E-commerce has been a boon for the fashion retail industry. But it also comes with a cost: the overnight deliveries and corresponding returns add dramatically to the carbon footprint of our industry, whether we like to admit it or not, says Robert Antoshak, managing director at Olah Inc.
Happy 2020! Years may change, but some things stay the same. For sure, many of the problems we faced as an industry last year still plague us at the outset of this new year and the beginning of a new decade.
Indeed, there is a long list of problems to contend with, including a hyper-competitive retail market, ongoing trade tensions between the US and China, the remaining drama surrounding Brexit, and the continued competition for customers by physical versus online stores.
And discounting by retailers – particularly by physical stores – was particularly acute last year, as brick-and-mortar establishments fought hard to retain customers enticed by online alternatives.
At the same time, however, we have a lot to be thankful for. Such as a decent holiday sales season in the US led by online retailers like Amazon (which enjoyed record sales) and physical stores, albeit at lower rates of growth compared to their online brethren.
This shift in how clothing was sold this past holiday season says a lot for the future of our business – and in ways not apparent at first blush. For example, let’s take sustainability. What is sustainable or, by default, environmentally friendly?
The effects of online sales
E-commerce has been a boon for our industry; in many ways, online sales have provided life into an otherwise stagnant retail market. Although most clothes are still purchased the old-fashioned way in physical stores, online sales are gaining share of the consumer market every year.
Of course there are good reasons for this. Online shopping is so easy: click, and you’re done. No crowds. Lots of products to choose from, and from which to compare. Also, there is super-fast delivery. Need something delivered tomorrow or even today? No problem. And you don’t have to go to some shopping mall. All of this before one even considers price.
But such efficiency comes with costs. Folks complain about a lack of a shopping experience online, but I guess that’s a trade-off for convenience. Others complain that returns are a pain, but for many returns are just part of the online experience. Don’t know your size? No problem: just order three different sizes; one will fit, and you can return the other two at no cost. Sometimes you can even return the offending garments at a physical store.
Returns aren’t a small problem. According to Adobe Analytics, nearly half of all online apparel purchases during the 2018 holiday season were returned because of poor fit.
But what’s the impact of all of this? Of course, we have the supply chain costs of often having to ship products tens of thousands of miles across the world to fill store coffers in the first place. Yet thinking beyond that, what’s the environmental cost of consumer behaviour?
It’s too bad we haven’t figured out teleportation yet, as all of the overnight deliveries and corresponding returns add dramatically to the carbon footprint of our industry, whether we like to admit it or not.
It’s a double whammy of sorts: carbon footprint to make good initially, and then a second carbon footprint for all of those returns. Moreover, where do all of those returns end up? Sometimes they end up back on store shelves, but at least as often returns end up in landfills. It’s a measure of how our industry overproduces and harms the planet thanks to all of these returns. It’s a dilemma, no question about it.
Measuring carbon footprint
Carbon footprint really nags me. We overproduce as an industry and the transportation of our goods across literally tens of thousands of miles weighs heavily on the environmental health of our planet. And the ease of purchasing afforded by online clicks only adds to the problem. It’s a hidden cost that I’m sure many in our industry would prefer to ignore or hope would go away. No such luck, unfortunately.
The US Energy Information Administration, a division of Department of Energy (DOE), produces a report called ‘The Monthly Energy Review‘ which tracks “recent and historical energy statistics. Included are statistics on total energy production, consumption, stocks, trade, and energy prices; overviews of petroleum, natural gas, coal, electricity, nuclear energy, and renewable energy; carbon dioxide emissions; and data unit conversions.” The most recent report was published in December 2019.
It’s chockfull of stats about US energy production and consumption, and the sources of that energy (like natural gas, oil, nuclear etc), as well as the major industrial sectors using that energy. It’s a hefty document, weighing in at 270 pages.
I waded through the report, and what I found most interesting is that transportation emits the most CO2 of any sector. Despite some improvement in CO2 emissions from power plants, transportation has soared in recent years as the largest emitter. That’s right: planes, trains and automobiles (to borrow from the title of a famous Hollywood movie).
Sea and airfreight make up a significant portion of CO2 emissions. But emissions from small- and medium-sized trucks have the most significant share of overall transportation emissions. Although I’ve read about some services using electric vehicles to fulfil orders, most deliveries are still made by petrol-powered trucks.
Coming back full circle
Which brings me back to all of those apparel returns. The industry has a responsibility to manage its resources efficiently – after all, such over-product costs companies plenty – but consumers equally share responsibility. For too many years, consumers have been conditioned to expect low prices, huge inventories, wide variety – and now the ease of a click to purchase online. It’s hard to envision our industry changing its fundamental approach to production unless consumer attitudes change.
For all the talk of the rise of young, millennial buyers, the jury is still out of their long-term purchasing habits. Many millennial-age consumers say they can’t afford the volumes of clothes their parents once consumed. Don’t kid yourself. Millennials are avid consumers – often online – and in doing so add to the environmental impact on the planet, something that many insist is so important to protect.
This leaves me confused. But in the end, I think the human desire for goods and services still reigns supreme over higher aspirations of protecting the environment.