According to the MIT Real Estate Innovation Lab, carbon emissions from online shopping are 36% lower than those produced by in-store trips. While that’s promising news as the world races to combat climate change, there’s still more work to be done in minimizing retail’s environmental footprint. Reducing waste in ecommerce returns is the logical place to start.
In 2018, Fast Company reported that U.S. consumers received 165 billion ecommerce packages annually. While the number of packages being shipped may not be directly proportional to the overall ecommerce growth, we know that ecommerce grew 10.3% YOY in 2019, 32.4% YOY in 2020, and another 14.2% YOY in 2021. Even by conservative estimates, that growth translates to more than 200 billion packages annually.
Imagine that every one of those more than 200 billion packages contains a packing slip. If the average tree can yield about 15,000 sheets of paper, retailers would collectively waste more than 14 million trees each year just to supply a packing slip in each box.
Confirmation emails (or texts) allow retailers to communicate which items from an order are delivered in a particular box, and whether an order will be delivered in multiple packages. They can also provide a call-to-action button to initiate online returns, or a barcode (or QR code) for processing returns in-store.
The National Retail Federation reports that only 20.8% of ecommerce orders were returned in 2021, which means that return shipping instructions and labels were unnecessary in almost 80% of ecommerce packages.
With digital returns, customers can request and process a return through an online portal, and—in some cases—avoid printing a return label. Many retailers now offer customers the option of presenting a QR code to a courier like UPS, USPS, or FedEx, and letting the courier print the return shipping label.
A further iteration of digital return is the boxless return, which reduces both paper waste and fuel emissions by reducing the number of trucks required to transport returns back to retailers’ distribution centers. Boxless returns allow the customer to skip the boxing process. Instead, they simply show a courier or third-party representative a QR code. The courier then collects all the products and places them in recyclable polybags for a single, bulk shipment.
By reducing the volume of packaging, boxless returns also reduce the number of trucks needed to transport returns—an important step in lowering overall carbon emissions.
Best of all, retailers save as much as $0.10 to $0.15 cents per package on printing costs by eliminating return shipping labels and instructions from packages.
The one-box-out, one-box-in approach to returns is a relic, rendered obsolete by advancements in reverse logistics. With package returns representing about one-fourth of total ecommerce emissions, it’s an area ripe for improvement.
When fulfilling an order, a retailer may be forced to draw on inventory from different warehouses, necessitating multiple boxes and duplicative shipping costs. For example, a customer ordering five t-shirts from Old Navy could receive that order in two or three packages, depending upon which warehouse each item shipped from. If the customer decides to return those items, it’s more eco-friendly and cost-effective to return all of the unwanted t-shirts in the same package (an action that Old Navy’s online returns system can support).
Consolidating returns from multiple shipments (or multiple orders) into a single return shipment is easier for the customer, less expensive for the retailer, and better for the environment.
Just because an order is shipped from a warehouse in Washington to a customer in Kentucky doesn’t mean that order must be returned all the way to Washington. Utilizing a reverse logistics provider helps retailers tap a network of warehouses, making return shipping travel faster and cheaper.
Reverse logistics partners can help retailers develop rules within a digital return to optimize for shipping costs, warehouse space, categories of goods, or third party drop-shipments. Creating more return points also increases revenue by getting items back into the marketplace faster, increasing the potential for selling the item at—or close to—full price.
Eco-friendly policies aren’t just beneficial for the planet, they also appeal to customers. A Nielsen Study found that 81% of shoppers around the world believe that companies should help improve the environment, and 73% of global respondents would change their own consumption habits to reduce their environmental impact.
Returns are one of the few aspects of retail in which the opportunity to cut costs and carbon emissions align. Rethinking reverse logistics policies can help retailers save money, save the planet, and earn goodwill with customers.