März 19, 2019

Opportunities and challenges of a climate- and resource-friendly delivery of goods from the point of view of online retailers)

Opportunities and challenges of a climate- and resource-friendly delivery of goods from the point of view of online retailers)

The importance of online trading is steadily increasing both nationally and internationally. According to a forecast for 2020, a market volume of 354 billion euros will be achieved in the clothing sector. The rapid increase in parcel volumes, but also the high number of returned goods (returns) pose new challenges for online retailers. Innovative solutions are needed to make the delivery of goods to customers more efficient and climate-friendly on the one hand and to reduce cost-intensive and climate-damaging returns on the other. We asked eight renowned online retailers how they assessed the current situation in the apparel sector and which innovative delivery strategies are finding their way into their industry.

Corporate Social Responsibility (CSR) is a top priority for all online retailers interviewed, especially in the areas of purchasing, production and workplace design. By contrast, a climate- and resource-friendly supply of goods still plays a subordinate role. For example, financial and practical overlaps usually predominate when commissioning parcel suppliers. In addition, according to the experts, the increased use of new and climate-friendly supply options (e.g. freight wheels for fine distribution, railways, e-vehicles) can only be moderately influenced by one's own company, since this is more ascribed to the field of action of courier express parcel service providers (CEP). If, however, customers in the future increasingly speak out in favour of sustainable supplies, this topic will gain in importance within the company.

In contrast to international studies which show a return rate of 55 percent in the clothing sector, this is much lower among the online retailers surveyed with an average of 20 percent. There is a strong correlation with the size of the company. Larger companies in particular are struggling with a higher return rate.

However, even small and medium-sized companies, returns are a thorn in the side from a sustainable and economic point of view. Some of the interviewees are toying with the idea of introducing returns with costs in the future. However, this method could also lead to a loss of customers. The experts also believe that the payment options available have an influence on the returns rate. For example, customers who pay in advance send back significantly less goods than customers who order goods "on account". For every third respondent, "selection orders" are an increasing problem: Customers order a product in different sizes and colours and then return the unselected ones. To minimise cost-intensive and climate-damaging returns, online retailers apply preventive measures such as telephone enquiries, simplified product descriptions, professional and colour-true product illustrations as well as more precise size information and-measurement methods.

With regard to the company-specific relevance of the innovative strategies "Gamification", "Persuasive Design" and "Machine Learning" (ML) researched in the course of "Think!First", the following picture emerged: Although they had previously only been used rudimentarily in their own online shop, almost all online retailers see great potential in these innovative strategies, both to sensitize customers for sustainable supply and to create economic corporate advantages. Above all, improved product information (e.g. size information for clothing by ML) and motivating incentives (e.g. rewards in the form of discounts, playful awards, comparison with other buyers) are attributed with high potential to positively influence the return behaviour of customers.

The involvement of customers in the ordering process is of great importance for the Think!First project. Choices that go beyond delivery times (e.g. standard, express, same-day shipping) and sometimes alternative supplier addresses are still limited. What is needed are innovative approaches that broaden the scope of action for customers with regard to sustainable supply of their clothing, e.g. a choice of sustainable means of transport, longer delivery times in favour of a higher utilization of supply vehicles, or the selection of precise delivery times are still limited. Most online retailers can imagine implementing customer-centric Think!First strategies in their own online shops in the future. However, a positive in-depth analysis and aptitude test are required first. Against the backdrop of increasing competition and increased efforts to satisfy customers, the strategies mentioned are seen as necessary modernization measures. The biggest hurdles for the operational implementation of innovative supplier strategies - especially for small companies - are low personnel, time and financial resources as well as a lack of specialist know-how. The latter in particular reinforces the interest of all experts in the Think!First research project.

Our sincere thanks go to the participating companies Apflbutzn, Avodado Store, Blue Tomato, Chic Ethic Fair Trade Shop, Gary Mash, Grüne Erde, Gudrun Sjöden and Zerum.