An assessment of the sustainability of E-fulfilment models for the delivery of fast moving consumer goods to the home
van Loon, Patricia Petronella Johanna Cornelia
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Online retail sales are growing rapidly and have captured a significant proportion of the retail market in many countries. Although companies are under mounting pressure to reduce their environmental impact, the environmental effect of the different online distribution strategies remains unclear. Most previous studies of this subject have only included partial effects and consequences. To enable a more holistic understanding, this study proposes a more inclusive framework of environmental assessment based on life cycle analysis. This was applied to fast moving consumer goods (FMCG). Previous studies have shown that the last mile delivery contributes significantly to the environmental impact of online retailing, mainly because of the nature of the home delivery operations, including narrow time windows and short order lead times. If consumers were to buy products online on a subscription basis and give the supplier more control over the replenishment process there might be less need for fast deliveries, creating opportunities to improve the efficiency of home deliveries and reduce their environmental impact. The study classified different forms of subscription arrangement, assessed their relative attractiveness to consumers and examined their likely impact on the supply chain. Consumer views on subscriptions were surveyed by means of focus group discussions and interviews. To assess the likely supply chain impacts of subscriptions, the literature on vendor-managed inventory was consulted. A Life-Cycle Assessment (LCA) model was built to quantify and compare the environmental impact of various e-fulfilment models for FMCG products in the United Kingdom. This study reveals that the method of execution have a large influence on the environmental impact. In store-based retailing, the energy consumption within the supermarket is a significant contributor to the total greenhouse gas emissions. On the other hand, some forms of home delivery, involving for example the use of parcel networks with no pre-agreed time-slots and relatively high rates of delivery failure and customer collection, are also carbon-intensive. This contribution of consumer trips to the total footprint is much smaller in case of van-based deliveries where pre-agreed time-windows are used. Regardless of the business model, the total carbon footprint per item depends heavily on the number of items per delivery. Consequently, companies or consumers looking to decrease the environmental impact of online shopping should maximise the number of items per delivery. The study concludes with an assessment of the strengths, weaknesses and possible environmental improvements of each of the efulfilment methods, taking account of the possible role of subscriptions.