Sustainable business models are increasingly key to successful long-term performance and revenue stability. Yet efforts by retailers and e-commerce brands to implement environmentally friendly home-delivery initiatives are frequently butting up against consumers’ financial constraints. 

According to Descartes’ 2024 consumer sentiment study of e-commerce home delivery, nearly 90% of consumers felt their willingness to pay more for sustainable delivery was impacted by the current economic situation, dampening their motivation to prioritize sustainable options. In fact, 34% of consumers indicated financial pressures had significantly or drastically impacted this motivation. While 37% believe environmental impact and convenience are equally important considerations when making home-delivery decisions, consumers largely perceive sustainable options as too expensive.

The Environment Matters

Despite shoppers’ reticence to adopt sustainable delivery options due to the perceived high price tag, taking action to reduce their carbon footprint is important to them. Consumers, especially the younger generation, are increasingly factoring the environment into their e-commerce shopping choices. Case in point: 56% of 18-34-year-olds reduced their online shopping this past year due to environmental concerns, and a significant number (38%) indicated they “regularly or always “make purchase decisions based on the environmental impact of the product or company. 

Critically for retailers, consumers aren’t afraid to call out brands that don’t live up to their expectations of sustainable business practices. The survey revealed that a large portion of respondents (56%) are taking some form of action to express their displeasure with retailer behavior, from stopping shopping at the company to telling friends and family to avoid the company, posting their grievances on social media, and sharing negative reviews. Younger consumers, especially, respond in ways that can cause retailers monetary and reputational damage, with a significant 77% of 18-34-year-olds taking action in the face of unmet expectations.

On a positive note, 57% of respondents are “quite or very” interested in “green” home-delivery services, with only 4% indicating it was not important for delivery agents to offer sustainable options. Indeed, consumers want to do their bit for the environment through greener deliveries — but they’re not keen at the moment to open their wallets. And, given that they still perceive eco-friendly deliveries as a more expensive option, the pace of change has remained slow. 

Changing Hearts and Minds

The persistent “either/or” perception surrounding affordability and sustainability is a hurdle that retailers must clear, if they hope to shift delivery choices toward greener options. But in the shadow of economic uncertainty and financial pressures impacting consumer behavior, how do retailers help their customers recognize the value of sustainable delivery — not only for the environment, but for preserving their bank balance? Understanding consumer motivation as a lever to shift behavior is a good place to start.

The opportunities to transform customer behavior are clear: Descartes’ 2024 Home Delivery Sustainability Report found that nearly everyone surveyed (99%) was either doing or open to doing more to reduce their environmental footprint. Furthermore, retailers can embrace the fact that customers’ delivery expectations have changed in recent years. 

The survey results revealed that speed of delivery is no longer the biggest incentive for online purchasers, with customers opting for low-cost delivery over speed. In addition, growing numbers of customers also prioritize certainty, opting for a precise delivery window rather than next-day options—expectations that “green” delivery windows have the capacity to meet. 

A core component of effecting change will require an understanding of diverse attitudes across delivery personas. While more than a third of consumers insist they “regularly or always” make purchase decisions based on the environmental impact of the product or company, there are stark differences between age groups. 

A whopping 83% of consumers aged 18-24, and 71% of 25-34-year-olds, consider the environment when making a purchase, in contrast to only 43% of consumers aged over 65. Furthermore, more than half (56%) of respondents aged 18-34 have reduced online shopping due to environmental concerns, compared to only 26% of those over 55.

Tailoring the messaging to different delivery personas will be key to encouraging consumers to favor sustainable delivery models. For an older generation less concerned about the environment, ensuring that green delivery options are also low-cost or free will be essential. In contrast, younger generations will be looking for clear proof that last-mile practices are sustainable, requiring more in-depth information about the delivery options.

Sustainability vs. Affordability 

Given the continued interest in sustainable home delivery options, even amid ongoing economic pressure, retailers can’t afford to miss the opportunity to educate consumers about how the eco-friendly delivery choice can also be a cost-saving option. Indeed, leading retailers recognize the need to keep broadening consumer understanding of the cost efficiencies of “green” home delivery, with the end goal of helping consumers meet their sustainability expectations while saving money in trying times. Educating the market about sustainable last-mile practices also represents an opportunity for retailers to differentiate their brand and build loyalty as eco-friendly businesses, while operating more efficiently to curb transportation expenses and protect their bottom line. 

In parallel with implementing the business processes, technology and tools to enable eco-friendly delivery practices, retailers need to think strategically about how they’re going to package and present sustainable delivery options to their customers to give them what they want: low-cost, environmentally-friendly home delivery.

The Descartes survey found that consumers interested in using more sustainable methods preferred the option of combining orders into a single delivery at the end of the week where applicable (57%), or consolidating multiple deliveries within a customer’s area (53%). Fifty-six percent of respondents also favored carbon-neutral deliveries (such as by electric vehicles) to minimize fossil fuel pollution. Similarly, by offering low-cost delivery slots with longer delivery dates, retailers can flatten out demand and avoid expensive, carbon-intensive management of peaks. 

When thinking about opportunities during the online purchasing process to educate consumers about the cost-saving benefits of sustainable delivery, retailers might consider recommending the most eco-friendly options at checkout — 53% of respondents were interested in this method — or ranking the environmental impact of all delivery options (46%) to help consumers make an informed choice. Plus, offering discount vouchers to customers who consistently opt for green deliveries will help influence buyer behavior and embed new attitudes toward online purchasing.

On a practical operational level, retailers and delivery companies with efficient fleet operations — using intelligent route optimization to increase delivery density — will reduce the number of miles driven, minimize CO₂ emissions, and cut fuel costs. These savings can be passed on to consumers through low-cost, eco-friendly delivery options, helping eliminate the need to make the customer choose between cost and the environment.

The speed with which retailers can entice consumers toward green delivery slots will play a key role in achieving corporate, industry and regulatory environmental goals. At the same time, this behavioral shift will position proactive retailers as environmental champions and, most importantly, quiet the cost-versus-sustainability argument that has slowed the progress of sustainable business practices. Moving forward, retailers have a compelling opportunity to boost environmental performance to meet consumer and shareholder sustainability expectations, whilet building brand loyalty to drive top- and bottom-line growth.

Johannes Panzer is head of industry solutions, e-commerce at Descartes Systems Group.