Why Sustainable E-Commerce Logistics matter?

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Discover key challenges and solutions that could make your brand more sustainable, drive your business and build loyalty.

E-commerce is accounting for an increasingly larger proportion of the retail sector. Yet one of the biggest challenges facing the online industry is finding sustainable solutions for packaging, transportation and returns.

E-commerce packaging uses several billion trees a year for cardboard alone and tonnes of CO2 are being released into the environment as part of the returns process.

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Customers demand action!

As statistical data shows, two thirds among Generation Z and the Millennials see the environment as priority in their shopping behaviour. Moreover, more than 8 in 10 EU citizens see the product's impact on the environment as a criteria when shopping online. The shift towards more sustainable shopping requests measures towards greener and more responsible options. Following this trend can boost your brand image and customer trust.

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1. Packaging is oversized, expensive and unsustainable

The average shipment box is dropped 17 times during the shipping process. Therefore, retailers are doing everything to make sure the customer receives the product in perfect condition. In other words, over-packaging. According to a study on behalf of the Bundesverband Paket and Expresslogistik (BIEK), the packaging materials have increased by 37% in the last three years and shipping material caused 769,000 tonnes of waste in Germany.

Reusable Materials and Creativity are the solution

Reusable plastic crate produces 88% fewer carbon emissions than a single-use cardboard box and 64% fewer emissions than a box made of mixed materials. Players like Repack help you update your user experience with reusable packaging, which can be used over 20 times.

Additionally, a new packaging box suite (standardisation of packaging) that better fits shipment means less trucks, and a more efficient use of resources.

There is a great example led by Asket Company, that wants to reduce their environmental impact across the entire value chain. They have investigated limitations of reusable and recyclable solutions and found out that the most feasible and effective packaging solution would be to both remove and reduce the amount of resources used. Following a 12 month packaging overhaul project, they have managed to reduce packaging material by 22%, cut down CO2 emissions by 47% and reduce costs by 45%.

2. Parcel Shipping is one of the biggest contributors to Greenhouse Gas Emission

Shipments are broken down into individual delivery packages which are responsible for 15 million metric tons of carbon dioxide released into the atmosphere, due to transportation. In addition, courier collections have a 12% failure rate which makes emission up to 5 times higher.

First Things First: Avoid, Reduce, Compensate

A great example by DHL combines both methods: they started using electric street scooters and cargo bikes within cities, and compensate other emissions through investment in nature conservation projects.

Zalando, for example, gives its customers the opportunity to pay an extra 0.25€ per order for climate-neutral shipping. A survey from Idealo showed that 2 out of 3 customers are open to pay an extra fee for climate neutral shipping.

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3. Increasing returns rates at the expense of your business and the planet

Bracketing or modern consumer behaviour means 51% of shoppers overbuy online, knowing they will return unwanted items. This makes return rates increasingly high. Worldwide, a total of 17 billion items are being returned each year. The impact on the environment has been heavily discussed and the pressure is on retailers.

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Returns management and circular economy must be part of your business strategy  

If You Haven’t Started, You’re Already Behind.‍

Holistic approach, in simple words, is looking at the product’s life cycle: packaging and design, logistics methods, and end-of-life management. Let’s focus on the last part of the cycle and how a product can live longer. Donations, second-hand market, repairing, product reuse and renting are a few examples of what can be done in order to avoid an item ending up in landfill.

Tools like 8returns gather and analyze data, which gives you valuable insights in spotting behavioral patterns or product errors. With that you can minimize returns and encourage changes in consumer behaviour.

It’s up to retailers to embrace smarter packing and logistics solutions to save money, minimize returns and fulfill customer expectations. That is the way your brand will be recognized and associated as a lead of the change.

It’s a step in the right direction. Join 8returns in the mission and do your bit for the planet!

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Sources:

Zerowaste Europe

From ‘why’ to ‘why not’: Sustainable investing as the new normal

Ecommerce Statistics for 2022 – Chatbots, Voice, Omni-Channel Marketing

The Return of the Package

Sternglas: Using online returns to optimize efficiency and boost customer satisfaction

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As diverse as the world of e-commerce has become, there are individual factors that are familiar to almost every retailer: For most companies in e-commerce, returns management is a necessary evil that can initially be controlled to some extent in day-to-day business, but with increasing size can quickly lead to losses in efficiency, productivity and ultimately customer satisfaction and sales.

