More and more people in Europe are shopping online. In 2021 alone, European e-commerce grew by 13 percent to 718 billion euros. At the same time, the desire for more sustainability is increasing, in a global survey, 85 percent of participants stated that they had changed their purchasing behaviour in this direction in the last five years. Accordingly, customers are also looking more and more closely at how responsibly a supplier operates when buying online. This is a good reason for companies to firmly anchor sustainability principles in their philosophy especially in the start-up scene. There are numerous examples of how e-commerce can be combined with a sustainability commitment thanks to innovative ideas, this shows that green action is also becoming more and more important on the supplier side.
One of the most important sustainability issues of our time is climate protection. An increasing number of companies, including many start-ups, are getting involved in this area. On the way to climate neutrality, they analyse, reduce and compensate for their greenhouse gas emissions. In doing so, they benefit if their service providers can do the same and provide them with valid data for balancing. This is because the upstream and downstream indirect emissions in Scope 3 usually make up a large part of a company’s carbon footprint. In the logistics sector, transport and packaging of goods as well as returns have a considerable impact. It is important to know and track the exact emissions. Numerous solutions from technology companies have recently been established for this purpose.
These areas are considered in the balancing process:
Scope 1: These are all direct emissions that arise from the company’s activities, for example from the company’s own vehicle fleet.
Scope 2: These are the indirect emissions that arise, for example, from electricity or heat that companies purchase from utilities.
Scope 3: These are diverse indirect emissions that occur along the entire value chain, for example through logistics.
Making e-commerce logistics more environmentally friendly
In order to make online trade and environmental protection more compatible, partners like MS Direct who offer sustainable solutions are needed, especially in the area of logistics. There are numerous opportunities to save greenhouse gases along the entire value chain.
This starts with the transport of goods from the manufacturing plant to the logistics service provider. Here, short delivery routes and environmentally friendly delivery by rail, with biofuel and LNG gas-powered container ships or electric and hydrogen powered trucks have a positive effect on the CO2 balance sheet. Improved planning and consolidation of consignments can also make a major contribution to saving emissions. In this way, capacities can be better utilised and empty runs reduced. Route planning tools and digital platforms help with this task.
In the warehouse, modern energy management with good insulation, economical consumers, software support or in-house electricity generation, for example via photovoltaic systems, offers further reduction potential. In addition, careful waste separation increases sustainability. The more segregated waste is, the better recyclable materials can be identified and recycled.
One area that is currently the subject of much discussion is shipping packaging. The aim here is to keep the use of materials to a minimum and to ship as little “air” as possible. Many optimisations can be realised in this area with systems that create precisely fitting boxes, using sustainable materials, eliminating the use of outer packaging and implementing reusable solutions (→ Packaging in focus: a key lever). When the goods are then on their way to the customers, means of transport are needed that do not require fossil fuels. Many carriers are already using electric vehicles for longer distances or solutions like the Cargobike fleet for deliveries in large cities. Likewise, new concepts for effective delivery such as parcel boxes, drop-off in parcel shops and lockable parcel boxes at households are increasingly being pursued. This avoids trips for second or third deliveries and the associated costs and emissions.
A responsible approach to returns
The accommodating approach of many online retailers to returns sometimes leads to return rates of up to 75 per cent. This is reflected not least in the greenhouse gas emissions. First of all, the e-commerce companies themselves are called upon to reduce the number of returned items from the outset. Take clothing for example, here, size finders or augmented reality tools help consumers to make the right choice from the outset. Behavioural researchers also provide strategies on how to reduce the return rate. One possibility here, for example, is to present complete outfits instead of individual items of clothing. This increases the chance that the customer will keep several or all purchased items.
The handling of returns is again in the hands of the logistics service provider. There, the goods are checked, refurbished if necessary and repackaged. The more effective this is, the more returned items are put back on sale. Online retailers are increasingly integrating platforms for used goods into their shops. After being inspected, refurbished or, if necessary, repaired, many products, from jackets to books to mobile phones, are given a second life. This is also in the spirit of a sustainable circular economy.
Focus on packaging: a key lever
A decisive factor in making e-commerce more environmentally friendly is the shipping packaging. Experts estimate that packaging is responsible for around 30 per cent of the total emissions associated with online commerce. Added to this is the amount of waste generated by cartons, foil bags or filling material, for example. MS Direct works with various systems and providers to bring packaging to a more sustainable level for its customers.
One possible solution is on-demand packaging. Here, a custom-fit cardboard box is produced especially for each shopping basket. The system records the exact geodata of the purchased products and optimally adapts the box to them. The savings potential of this system is enormous: 60 to 80 per cent less filling material is needed – many packages even manage without any fillers at all. At the same time, the transport volume is reduced by 30 to 40 per cent and cardboard consumption reduced by around 17 per cent.
A clever idea for reducing packaging materials comes from a Swiss start-up, Kickbag relies on bags made of recycled plastic. the bags are produced in a climate-neutral way and are completely reusable. To ensure that the packaging also fits the contents, Kickbags are available in three sizes. The bags are closed with Velcro fasteners, which makes adhesive materials obsolete. End consumers simply return the bags to the nearest letterbox. The bags are returned to the sender by post, where they can be used again.
