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The consequences of e-commerce boom

Olive looks to make online shopping and last-mile more sustainable 

 

Every other Wednesday, h/commerce provides in-depth analysis of the most impactful trends reshaping retail.

The pandemic has set off online shopping. With the stay-at-home measures, e-commerce has not only become a way to order essential items, but also a mean of escapism and self-pleasure during the difficult context. No wonder, that an unprecedented number of shoppers have turned to the digital to acquire goods, and the trend is highly visible in every region of the globe:

Credits: eMarketer

While there are not many sectors that can prevail in double-digit growth during times of crisis, this massive increase in online shopping has also its dark side. As a logical consequence of a growing number of online orders, there comes the avalanche of parcels, cardboard boxes and delivery trucks across the cities. The packages flood into our homes, piling up in their homes and backyards, and exposing more than ever, the environmental problem of e-commerce, packaging and the last-mile.

Searching for more sustainable solutions

In times, where sustainability is a major preoccupation for consumers, retailers think about more environmental-friendly options for their fulfillment. Amazon begun delivering packages with prototype electric trucks, Kroger and Walmart partnered with Nuro and Google Waymo to develop electric autonomous vehicles. But those solutions for greener last-mile are very costly, time-consuming, and the tangible results will be shown in years to come.

On the other hand, consumers reliance on online shopping has seen a big growth during the pandemic, as well as their demand concerning fast shipping. At the same time, paradoxically, they weigh the environmental impacts of fast and easy deliveries.

According to the last issue of Havas Shopper Observer:

73% of French, 79% of American and 89% of Chinese are ready to change brand for an equivalent product that is available more quickly.

Shoppers are impatient, and at the same time, they are somewhere in between their consumerist desires and their consciousness of shipping environmental cost:

66% of French, 71% of American and 81% of Chinese have a bad conscience once the parcel is delivered due to its environmental impact.

While improving the last mile issue – as the most polluting phase of the logistics – with electric cars and robots is a long-term and very costly solution, retailers and brands search for other, quicker and more tangible solutions to align with consumers’ desire to keep buying things, yet making it more sustainable…

What are the solutions?

One of the pressing problems of last-mile fulfilling is the problem of multiple boxes for one online order. The market is currently seeing a number of startups that are determined to tackle this problem. One of them is Olive and it gained some press momentum a few days ago upon its launch.

Olive is a new startup created by the cofounder of jet.com and ex-Walmart exec – Nate Faust. What is his ambition with Olive? To eliminate cardboard waste from online shopping and optimize deliveries to avoid multiple packagings for one order.

How does it work?

Shoppers can download the Olive app or Olive extension to their internet browser. Then they can visit and browse e-commerce websites like they normally would. Once they decide to buy an item and as they go to the checkout, instead of entering their home address, Olive app or extension will autofill the address of one of its distribution centres. From there, Olive workers will unpack the individual orders, promptly recycle packaging materials and place items in a reusable bag that are delivered to shoppers – once a week.

Nate Faust stated that the idea for Olive came to him while he was taking out the trash one night: “I was taking out the trash and staring at the boxes on my curb and my neighbour’s curb and I thought, “Holy cow, how did we get here? We’ve reached a breaking point. (…) After 30 minutes of breaking down boxes and multiple trips down the driveway, it dawned on me that this is crazy”.

The concept behind Olive is not only to reduce the amount of waste and cardboards being shipped to customers’ homes but also streamline deliveries so that orders from multiple retailers are dropped off in a batch, instead of multiple shipments. In that way, Olive ensures more packaging materials promptly recycled while eliminating multiple delivery trips. What is more, to return an item, the clients can place it back in the Olive tote bag and make it mail back to the company. The service is free for consumers, but retailers pay an average of a 10 percent commission on every sale as Olive helps them reach sustainability goals. The service is being launched on the two coasts, covering a footprint of 100 million people, or a one-third of the U.S. population, and more than one hundred brands including Adidas, Anthropologie, Finish Line or Ralph Lauren have signed in.

Why is it interesting?

According to the World Economic Forum, much of the pollution associated with online shopping occurs during the final stretch from warehouse to the consumers’ doorstep. Olive’s efforts to make this last mile greener is a larger shift within retail industry to tackle the problem of single-use packaging and to decrease the environmental footprint connected to the final mile of the logistic chain. Olive is following the steps of Loop – a programme introduced two years ago in Davos, that is bringing back reusable packaging to the world’s biggest brands, by a system of high-quality packaging that can be returned and refilled again and again. Another startup – Boox – sells its reusable plastic mailing boxes to more than 30 speciality retailers, including Ren Skincare, Boyish Jeans and Curio Spice Co. By joining programmes like Olive or Loop, retailers and brands can stand out from the crowd and address the consumers who feel stuck between their desire of ordering online and their personal values.

While for many avid e-commerce shoppers, it might seem difficult to simply stop ordering things, Olive’s proposition for them is to make a concession on the instant gratification of speedy delivery and get their orders only once a week. But this time, free from piling card boxes in the garage and most of all, guilt-conscious-free.

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