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Villa, R.; Serrano, M.; García, T.; González, G. The E-Commerce-Delivery. Encyclopedia. Available online: https://encyclopedia.pub/entry/48535 (accessed on 18 May 2024).
Villa R, Serrano M, García T, González G. The E-Commerce-Delivery. Encyclopedia. Available at: https://encyclopedia.pub/entry/48535. Accessed May 18, 2024.
Villa, Rafael, Marta Serrano, Tomás García, Gema González. "The E-Commerce-Delivery" Encyclopedia, https://encyclopedia.pub/entry/48535 (accessed May 18, 2024).
Villa, R., Serrano, M., García, T., & González, G. (2023, August 28). The E-Commerce-Delivery. In Encyclopedia. https://encyclopedia.pub/entry/48535
Villa, Rafael, et al. "The E-Commerce-Delivery." Encyclopedia. Web. 28 August, 2023.
The E-Commerce-Delivery
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This entry is adapted from the peer-reviewed paper 10.3390/su151612161

Except for digital goods, all other products sold on e-commerce platforms require physical delivery. The delivery of goods to end consumers is an important part of e-commerce, but it is also one of the most polluting and least efficient parts of logistics. The process of delivering goods to consumers can be inefficient due to factors such as urban sprawl and the growth of e-commerce. Additionally, consumer habits and preferences have led to an increase in the distribution of goods over short distances, which requires approaches and measures to minimize the environmental effects. 

sustainable delivery sustainable e-commerce e-commerce delivery consumers home delivery shipping costs packaging returns

1. Introduction

In recent years, especially since the COVID-19 pandemic, e-commerce has become an indispensable part of the global retail market. For months, the internet was the only means by which many businesses could continue to generate revenue, and it was the only way for consumers to access certain goods. Seventy-four per cent of internet users in the EU shopped online in 2021 [1], with very similar percentages in the rest of the world. According to Statista data, e-commerce in the United States amounted to USD 469.2 billion in 2021, up from USD 431.6 billion in 2020, and in Spain, approximately 24% of total purchases were made over the internet [2].
Although changes in consumer shopping habits have changed permanently in the wake of the pandemic [3], from 2022 onwards, this growth in e-commerce has altered as a result of inflation, slower economic growth, and geopolitical conflicts. This has resulted in slower growth in household online spending because of households saving less and buying fewer unneeded items. Despite these temporary adjustments, many experts agree [4] that the future of retail will be omni-channel-based, with retailers and consumers combining multiple channels to market (O2O model: Offline to Online), sell, buy, and deliver goods. The term ‘phygital’—i.e., physical and digital at the same time—refers to the full integration of the physical and digital worlds in retail.
This phygital experience is evident in e-commerce and in the importance of delivery to customers (physical world), where it has become a critical aspect for consumers over and above the search and online-shopping stages (digital world) [5][6]. However, why do companies attach such a high level of importance to delivery issues in e-commerce? During the online-shopping process, consumers tend not to differentiate between the distributor and the carrier, and mistakes made by the carrier are attributed to the retailer. Product reviews on Amazon, for example, often include comments about delivery, both positive and negative. The courier becomes the seller’s representative [7]. The perceived value of good e-commerce delivery drives customer satisfaction, customer satisfaction drives customer loyalty, and customer loyalty drives profits and growth for these companies (service–profit chain [8]). Timely product delivery, quantity, and quality are critical to the development of e-commerce as they are closely related to customer satisfaction [9].
From a sustainability point of view, several authors [10][11][12][13] point to transport planning and management activities as the most important aspects in addressing the environmental effects of e-commerce. The last leg in transport—i.e., the last-mile delivery—is the most inefficient and energy-intensive part of the logistics chain.
Ignat and Chankov [14] highlight the need for more research into the perceived sustainability of current delivery methods from a consumer perspective. There is a difference between the perceived and the actual cost of a product [15], and there is likely to be a difference between perceived and objective sustainability. In other words, what consumers think is sustainable may need to be revised.
Therefore, e-commerce companies need to take consumer perceptions into account when developing their sourcing strategies. This can be achieved by surveying consumers’ sustainability preferences and providing information on the environmental effects of different delivery methods.
Focusing on the place of delivery of goods in e-commerce and the involvement of different actors in the process (customers, sellers, and/or intermediaries), there are three supply-chain models for delivery in the distribution of e-commerce orders [15]:
The push delivery system: someone other than the seller, usually a logistics service provider (LSP), delivers the goods to the address indicated by the customer. From the starting point—which could be the manufacturer, the retailer, or physical shops—it is the responsibility of the sellers to conduct the entire delivery process. This system is standard, for example, in purchasing clothing through a website, where the seller is responsible for delivery to the customer’s home.
The pull delivery system: in contrast to the push system, customers collect the goods from the points of sale. The customers have full responsibility for the process—from the collection to the delivery of the order at the last desired point. For example, a customer places an order for clothes online, and the same customer picks it up in a shop (BOPIS: buy online and pick up in the store).
The hybrid delivery system: goods are shipped to an intermediate location, where customers pick them up. This system requires the involvement of both the customer and the seller to fulfil the delivery process. For example, consider a clothing order that a customer places online and picks up at a smart locker. In this case, the seller is responsible for the transport part, and the customer is responsible for the other part.

