Tuesday, May 27, 2008

Is eCommerce GreenER?

Recently, I toured an apparel retail outlet in Amsterdam. I work with the same retail company in the US by providing various ecommerce technology services. And I wondered, is eCommerce greener than operating brick and mortar retail stores?

In terms of electric energy, a retailer with even a few retail stores probably consumes more energy when you account for simple must-haves like bright lights, cash registers, building signage and air conditioning. In fact, if you imagine a large, multi-channel retailer, it's not uncommon to have one website and hundreds of stores.

The electric energy required to operate a multimillion dollar (in sales) website is assuredly less. Sure there are PC's, Mac's, servers, power supplies, air conditioning and even air conditioning for the computers. You also have gasoline used by employees going to work and running the website. But that's generally limited to a single physical site or hosting company, along with the retailer's web development office.

In terms of shipping, I think it would vary quite a bit by retailer. Consider that most online retailers use expensive and non-renewable energy (i.e., airplane fuel, diesel gasoline) to ship the overwhelming majority of their products sold to their customers.

Stores also require the same costly shipments from distribution centers to their physical stores which in some cases can be spread across the country or the globe. But if you think about it, a UPS truck is already passing by your house once per day. Rather than driving to the store, why not just add another stop to a route that already exists?

I know! The physical space and the materials that make up the stores could be eliminated, too. The distribution centers that currently supply stores could service online customers. So all of the paper, concrete, steel, paint, plywood and other materials used to create retail space – even those crazy mannequins – they could all be spared!

It's quite likely the rising costs of fuel, the value of the dollar and the general economic slowdown in the U.S. is driving the closures of the dozens of huge retailers closing their stores down this year (Home Depot, CompUSA, Starbucks).

But imagine… what if we started to get used to fewer stores? What if the convenience of driving to the mall and buying a pair of shoes was supplanted with the convenience of a mouse click? Would we miss all those stores? Would our environment? Our planet?

Jason Meugniot
Guidance Green

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