Is sustainability the new loyalty in retail and eCommerce delivery?
Tesla electric cars are cool. They look cool, they are cool to drive and they are environmentally cool. While Tesla itself might hit the headlines for all the wrong reasons, one story that should be in all the press is that the company is making an electric long-distance lorry.
Yes, it sees the big future in electric vehicles being in delivery. And Tesla CEO Elon Musk is right. With choice and price no longer differentiators in shoppers’ minds, delivery has become a new battleground for many retailers. And while many still fight to be first to the door, others are starting see that the real delivery difference lies in being green and sustainable, rather than just fast.
In fact, across the retail industry, there is a growing shift towards being environmentally friendly, with the words ‘sustainability’ and ‘green’ being bandied about almost as much as ‘customer experience’ and ‘profit margin’.
The move is driven almost entirely by consumers, but retailers are starting to see that tapping into shoppers’ environmental fears can be as powerful at building loyalty as price cuts, loyalty points and next day delivery.
In fact, many are starting to see not being green as a deal breaker. According to research by YouGov, commissioned by click & collect provider Doddle, more than two-fifths (43%) of UK shoppers say they are now more likely to shop with a rival retailer if they offer a greater range of sustainable delivery options.
While consumers are going green in some areas of their lives – such as the adoption of reusable bags and coffee cups, or choosing products with less packaging – this hasn’t fully filtered through to the way they shop online. Only 6% always collect their shopping instead of having it delivered.
But this is changing. With urban congestion and air quality both issues in the spotlight shoppers are going to demand more from retailers in the future. Two-fifths don’t think retailers currently do a good enough job of offering sustainable options, and a quarter are annoyed that home delivery is often positioned as the default option, generating unnecessary emissions.
Greening the vehicles
However, going green doesn’t mean just abandoning home delivery all together, far from it. The convenience of online shopping with delivery is something now so entrenched that shoppers aren’t likely to give it up. The answer then lies in making delivery itself sustainable.
Shoppers are more likely to choose retailers that offer sustainable delivery, but most don’t want to pay extra for the option, according to another study, this time by Wincanton.
More than a quarter (26%) British consumers say they are likely to buy from a retailer that uses electric vehicles, while 32% said they are considering buying from retailers that are more environmentally friendly in the future. The main reason for choosing this option was caring about the environment, cited by 40%.
The demand rose amongst younger consumers, with 14% of consumers aged 18 to 34 actively choosing to buy from companies that use electric vehicles. This was considerably more than the figure for 35 to 54-year-olds at 6%.
However, only 10% of consumers were willing to pay more for delivery via electric vehicle, up to £8.80 per delivery. In addition, 48% said they would not sacrifice conveniences such as next-day delivery for the sake of a delivery via an electric vehicle.
According to Adrian Colman, CEO of Wincanton: “Consumers are becoming more aware of environmental and sustainability issues regarding all aspects of shopping and this affects where they choose to spend their money. Retailers need to analyse their business models and ensure they are meeting consumer demand for sustainability, as this could be the difference to remain competitive in today’s tough market”.
Colman continues: “It’s clear to see consumer attitudes towards the environment extend far greater than just ditching plastic straws. Today’s consumers are looking for retailers who share their ethics and can demonstrate how they are doing their part for the environment.
“Time and money are still important factors when it comes to shopping and delivery, but in an increasingly competitive retail space, it’s vital that companies choose a partner which supports their vision to implement a greener fleet and improve their credentials among their customers. Wincanton was the first UK 3PL to introduce production-level electric vehicles to its fleet and we continue to invest in green vehicles to offer our customers the best service while reducing harmful effects on the environment.”
Carriers going electric
Already many UK carriers are introducing electric delivery vehicles. DPD will now only order new vehicles that are electric – up to a 100 each year – while Hermes has 32 electric vans in its fleet and plans to add many more.
UK independent carrier Yodel is also going electric. It has invested £15.2 million in a fleet designed to reduce the environmental impact of its road-based operations. The investment includes new vehicles and trailers as well as technology to improve efficiency and safety.
For starters, Yodel has taken delivery of an all-electric 7.5 tonne light-duty truck, the first in its fleet. The Mitsubishi FUSO eCanter will initially be based at Yodel’s customer delivery depot in Hayes and used across London. It will be put through its paces to ensure that the subsequent electric vehicles are deployed in the right locations. Silent and emission-free, the state-of-the-art vehicle has a load capacity of up to four and half tonnes and is powered by six high voltage batteries.
The carrier has also invested in Microlise technology for all its tractor units and trailers, a total of more than 1,300 assets. This innovative software monitors factors such as speed, location, and road traffic levels. It reports back to Yodel’s state-of-the-art business control tower, allowing the team to view the network in real-time and adapt to dynamic conditions.
Microlise’s Android-based DriveTab tablet devices act as the main interface for driver communication and navigation. Journeys can be planned and monitored by the business control tower and instructions sent to the driver, while driving style can be evaluated and feedback provided to optimise driver performance. Yodel has already seen a 7% improvement in fuel efficiency since the introduction of the technology.
As part of its ongoing commitment to ensure the safety of its drivers and other road users, Yodel has fitted every tractor unit with a Microlise panic button, enabling drivers to alert the business control tower of an emergency.
On your bike
In addition, Yodel is also looking to expand its urban bicycle delivery offering. Yodel currently uses bicycle couriers to deliver parcels in central Oxford, Stevenage, Hereford and Brighton with plans to introduce them in Birmingham, London and Manchester soon.
