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Sustainability and online grocery shopping

21 January 2021

Despite the evolving challenges over the past 12 months, leading supermarkets and food retailers have been successfully keeping the country well-fed and supplied, all whilst doing their utmost to keep their staff and customers safe.

Making sure that shelves are well stocked and that safety measures are in place to ensure stores remain Covid compliant takes huge efforts on the part of retail businesses. Like the rest of us, they were given very little warning of the changes that were about to happen at the start of 2020, and deserve our thanks.

This ability to adapt quickly has meant that some food retailers have seen positive outcomes from the pandemic that may have otherwise taken years to develop. For example, people were six times more likely to search for “veg boxes” at the start of the crisis than they were at the same time in 2019. It has made many people re-examine how we get our groceries and where they come from.

The rise of online grocery shopping

When the first lockdown started a lot of people made the move to online delivery services rather than risking venturing into store. This change in shopping behaviour has continued throughout 2020 and into 2021 as further lockdowns have been announced. This change in shopping behaviour has meant that supermarkets have had to, again, adapt quickly, making sure that they have enough staff to stock the shelves, pick the orders and deliver it to people at their homes.

To give some perspective to this growth, in the UK, online grocery sales took two decades to go from zero to around 7 per cent of total sales. It then went from 7 per cent to 13 per cent in about eight weeks at the beginning of the first lockdown.

However, despite the huge increase in demand, providing online grocery shopping to customers presents a number of challenges. It’s time-consuming requiring additional staff to start early in the morning picking the shopping lists for customers, as well as making sure that there are enough delivery slots available, and enough drivers to deliver the groceries. This has meant that the Covid-19 outbreak has effectively moved sales from the most profitable channel – instore, to the least profitable channel – online.

And whilst the pandemic restrictions will decrease at some point, its unlikely that everyone who has made the switch to online will be returning into stores the same way that they had done previously, making this shift in behaviour permanent for many.

All of this will require some changes to the way that supermarkets operate in the long-term.

The sustainability challenge

The challenge facing retailers now will be meeting the demand for online deliveries but in a way that is efficient and environmentally sustainable. Profitability for home delivery companies is all about last-mile efficiency – how cost-effectively they can travel the last mile but another big problem is that the last mile also tends to generate the greatest carbon emissions.

As the number of deliveries increases and the amount of miles covered by the delivery fleet grows, there will be a huge impact on the carbon emissions produced by the retailer. When shoppers get in their cars and travel to their nearest supermarket, they are responsible for the emissions they produce but with online delivery, the responsibility to reduce these emissions sits with the retailer.

There are many ways that the impact can be mitigated, and the measures needed will both require new technology and encouraging slight changes in customer behaviours. Here are just some of the ways in which a retailer could react:

  • Electric delivery vehicles – we are still some way from having electric delivery vehicles commonplace on our roads but looking ahead making sure that the infrastructure is in place to make the transition to electric is vital if deliveries are to continue seamlessly. Fast charging points for fleet vehicles as well as increasing the use of renewable energy will help reduce emissions.
  • Larger basket values – by increasing the number of items being purchased and delivered, carbon emissions can be decreased by reducing the amount of deliveries that are needed. Reviewing and increasing minimum order values is one way of encouraging this behaviour.
  • Grouping deliveries by location – Broadening on an example by Ocado, encouraging customers to pick delivery slots when a delivery vehicle is already in the area reduces the risk that vans will be zigzagging across cities and town, routes can be streamlined and made more efficient. Convenience will always be important to some customers, but many should be persuaded to wait a few hours longer if they were offered a cheaper price or were told about the benefits of carbon reduction.

It’s all in the planning

Understanding the impact these changes have on an organisation’s carbon emissions is the first step needed when looking at the best ways of reducing them again.

When developing a long-term sustainability plan, the challenge many organisations face is often to ensure the delivery of a clear and actionable plan that meets stakeholder sustainability and carbon net-zero aspirations; whilst also staying fully compliant with rapidly changing regulatory environment, and the ever-changing technology landscape.

As we have seen these plans can change due to events that are outside of an organisations control so a sustainability plan should be something that is reviewed regularly to make sure it is still fit for purpose.

By taking the time now to develop an effective strategy, retailers can ensure that meeting environmental, business and customer objectives will become much more straight forward in the long-term and can help you to:

  • Protect margins in an increasingly competitive and challenging market
  • Mitigate risk in a time of economic and market uncertainty
  • Understand costs with insight to drive improvement across all facilities
  • Be in control through accurate and timely data across a complex portfolio
  • Minimise administrative burden giving more time focus on the customer
  • Address the infrastructure challenge of the electrification of fleet vehicles and shopper on-site charging points
  • Looking afresh at options to investing in renewable energy sources to help power stores
  • To be fully compliant and up to date with the changing regulatory environment

By partnering with Inenco, you will have the expertise on hand to help define, develop and deliver an environmental sustainability strategy that is aligned with your overall corporate objectives – giving your organisation the resilience to compete in a complex market for years to come.