2. Delivery Preferences of E-Commerce Customers and Problems Associated with Home Delivery

The home delivery of e-commerce orders (attendance home delivery or AHD) remains the most valued and widely used form of delivery, although its popularity among consumers in recent years has declined in favor of other delivery alternatives [16]. The International Post Corporation [17] surveys more than 33,000 consumers annually in over 40 countries. Regarding the place of delivery, 45% of the respondents received their parcels at home, 16% had their deliveries directed to their letterboxes, and 4% received them at work. Customers value the security and convenience of deliveries that arrive directly on their doorstep [18]. Although the preference for home delivery is undisputed, given the work and schedules of e-commerce customers, deliveries are typically made when customers are not at home to receive them. As a result, customers more often have to opt for an alternative solution to home delivery. Outside the home, 9% of parcels were delivered to a post office, 6% to convenience stores, and 6% to parcel lockers. These are average figures, but there is significant variability among countries [17].
Although home delivery is the majority option, many of the costs associated with this method affect the main stakeholders involved in urban distribution in e-commerce: consumers, carriers/logistics operators, retailers, and public authorities [19]. Home-delivery problems for carriers and consumers are mainly associated with failed services caused by the absence of the recipient from their home at the time of delivery. According to a study conducted in the UK before the pandemic, 50–70% of households were empty on the day of delivery [20]. This problem is the most critical factor in the success of the home-delivery formula. The failure of this formula leads to numerous inconveniences and, ultimately, lower customer satisfaction [21]. From e-commerce customers’ point of view, the following dysfunctionalities can be considered [22]: (i) the recipient of a failed delivery has to travel, on average, 5 km (round trip) to pick up the parcel, which takes 30 min; (ii) at the same time, he/she has to comply with the opening hours of the collection point, which often coincide with his/her usual working hours; (iii) there may be an additional cost, depending on the transport used, public or private, and parking; and (iv) after the collection, the recipient needs to transport the parcel, which may be heavy or difficult to handle, to his/her home. These factors are the opposite of what consumers expect when shopping and using home-delivery services. Most customers prefer home deliveries on weekends and after business hours to ensure their presence at the delivery location, thus avoiding the exposure of the package to the elements and possible theft [23].
From the point of view of logistics service providers, the costs of home-delivery transport in e-commerce are closely related to the number of vehicles needed during the same period. The greater the extent to which the customer can control or select the home-delivery-time window, the higher the costs. The reason for this is simple: the lower the load-factor percentage on the vehicles, the greater the distances travelled to operate within the promised delivery-time windows. This translates into longer working hours for delivery services and an increasing number of vehicles required, leading to a significant increase in the total home-delivery costs [24]. For in-home delivery, there are also inefficiencies from the transport companies’ point of view in the event of failed deliveries [25]: (i) vehicle downtime; (ii) additional fuel consumption by vehicles; (iii) the costs of further attempts in the next few days; and (iv) additional storage costs.
For retailers (e-retailers), home delivery is dichotomous. On the one hand, their primary objective is to satisfy customer needs, with home delivery being the customer’s preference. Nevertheless, home delivery has become increasingly costly. Last-mile-delivery costs account for 53% of total shipping costs and up to 41% of total supply-chain costs [26]. In other words, approximately half of shipping and supply-chain costs are spent on the last mile. On the other hand, consumers are now more interested in how the supply chain can be made more sustainable and increasingly value green delivery in their e-commerce orders [27]. As a result, companies are opting for environmentally friendly deliveries that can give them a competitive advantage and reinforce their brand image on the market [28].
For their part, public administrations are focused on developing attractive and sustainable cities for their citizens. From this perspective, the transport derived from e-commerce delivery is one of the main factors responsible for the environmental degradation and pollution generated in cities. The administration’s major aspiration is to provide the best infrastructure to enable e-commerce parcel deliveries with the fewest possible social and environmental externalities. As physical deliveries derived from e-commerce become increasingly high and significantly affect the city, their concern for solutions grows. The main inefficiencies caused by e-commerce parcel delivery in the city, from the point of view of public administration, are as follows: (i) increased emissions of polluting gases; (ii) increased transport noise; (iii) increased traffic congestion; (iv) the occupation of public spaces by delivery companies; and (v) increased accidents on urban roads [29][30][31][32].

