customers to donate a small portion of delivery charges to good causes that are backed by the retailer. It costs the customer nothing but provides a further opportunity to engage. In the process, customers move from being spectators to active participants in retailers’ sustainability efforts. 

Gaining a tighter grip on emissions data

Anyone wishing to reduce their emissions must be able count them and understand where and why they are high.  At the same time, regulatory pressure is growing on businesses to produce clear, accurate environmental reporting.  

An example of this is the Corporate Sustainability Reporting Directive (CSRD), which takes effect in June 2024.  CSRD will require some 50,000 companies doing business within the European Union (EU) to report annually on their past and present greenhouse gas emissions.

Current approaches to emissions reporting, which rely on manual analyses done a few times a year, aren’t up to the job of developing emissions-cutting strategies that work.  Retailers need reliable, verifiable emissions data that is far more granular and dynamic.  They need to:

  • Calculate and report emissions for all shipments in a single place
  • Reflect best practices for tariff calculation, for example by using standard tariffs provided by the Network for Transport Measures (NTM)
  • Measure emissions by CO2e (carbon dioxide equivalent), a more accurate and comprehensive measure than CO2 alone
  • Make sure that data for reporting is uniform 

This level of detail enables retailers to set realistic emissions targets based on real-world data, rather than theoretical projections.  It makes it possible to identify “quick wins” for emissions reduction, particularly in the last mile.  It also makes it easier and quicker to meet the growing regulatory demands for accurate emissions reporting, such as CSRD, based on real world data.

The circular opportunity

The drive towards sustainable retail is prompting growing numbers of retailers to explore how they can give used items a new lease of life.  “Circularity,” repairing or up-cycling used products for resale, enables retailers to reduce waste and earn additional revenues.  Plus, they can communicate powerful brand messages about product quality.  

The challenge lies in securing ready supplies of the “right” used products.  There is greater residual value in a pair of vintage jeans than in an old T-shirt. And that is where mature, flexible reverse logistics capabilities can come into play.

With the right customer engagement, and a simple user experience, retailers can recover the inventory they need for resale.  At the same time, they are likely to rekindle long-standing relationships, encourage repeat purchase, and underscore their environmental commitments.  That makes circularity a win-win-win for loyalty, revenues, and the planet

Many of the environmental challenges that face the supply chain are outside the control of individual ecommerce businesses or multichannel retailers.  But they can achieve an efficient environmental impact, in which they grow more while polluting less.  The right logistics capabilities, backed with technology which makes the experience simple and easy for customers, are a vital part of retailers’ journey to net zero.

Read more about how nShift helps retailers build delivery and reverse logistics capabilities which build loyalty and sales while minimising emissions.

[1] https://rb.gy/nhq28 

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