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How the online trade affects the climate

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How the online trade affects the climate

Shopping online has been growing rapidly for years. At MediaMarkt and Saturn, too, the webshops have an important role to play within their multichannel strategy. But e-commerce has also been accused of being particularly harmful to the climate because of the high level of harmful emissions from transport. Should we give up online shopping to protect the environment? Well, the issue’s not as simple as that, so let’s take a closer look.

Shopping online is convenient. Orders can be placed where and when you wish, anything you don’t like can be returned at the retailer’s expense, and if you’re not at home when the courier calls, they’ll often come back the next day. It’s all very customer-friendly. However, these multiple trips and frequent returns result in huge amounts of greenhouse gases being emitted. Accordingly, online retail is believed to be much worse for the climate than bricks-and-mortar shops.

Then again, this comparison isn’t quite as straightforward as it might seem. This was revealed by a study conducted in 2015 by the DCTI German CleanTech Institute entitled Climate-Friendly Shopping. Carried out on behalf of the Otto Group, it’s the most thorough study on this topic ever. Otto is the second biggest player on the German e-commerce market after Amazon and has for decades been a pioneering company as far as sustainability is concerned. The study examined in particular the transportation involved in mail order and physical retail. And it concluded that on balance, customers cause more carbon emissions when they buy from physical shops compared to online retail. The main reason is that when people purchase goods from a store, they usually drive there – and their aggregated individual car journeys produce more exhaust fumes than the combined transport of parcels delivered by couriers. Moreover, parcel delivery companies have an economic incentive to plan their routes as efficiently as possible. This reduces the average mileage per parcel and the CO2 emissions per purchase by about 10%.

It’s all down to the customers

The difference in carbon footprint is especially large when consumers live in rural areas and can’t always rely on public transport and good transport links, forcing them to drive a long way to reach the shops.

However, the study also shows just how much consumers can reduce their own shopping carbon footprint by changing their behaviour, especially if they live in an urban area. If people take the bus or cycle to the town centre to do their shopping, they can greatly reduce the CO2 emissions they cause to a level which is better for the climate than buying online. But the most important rule which all online shoppers should bear in mind is that they can significantly reduce their environmental impact by combining orders and above all by avoiding returns. Or to look at it another way, all the theoretical environmental benefits of online shopping are quickly cancelled out by returning too many items. In a nutshell, too many returns quickly ruin your carbon footprint! Free shipping coupled with free returns policies means that many products are ordered without a second thought and then sent back. The rate of returns varies from one line of business to the next. In the fashion sector in particular, the volume of returns has recently mushroomed, giving it a correspondingly negative carbon footprint. In Germany alone, more than 250 million parcels are returned every year.

Impact of packaging, energy and leisure

Another reason why the results of the climate impact comparison aren’t conclusive is because the studies carried out so far have ignored several relevant factors. They include the high amount of packaging used by online retailers on the one hand, and the environmental impact of heating, ventilating and lighting shops of all sizes on the other. Apart from the climate implications of transportation, a long-term study by the Viadrina European University and the HHL Leipzig Graduate School of Management in 2017 titled ‘Impact of E-Commerce on Energy Consumption’ revealed other effects caused by changes to online shoppers’ behaviour. For example, it found that people who order online normally also have more free time – which they frequently spend on activities consuming additional energy.

The upshot is that there’s no clear-cut answer to whether online retail or bricks-and-mortar shopping is better for the climate. At any rate, this is an issue which will remain relevant as internet shopping continues to boom. In 2017 alone, the e-commerce market in Germany grew by 10.5% to €48.9 billion. And in 2018, it’s been forecast by the HDE German Retail Association to reach €52.6 billion.

At MediaMarkt and Saturn, we’re aware of these effects and have resolved to substantially reduce the carbon emissions of our business activities at all levels. In 2016, for example, we switched all our stores in Germany to certified green electricity and we’re working non-stop to reduce the energy consumption of our stores. Furthermore, we’re also reviewing our logistics processes. We’re endeavouring to optimize the carbon footprint of our logistics and transport chains by means of reorganization and improved efficiency.

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