3. Sustainable Delivery in E-Commerce and Success Factors

In recent years, numerous initiatives have been developed to minimize the negative effects of urban distribution and lay the foundations for the future achievement of a more robust and circular economy, in which resources are used more sustainably. Several studies in different countries [33][34][35][36] show that greenhouse gas (GHG) emissions associated with the last mile multiply the volume of all other transport operations. This emissions problem is complicated by the fact that demographic and socio-economic changes increase the number of orders and deliveries and, thus, the volume of freight vehicles in urban areas [37]. The EU is working on its Green Deal to become the first carbon-neutral continent by 2050 and decouple its economic growth from its resource use [38]. Transport is one of the basic pillars to be considered, and green delivery is one of the priorities. To achieve ideal sustainable parcel delivery in online e-commerce, the main critical success factors that customers value and that must be met for them to be satisfied with the delivery must be considered. Below are listed the main critical factors in e-commerce delivery and the main sustainable initiatives or solutions led by the increasingly sustainable behavior of online consumers.
Shipping costs: on all surveys regarding the online shopping experience, this appears to be the most important factor, next to low product prices, ahead of others such as same-day delivery and guaranteed delivery time or location [39][40]. Sustainable solutions focus on customers’ willingness to pay to ensure climate-friendly deliveries and the characteristics that these options need to be attractive [41][42][43][44][45]. Price increases in e-commerce home deliveries can have a double effect. On the one hand, it is possible to allocate these extra revenues to compensate for the additional costs of clean deliveries (electric vehicles, cargo bikes, urban microhubs, etc.) or to reduce e-commerce orders when the value of the basket is low and the delivery cost is a relatively high percentage of the order. On the other hand, the willingness to pay more for sustainable delivery is less clear, as even consumers who are positively inclined towards sustainable consumption do not change their behavior when they encounter economic barriers [46].
Packaging: online shopping—and, therefore, the production and use of e-commerce packaging—has grown steadily in recent years, as has its environmental impact [47]. In 2018, more than 20 billion packages were shipped worldwide [48], and packaging has directly affected the environment in the form of increased CO2 emissions and energy use [49][50]. The weight and volume of packaging are also significant because they influence the energy used for transporting these packages to the final recipient [47]. One of the most important aspects is over-packaging, which continues to lead to the excessive use of materials and energy, influencing the impact of production and transport processes [47][51]. This highlights consumers’ willingness to implement the three Rs of recycling (reduce, reuse, and recycle waste) and to use packaging solutions based on environmentally friendly materials and favoring the efficient use of energy [52][53][54][55]. It is also key to avoid packaging waste in every online delivery.
Returns: when shopping online is easy, customers expect it to be equally easy to return their purchases. Many retailers offer free delivery and various ways to return items, including the return of items sold online to shops. Free returns services have led to higher-than-expected returns, resulting in high financial costs for companies, which can lose up to one-third of their revenue from these online returns [56]. However, equally, all externalities (i.e., the negative side effects of transport on society and the environment) and waste caused by direct home deliveries are considerably increased by online order returns [50][57][58]. Therefore, consumers are urging retailers to search for alternatives (e.g., augmented reality to test products, limiting the number of returns or extending the number of days) that allow these returns to be economically sustainable for businesses, consumers, and the planet [59].
Delivery options: the vast majority of e-commerce consumers consider it necessary to have several delivery options for their products. They are open to picking up their deliveries from pick-up points, shops, or delivery lockers and to waiting longer for their purchases [41]. Delivery alternatives in e-commerce translate into convenience for customers as they simplify the online purchasing process. From the perspective of sustainability, the most sustainable e-commerce deliveries are those that optimize the loading of delivery vans, deliver many packages in one stop, take advantage of consumer trips to pick up packages (stores, another convenience centers, or smart lockers), and deliver through sustainable means (cargo bikes, electric vehicles, walkers), or through the collaborative economy.
Fast delivery: along with the increasing volume of e-commerce, consumers are becoming more demanding in terms of critical aspects such as the speed of product delivery, placing additional pressure on the environmental effects of e-commerce consumption [60][61]. The offer of fast delivery by e-retailers may contribute to increase in GHG emissions, given the choice to prioritize speed over other factors [62]. However, several studies highlight a lack of knowledge of how delivery speed and environmental impact are related. Eighty per cent of e-consumers are unaware that fast delivery has a more negative impact on the environment than slow delivery, and 32% of this group even believe that slow delivery is more damaging than fast delivery [63][64]. Solutions can therefore be aimed at ensuring longer delivery or return times while explaining the social and environmental benefits of these deliveries, or at ensuring that customers pay (and compensate) for urgent orders.
While initiatives by retailers and logistics operators can make significant strides towards sustainable e-commerce delivery, consumer engagement is key [64]. Online consumers are inherently concerned about the environment, and their demand for sustainable products is a driving force towards a circular economy. Some experts point out that consumers are willing to pay more for environmentally friendly products, and this percentage is expected to grow in the coming years [65][66][67]. On the other hand, other studies point out that although delivery is increasingly customer-centric and convenience-oriented, this incurs social and environmental costs, for which consumers are still unwilling to pay [41][68]. The consumer profile is also key, with preferences for sustainable deliveries differing widely across generations [69][70].

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Subjects: Operations Research & Management Science
Contributors MDPI registered users' name will be linked to their SciProfiles pages. To register with us, please refer to https://encyclopedia.pub/register :
Rafael Villa
,
Marta Serrano
,
Tomás García
,
Gema González
View Times: 289
Revisions: 2 times (View History)
Update Date: 29 Aug 2023
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