Sustainability in Last-Mile Delivery: What Consumers Want and How MFCs Can Help
Across industries, sustainability continues to grow in importance—both for organizations and the customers they serve. But in our age of digital convenience, consumers typically expect rapid service, too. When it comes to the last mile, companies that can find a way to achieve both may enjoy a competitive edge.
Here we’ll take a look at the results of two studies that provide further insights about what consumers want regarding sustainability in last-mile delivery, as well as how micro-fulfillment centers (MFCs) can help.
Challenge vs Opportunity
According to the results of a recently released Descartes report, the majority of consumers surveyed weren’t satisfied with the sustainability efforts of retailers when it comes to delivery.
The study, Retailers: Sustainability is Not a Challenge, It’s an Opportunity, included over 8,000 consumers across nine European countries, Canada, and the United States.
Results indicated that:
A mere 38% of consumers “felt retailers were doing a good job of using sustainable delivery practices.”
More than 50% indicated they were “quite/very interested in environmentally friendly delivery methods.”
54% would be “willing to accept longer lead times for an environmentally friendly delivery.”
“The mistake that many retailers are making is viewing home delivery sustainability as yet another challenge from the consumer instead of an opportunity to capture market share, reduce delivery costs and help the environment,” said Chris Jones, EVP, Industry and Services at Descartes in a statement. “The study shows that many consumers prefer to buy more from those retailers with superior sustainable delivery practices and to take eco-friendly delivery options that reduce environmental impact and delivery costs at the same time.”
According to the statement, specific consumer sentiment dynamics analyzed included:
How the sustainability of retailers’ delivery operations “impact purchasing decisions”
How consumers “evaluate retailer delivery sustainability efforts”
“Which goods are most impacted by sustainable delivery performance”
“How consumers want to receive goods”
The “changes in purchasing and delivery decisions that consumers are willing to make to help the environment”
How “the importance of sustainable delivery varies by geodemographic factors”
The “influence of geodemographics on buyer behavior”
The “delivery decisions consumers are making”
What consumers expect regarding “retailers’ sustainable delivery efforts for the future”
Posted on the Descartes site, the comprehensive report provides further details about the results. Though country-specific results vary, the overall findings demonstrate the importance of sustainability in various contexts.
Among those surveyed, 45% rated “helping the environment” as “quite/very important in their daily life” and 39% said they either “regularly or always” make purchasing decisions “based upon the company’s or product’s environmental impact.”
Age mattered, since among respondents aged 25-34, 42% said they base their purchasing decisions on environmental impact—but only 34% of those over 65 said the same.
The type of product mattered, too: “The two product categories causing consumers to think twice about the environmental impact of online buying and home delivery were grocery (35%) and clothing and footwear (35%).”
And in those two categories, 40% of consumers said they’d buy more groceries and 39% more clothing and footwear from companies that could demonstrate superior supply chain sustainability compared to their competitors.
Regarding delivery, 50% of respondents “were quite/very interested in an environmentally-friendly delivery method.” Popular options in this context included “combining orders or having the seller recommend the most sustainable delivery option.”
Descartes underscored the power of combining sustainability and branding efforts:
“Companies that do a good job getting themselves branded as environmentally friendly stand a better chance of achieving more profitable home delivery operations. A significant number of consumers (54%) indicated they would be willing to accept longer lead times from an environmentally friendly company. Longer lead times provide more options to improve the efficiency of the delivery which almost always results in a lower carbon footprint.”
Additionally, 20% of participants said they would be willing to “pay more for a delivery from an environmentally friendly company.” Age mattered here, too, with Gen Z and Millennials (27%) more willing to do so than respondents aged 55 and over (14%).
Although convenience outranked environmental impact overall (40% vs 23%, respectively), 37% of those surveyed rated them as equally important.
In aggregate, Descartes said “60% of consumers have environmental importance expectations for their home deliveries.” Since this is the case, the firm noted that “online retailers that can provide convenience and show greater sustainability” will hold a uniquely competitive edge.
In this recent SupplyChainBrain video, “Achieving Sustainability in the Last Mile,” host Bob Bowman is joined by Dan Nevin, general manager with Inmar Post-Purchase Solutions, to discuss some of the ways retail delivery services are adapting to create more sustainable delivery options.
How MFCs Support Last-Mile Sustainability
Although various strategies can support last-mile sustainability—such as the use of drones, delivery robots, and electric vehicles (EVs)—they don’t currently enjoy the same level of effective development and deployment as MFCs do.
An Accenture report released last year, The Sustainable Last Mile: Faster. Greener. Cheaper., demonstrated how MFCs can make a difference in last-mile sustainability efforts.
According to a press release, the study—conducted in collaboration with Frontier Economics—assessed the impact of using MFCs across Chicago, London, and Sydney and found that fulfilling just half of the e-commerce orders in those cities could “significantly” reduce the amount of traffic and resultant “harmful” air emissions. Based on the results, Accenture predicted that “last-mile supply chains using MFCs could lower delivery vehicle-related emissions 16%-26% by 2025.”
The power of MFCs in this context is all about location, location, location—since they make it possible to store inventory closer to the customer in various frameworks—including “in-store click and collect points, automated locker storage facilities, and stand-alone micro-warehouse facilities.” “Increasing the use of MFCs to enable same-day or next-day deliveries provides retailers and postal and logistics organizations with operational benefits while simultaneously creating significant positive environmental and societal impact,” according to the study. “The carbon footprint of the last mile has long been an environmental and societal challenge,” said André Pharand, a managing director at Accenture who leads the company’s postal & parcel practice in the statement. “It’s time to take action and make the last mile supply chain more efficient, less expensive, and more sustainable. Organizations with innovative local fulfilment strategies and that lead in digital adoption and sustainable business practices will become tomorrow’s industry leaders.”
In the following SupplyChainBrain video, Pharand delves further into study results and discusses how local fulfillment models like MFCs play a key role in last-mile sustainability efforts.