Andrew Peeler, CEO of Yodel, explains: “This large-scale investment in our fleet is designed to improve efficiency and minimise the environmental impact of deliveries. I’m delighted that we’ve introduced electric to our fleet this Spring, and we have plans to expand our use of both pedal and electric power this year. “In addition, we have invested in technology to calculate the most efficient routes and evaluate our drivers’ driving style to further reduce our carbon footprint.”
Of course, Yodel is far from the only delivery company using bikes. Royal Mail has long built its reputation on bikes and continues to do so. It has recently introduced eight new electro-trikes (e-Trikes) to its fleet that offer pedal and battery power to add a greener tinge to its delivery options.
The six month trial in Cambridge, Sutton Coldfield and Stratford in London adds to Royal Mail’s exciting fleet of more than 100 electric vehicles – which it is also planning on expanding over the summer.
Will Norman, London’s Walking and Cycling Commissioner, is in favour. “I’m delighted that Royal Mail is trialling e-trikes which will take polluting vehicles off our streets – helping to reduce congestion and clean up London’s toxic air. I hope this trial will be extended and other delivery companies follow Royal Mail’s lead so that many more communities can benefit.”
Going green will unlock customer loyalty
There is no doubt that sustainability and the greening of retail and eCommerce are becoming a top priority among consumers and it is something that will have an impact on who will and won’t shop with a particular brand.
Retailers – and logistics providers – should be thinking about the way different audiences prioritise sustainability. According to the YouGov-Doddle study, while older shoppers are more concerned about packaging and clothes waste, women are more likely than men to prioritise sustainability in their day to day life, with 73% of women recycling clothes and 43% choosing products with less packaging – compared to 47% and 31% of men respectively.
Younger consumers in the 18-24 year old range are adopting more environmental habits, with more than half of them (53%) planning to use direct home delivery less in future – nearly double the number of 45 year olds (29%).
All consumers are becoming more conscious of their impact, with 59% trying to trip chain – combining multiple tasks in a single journey – more than they used to. 76% say it’s to cut costs, but over half (54%) say they are doing it to be more sustainable.
These changing attitudes could impact retailers’ bottom lines if they don’t give their customers green choices. Half (50%) only want to support retailers with a wide range of sustainable options in future – and for younger shoppers – a significant 56% would shop with a competitor who offered more sustainable options.
The cost burden may seem high, but shoppers are willing to put their money where their values are and pay a premium for sustainable options. Nearly half (47%) would pay £1 or more, and over a quarter (26%) would be happy to pay £2 or more.
Tim Robinson, CEO of Doddle explains: “As shoppers continue to become more environmentally conscious, retailers need to mirror this in their offer. While convenience remains important for customers, it’s not enough for sustainable delivery to be an add-on or after-thought anymore – in an already tough environment, it will set brands apart in their battle for customer loyalty.
“With a quarter (26%) of consumers actually surprised by how many of their favourite brands still only offer home delivery, retailers need to make alternatives like click & collect, consolidated deliveries and store kiosks more prominent at checkout and be explicit about the environmental benefits.”
Doddle has also reviewed delivery figures to understand how embracing click and collect can benefit the environment. Doddle has estimated that there could be more than an 80% reduction in delivery vehicles on the street if everyone used click & collect/pick-up-drop-off points. This would be the extreme, but even moving towards this in a small way would have a big impact on the environment given every kilometre of a delivery emits 147g of CO2.
While Doddle’s view that delivery is made purely to a local drop off point, forcing the shopper to do the last mile part of the journey themselves is perhaps fanciful, it does show that retailers and deliverers need to look seriously at changing how they deliver.
Making fewer journeys to fewer points is, of course, one way to cut emissions. Using AI and other smart tech to do more efficient routing is also going to make cuts in pollution. But these relate only to ‘dirty diesel’, a very 20th Century technology.
The real advantages lie in looking at how to tap into new technologies for powering vehicles. Pedal power is one, but electric vehicles are surely the way ahead. At scale they are going to be cheaper and cleaner to run for all carriers.
More powerfully, the drive by consumers to want to have environmentally friendly companies doing their deliveries – and adjusting their shopping and shipping loyalties accordingly – should make the move to green fleets assured in the coming years. Elon may be aiming for Mars, but he’s looking to cleanly delivering here in Earth.
About Parcelhub – Part of the Whistl Group
Save time and money. Increase delivery performance. Enhance customer experience.
Parcelhub is a bespoke and proactive multi-carrier delivery management solution. Flexible and scalable, its services integrate seamlessly with Linnworks, providing hundreds of multi-channel retailers, global brands and wholesalers with one access point to 20+ carriers and 600+ services.
Distributing more than 6 million parcels on its own carrier contracts every year, Parcelhub’s free multi-carrier shipping software grants hundreds of national and global businesses access to ‘pooled volume’ discounted rates from its carefully selected range of carrier partners, including Yodel, Hermes, DPD, DHL, UPS, DX, Parcelforce, CollectPlus, SkyNet, ArrowXL, Interpost, Panther Logistics, Direct Link and Palletforce. Dedicated proactive parcel management comes as standard.
Parcelhub is part of the Whistl Group. Whistl is the leading delivery management company enabling customers to get their letters, leaflets or parcels to customers efficiently and cost effectively both in the UK and internationally. It is headquartered in Marlow with 8 depots and 2 fulfilment centres across the UK handling 3.8bn items a year. The company is privately held with over 1,500 employees and a turnover in excess of £600m. It has grown significantly over the years and is now expanding its presence in the eCommerce sector offering fulfilment services to customers through a seamless experience from first click to final delivery.