Sendmepack is another environmentally friendly example from the start-up scene showcasing cardboard boxes that are suitable for multiple use. This system ensures that packaging from returns is used again for shipping. Cartons in good condition are freed from labels and, if necessary, cleaned and then used again for shipping. This not only saves valuable materials, but also reduces packaging waste. The transparency of the system is ensured by QR codes on the cardboard boxes, which can be used to track the CO2 savings.
Building a sustainable brand – best practice example: Namuk
MS Direct’s client base also includes many start-ups. One of them is Namuk. Since its founding in 2016, the first Swiss children’s outdoor label has successfully positioned itself in the sustainable niche market with well-thought-out and child-friendly clothing. Jackets, trousers, shirts and the like are so robust that they can be worn for years and accompany many children during outdoor fun and games. The label of the fast-growing company is present in stationary retail in Switzerland, Germany and the USA. With its own online shop, Namuk now also appeals to customers around the world. For logistics in the home market of Switzerland, the team of founder Franz Bittmann has brought in MS Direct, a partner that supports the sustainable approach of the clothing label.
Interview with Franz Bittmann, Founder & CEO of Namuk
What was the founding idea of Namuk?
Our first son was a demanding user of clothing, he either slept, ate or dug a hole somewhere in all weathers. He destroyed his clothes in no time or came home completely soaked. I then took a closer look at his clothes and noticed that the fabrics, zips, other materials and workmanship were of a lower quality. After all, children’s clothes don’t have to last long and are therefore produced in inferior quality. Based on my many years of experience in the textile industry, Namuk came into being – at first only as a hobby. In the meantime, we have grown considerably, have 18 employees and are also successful internationally.
How important is sustainability to Namuk?
Sustainability is firmly anchored in our DNA. We develop durable clothing with materials that are as sustainable as possible. Our products last several times longer than those of many competitors. Therefore, they can be passed down or sold. To this end, we have also introduced our own reuse platform namuk-reuse.ch, through which we sell used namuk products that we have remanufactured. When it comes to materials, we rely on recycled and biodegradable fabrics, among others, such as our polyester fleece, which we offer exclusively. The wool we use in our collections is also certified according to the “Responsible Wool Standard”, which confirms that the sheep are kept according to strict animal welfare criteria. When choosing our suppliers, we also make sure that they meet recognised sustainability criteria we also check this ourselves during on-site visits.
How did the cooperation with MS Direct come about?
Our customer StadtLandKind, a Swiss online shop for the whole family, recommended MS Direct to us because the team there had had good experiences working together. Again, the sustainability aspect was important to us. As a climate-neutral service provider, MS Direct supports us in making our logistics in Switzerland more sustainable. The location in St. Gallen provides us with short transport routes both to our B2B customers in the stationary trade and to the customers of our online shop. Another criterion why we chose MS Direct was their cooperation with the Swiss carrier Quickpac, which delivers with electric vehicles. We now also want to connect to this service as quickly as possible. After about one and a half years, we can say that we very much appreciate the uncomplicated communication and the modern set-up of MS Direct.
What can other brands learn from Namuk in terms of sustainability?
For example, if we look at the European Union’s Green Deal planned for 2025, we see that one of the things on the agenda there is more durable products that can be repaired, recycled and reused. We are already very well positioned here. Because sustainability has been part of our business model since the beginning. Our products are very durable, can be repaired and can be resold via our own Reuse platform, among other things. I also hope that there will be a rethink on the consumer side: Children’s clothes should not be produced in inferior quality at the expense of the environment, but in such a way that they last as long as possible.
Implementing climate targets in a scientifically sound manner
Making themselves more sustainable is becoming an increasingly important issue for companies around the world and across all industries. But how do you develop measures that actually work? The Science Based Targets initiative provides the answers. Called SBTi for short, the initiative helps companies reduce their emissions using science-based evidence. MS Direct is one of more than 3,600 companies worldwide working with SBTi to reduce their emissions in line with climate science. Together, they are aligning their actions to limit global warming to 1.5 degrees Celsius above pre-industrial levels, as agreed in the Paris Agreement.
Sources: “European E-commerce Report 2022”, Amsterdam University of Applied Sciences & Ecommerce Europe www.ecommerce-europe.eu Global Sustainability Study, Simon, Kucher & Partners www.simon-kucher.com/en/blog/global-sustainability-study-what-role-do-consumers-play-sustainable-future Behamics www. behamics.com/blog/three-ways-to-reduce-product-returns.php
About the Author
Luca Graf, CEO MS Direct AG, is strongly committed to making e-commerce more sustainable in his role. He is a proven expert in the fields of logistics and e-commerce. During his time as Head of Digital Innovation at DSV and Panalpina, he gained many years of experience in the digitalisation of logistics processes. Previously, he was Head of Online & Direct Sales at Swiss International Air Lines for many years. He was also a member of the Board of Directors of Cargo Sous Terrain. Contact: firstname.lastname@example.org
Further information on the MS Direct AG sustainability initiative: https://www.makeimpact.ch/e-commerce