The downside of on demand delivery           

insights  August 8, 2018

Simultaneously with the growing ecommerce, the wishes and expectations of the modern consumer also grow. Consumers are getting increasingly demanding in terms of flexibility and delivery speed. Retailers must respond to these wishes in order to compete in this innovative sector. But this on demand economy has a downside.

What is on demand delivery?
On demand delivery means offering more flexible and faster delivery options. It is the immediate or scheduled delivery of your product to your customer; initiated immediately after they make their order[1]. The consumer used to wait patiently and without complaining for their parcel for days. Nowadays delivery must take place as quickly as possible. Next day delivery has become the norm and same-day delivery is quickly increasing in popularity. With on demand delivery the consumer can choose which day and time the parcel will be delivered.

This shift towards on demand delivery does have its downsides

The downside
This shift towards on demand delivery does have its downsides though. Online shoppers who prefer to opt for same-day delivery must ask themselves whether this is necessary. A package delivered the same day is always more environmentally unfriendly than when the order is delivered using standard parcel delivery services (several days after the order). Research from the University of Delaware shows that fast delivery options put additional pressure on the environment[2]. With standard delivery, multiple orders are bundled and delivered in one delivery trip. With express delivery and same-day delivery, fewer parcels are bundled, thus more delivery trips are necessary. Returns cannot be organized into bulk pick-ups, because they are generally one-off pick-ups. This means an increase in kilometres travelled for small-scale deliveries. The problem also lies in the fact that instead of including one-off purchases in other shopping trips, like grocery shopping, people are making more one-off online purchases while the number of shopping trips remains unchanged.

Knowledge about the impact of deliveries on the environment is sometimes lacking. Our research shows that 58 per cent of online shoppers are not aware of the fact that express delivery has a more negative impact on the environment than standard delivery. It also appears that 75 per cent of consumers would wait longer for parcels if they knew that a shorter delivery period resulted in more air pollution and congestion.

Awareness and the provision of sustainable options are important for a responsible choice of online shoppers. Providing information upfront about the environmental impact of delivery options can lead to consumers becoming more aware of their online shopping behaviour.

[1] Shopify (2018), Understanding on-demand delivery.
[2] PowerRetail (2016), The sustainability of e-commerce delivery.
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