Which is more sustainable: eCommerce or brick-and-mortar retail?

ecommerce online shopping

The headlines of a recent MIT report concludes that shopping online is more sustainable than shopping in brick and mortar retail stores—when it comes to carbon emissions per purchase. When you dig into the report, you’ll find the situation is far more nuanced. It’s important to discuss the purpose of online shopping within our larger commerce ecosystem so we can develop a framework that is not limited to counting carbon emissions but rather embraces a holistic view of sustainability.

At The Sustainability Lab, we believe that online shopping has a place in the commerce ecosystem. Shopping online is a great way to discover new products and lifestyle ideas. You may live in an area where the things you want to buy are not available, or the prices are too high. It’s also a great way to maintain social distancing during a pandemic. But eCommerce shares a place with traditional, brick-and-mortar retail, which by no means is going away.

The report compares eCommerce and brick and mortar shopping by breaking down the component parts of the shopping journey, from its place of production (perhaps a foreign country) all the way to your doorstep. Since virtually all of our goods travel through a port, onto a truck, and then to some distribution center, it all comes down to the “last mile” of distribution. For a store, that means the product goes to a shopping center or downtown, which you then go and buy. For online shopping, the product goes to a local distribution hub and then to your door.

The Last Mile 

With a physical store, there's a middleman step—you have to travel to the store to pick up your product—that eCommerce doesn’t require. And this step turns out to be fatal—no amount of trucks or fancy robotic arms in the warehouse can make up this gulf of carbon emissions from your gas-guzzling car.  It’s been observed that one delivery van can distribute up to 100 packages, meaning it can save 100 trips to the shopping mall.

Do you see where I’m going with this? Car this, car that — this report is more a condemnation of gas-powered cars than anything that has to do with retail distribution.

So let’s say you walk or take public transportation to do your shopping. Or you own an electric or green hydrogen vehicle. What then? Of all of the other components of carbon emissions in the shopping experience, everything but that last-mile transportation (car versus delivery van) swings in favor of brick and mortar retail: property-level emissions, packaging emissions, and return rate.


What’s missing from this analysis: Embodied Carbon

The United States is currently undergoing an unprecedented transformation of the built environment. 300 million square feet of industrial distribution property was under construction in the third quarter of 2020. Amazon has reportedly taken 100 million square feet of new warehouse space this year. Can you picture one hundred million square feet? 100 skyscrapers in a major city like New York. Now imagine those buildings flat on the ground, taking over forest or prairie. 

At the same time, retail space has declined. Morgan Stanley analysts estimate that 30-35% of malls in the US will shutter in the next few years. These malls, made of concrete and steel (lots of carbon embedded) will be demolished and converted to other uses.

The construction and demolition needed for this transformation is very carbon intensive and gobbles up land. Not to mention once you’ve built the warehouses, you need to maintain them: buildings consume 40% of energy produced and emit 30% of greenhouse gases. And you might say that 300M SF of industrial space is simply replacing dead malls. In fact, malls are hard to repurpose as industrial for reasons as varied as lease covenants and lack of floor flatness and municipal pushback.

MIT's report does not address this transformation, but it's something you should definitely factor in to any calculation about online versus in-store shopping.

Operating Model for Commerce Ecosystem

Bottom line: if you can get to a shop without burning oil, you’re probably using less carbon than online shopping, or it's dead even. So here are different modes of commerce you have access to, and when it might make sense to do each: 

  • eCommerce: leverage for product discovery, if you live in either transit poor or retail-starved locations, and if you need sustainable products that you can't find nearby
  • Physical retail: go if you can get there easily, and when you need to see what you're buying in person
  • Omnichannel shopping can make your life easier, either through online ordering and delivery or buy-online, pick-up in-store.
  • Second-hand stores for items you don't need new or that are out of production
  • Neighborhood exchanges (or Facebook Marketplace) for items that may be hard to come by or that you need in small quantities

Always support small and/or local businesses!

Concluding Thoughts

So what can we take away from this report? Transportation is a huge element of commerce, as is the real estate needed to support our shopping, but this report is really a portrait of suburbia and all of its carbon car troubles. And in the fine print, the writers readily admit that in the “I Own an Electric” and “Everybody Electrifies” scenarios, brick and mortar retail equals or beats eCommerce on  emissions. 

So don’t drive a car to the store if you don't have to. Don’t go to stores that require you to take a car. Go to places you can walk to, or by bus or train. Or drive an electric or hydrogen. Carpool.

It's really all about the decisions we make when we shop. From the report: “The question is not whether ecommerce or brick-and-mortar retail is better or worse for GHG emissions. It is more about what decisions consumers, retailers, ecommerce and logistics stakeholders can make to minimize GHG emissions.”

We're doing our part as an online shop by taking their recommendations to heart, such as packaging with reused materials, minimizing filler space in our boxes, eliminating free returns, offering sustainable products—check!

But it will be up to all of us to work together to come up with a commerce ecosystem that is functional, dynamic, and sustainable—more to come.

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