How to deliver a sustainable future in the on-demand sector
Sacha Michaud, Co-founder of Glovo, looks at the consumers expectancy for on-demand services, as well as eco-friendly business practices, as well as how, and if, these can work together.
How can last-mile delivery become more sustainable and eco-friendly? It’s a question I think those of us within the industry have been asking ourselves for some time now.
Over the past few years, there have been two simultaneous shifts in consumer behaviour. Ordering goods online isn’t new — thanks to Amazon and other big players, we’re all veterans now — but our expectancy regarding delivery times has changed completely. Today, depending on the contents of our order, we’ve become accustomed to taking possession of our goods within a few minutes or a few hours even — one day seems to be the absolute maximum time we’re willing to wait for a delivery.
In response to this, companies all over the world are investing heavily in developing their logistics and last-mile delivery operations, as the demand to serve customers fast, efficiently and effectively increases in importance.
Buying behaviours have shifted
The second shift in consumer behaviour to which we’ve born witness is the rise in climate-conscious activism. Ethical or environmentally-friendly consumerism is a challenge with which almost all big brands have to grapple, whatever their sector.
Whether it be cutting back on the production of red meats, reducing carbon emissions or taking a stand against the pollution caused by fast fashion, ethical consumerism has exploded into the public consciousness in a big way and has very real implications for a wide range of brands and companies worldwide.
It’s now more important than ever for brands to highlight their environmental awareness to consumers. The risk, if they don’t, goes beyond the simple loss of customers and sales. Instead, there’s the potential for wave after wave of negative media exposure, social media commentary, loss of endorsements and boycotts. And the bigger the brand, the more intense the scrutiny of the spotlight.
Rise of environmental awareness
Since the demand for both on-demand deliveries and environmental awareness from brands is here to stay, how do businesses tackle these corresponding revolutions in consumer behaviour?
Is it simply a case of throwing open the doors of transparency regarding environmental impact, while continuing to seek eco-friendly delivery solutions? Are consumers willing to accept a trade-off: longer wait times for low-impact or sustainable delivery?
I suspect such compromises between companies and consumers will be few, if at all. The onus will be on companies to figure out how to satisfy consumer delivery needs while reducing their carbon footprint and maintaining — or in some cases, even improving — their last-mile delivery operations.
A circular game
Let’s be clear: unless we change the rules of the game, consumerism will continue to have a negative effect on the environment. We need to focus our efforts on models that have sustainability at their very core. One such model, the circular economy, which focuses on eliminating waste and the continued reuse of resources, can reduce the rise of negative environmental impacts by making the most of natural resources.
One of the things that we are looking at regarding the circular economy model is management of food and packaging waste. Another is the optimisation of routes in order to make delivery as efficient and effective as possible.
If we consider our carbon footprint across our entire value chain, we can say that they are roughly distributed into three tiers: 40 per cent for food waste, 35 per cent for packaging, and 25 per cent for transportation — with the remaining five per cent coming from business travel.
Most of these are indirect, as they are generated by our users and partners (restaurants throwing away their food leftovers at the end of the day, or using non-recyclable packaging for their orders, etc).
That’s where platforms like ours have a key role to play. By providing support to our ecosystem of users, we can facilitate their conversion towards more sustainable practices. We’ve started doing so by selling sustainable packaging made from recycled or recyclable materials to our partners, and by helping them to manage their food waste through donations to NGOs.
In these two fields alone we expect to be able to have a big impact. By sharing the responsibility with our users to shape a delivery system that will benefit the environment, it becomes easier for us and our customer to take on eco-friendly behaviours.
Setting sustainability targets
I think the targets you set yourself, as a company, are a great indicator to the consumer as to how serious you are about sustainability. Setting bold environmental goals, taking actions to achieve them and being transparent regarding the inevitable challenges builds trust.
We want to neutralise 100 per cent of our carbon emissions across our entire value chain, from procurement to end-of-life products sold through the app, before the end of 2021.
By investing in projects that actively reduce CO2 emissions, companies can help shrink their net impact on the environment — even if other parts of their operations are still producing greenhouse gases (GHG). These investments will come at a cost to the business in the short-term — as it will be money that they won’t invest in other areas — but it’s necessary if your long-term goal to meet the demands of the consumer for fast delivery times with an eco-friendly outlook.
Finding a way forward
It doesn’t really matter where the offset comes from, because as long as it’s greater than the GHG emissions being produced, reduction anywhere will have a positive impact. This is the strategy that the on-demand delivery industry needs to embrace. We need to first be focused on offsetting and then on analysing our supply chain and seeing what we can do to further reduce, whether it be through the likes of reusable packaging or energy conservation.
Of course it’s going to be very hard for many companies to go “fully green” in the on-demand delivery space. The truth is that both the supply chain and operational sides of a business have a multitude of factors that need to be taken into consideration. Sweeping changes cannot be made overnight and, in some cases, companies are playing a waiting game with the technology used. But as technology companies, we have a great opportunity to really drive sustainability efforts and make eco-friendly changes across our value system.
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