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Sternglas has also faced increasing challenges in the area of returns management in recent years. For a long time, the Hamburg-based company, which very successfully designs affordable timepieces of quality for everyday use, handled returns completely manually.

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Kerstin Wacker, Head of Logistics at Sternglas, tells us about the difficulties encountered with manual returns, how the switch to automated processes provided the solution, and how returns can be used not only as a method of obtaining customer feedback but even for product optimization. 

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Previously difficult returns processes: Blocking team and customers

Since its founding in 2016, Sternglas has become an established brand in the watch industry due to its high-quality products and good accessibility off- and online: In addition to POS sales, online sales accounted for more than three-quarters of the watchmaker's sales in 2020 - with sales shifting even more to online retail in 2021 as part of the lockdown. In the beginning, the online orders were packed and shipped by a logistics partner. Since August 2018, the company's own Sternglas warehouse takes care of shipment and returns.

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"Even if many customers are convinced by their watch at first glance, there are still one or the other who would have liked the design differently and who then register a return," Kerstin tells us. For many customers, the final purchase decision is only made when they see the watch on their own wrist for the first time, and it is often small details that cause a return. 

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"Until a few months ago, we handled the entire returns process manually. Our logistics department recorded all returns in an Excel spreadsheet. Then an email went out to the customer with the return label. When the return actually arrived, we had to look for them in the Excel file and update the spreadsheet. At the same time, we had to refund in our shop system, create a credit memo and finally update our inventory."

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This process clearly lacked friction and customer-friendliness on the buyer's side: To arrange a refund, customers at that time first had to write an e-mail to Sternglas. After receiving the return label, buyers then printed it out themselves at home, which often led to problems because "not everyone has a functioning printer. I don't have one myself," says Kerstin.

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Capturing returns and customer feedback - with an easy returns portal

The turning point came for Sternglas in August 2021: since then, they have relied on the returns portal from 8returns - after just one call and a handful of clicks:

"The implementation of 8returns couldn't have been easier. We had an onboarding session where we were introduced to the tool and then everything was handed over to us ready for immediate use. Even our corporate design and logo were already incorporated.

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All we really had to do was integrate Shopify and DHL and create our return cases. I slightly adapted the email templates to our tone of voice, but that wasn't a big effort either. After that, everything was in place."

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After seamlessly switching to 8returns, they now benefit not only from time and labor savings but also from higher customer satisfaction:

"The time savings we have experienced since the changeover are enormous. No more tedious Excel spreadsheets, no more manually updating error-prone lists. We also no longer have to log into the shop system for refunds - that's all done in the 8returns software."

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The biggest advantage, however, is for customers: They no longer need to write an e-mail to Sternglas for returns, because they can now conveniently process the entire exchange via their returns portal. And customers no longer need a printer either. The label simply appears as a QR code on the cell phone and is scanned and printed out at the parcel counter.

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Now Sternglas' returns flow is significantly more relaxed and efficient. The logistics department is relieved and customers are more than satisfied - which, by the way, is also reflected in positive reviews. Kerstin tells us that she can read there again and again how well Sternglas' service works.

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Product optimization through returns solution

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Thanks to the new system Sternglas enormously benefits from the traceability of return reasons. This not only provides more clarity in sales but additionally influences product design:

"What we couldn't understand at all in the past was why watches were being returned. Sure, every now and then one customer takes the time to give us feedback in an email. But when you have to write an email just to exchange a product, you often don't feel like explaining the 'why' in detail to the retailer.

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Since 8returns, things are different now. In the returns portal, our customers can simply select the reason for returning and also give additional feedback - and most are very happy to do so. This information is very valuable to us."

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Kerstin further explains with an example:

"For example, one watch that we thought was very nice was surprisingly returned more often. We now know why: the movement was simply too thick for many customers. Of course, we shared this information on to our production department, and our colleagues there replaced the movement with a flatter model. That cost a bit more, but since the model now runs much better, therefore pays off."

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A new returns portal for a new era

Like many e-commerce brands, Sternglas faced growing challenges as it grew. A cumbersome returns process was creating avoidable inefficiencies for everyone involved: the logistics department, the customers, and at Sternglas, even the design team.

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Thanks to 8returns' returns portal, all sides now benefit from automated processes: Customer support and logistics save time, customers don't have to send emails or fill out forms, and the product team knows exactly how to make the watches even more perfect.

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All images courtesy of Sternglas.