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Energy Economics Weekly Briefings

It’s Complicated: Energy Use in E-Commerce versus Traditional Retailing Channels

Written by: Ellen Hughes-Cromwick

Key Takeaways:

  • There is limited empirical research on the energy used in e-commerce sales as compared to traditional “brick-and-mortar”retail sales.
  • Given the recent trend toward strong growth in online sales, these studies will be important in understanding the mix and magnitude of energy use associated with this transition.
  • Much more research needs to be conducted in order to understand the energy mix and use associated with online shopping which is likely to continue to grow strongly.

Is more energy consumed when a shopper takes a car ride to the local mall and buys a few items, or if they order from their mobile app and just wait for a home delivery?

  • This is an important question in light of the increase in e-commerce retail sales. The U.S. Census Bureau estimates that purchases at nonstore retailers totaled $436 billion during the first nine months of this year, up 10.1% as compared to the same period one year ago. This growth in e-commerce retail sales is over three times faster than growth in total retail sales.
  • E-commerce sales represent 10.4% of total retail sales, but is expected to grow further in coming months and years.
  • A recent literature review was published online June 30, 2017 by the Journal of Cleaner Production (see here). As the authors reviewed the literature, the variety of studies and methods used across several countries did constrain the extent to which the authors could draw major conclusions.
  • The eleven studies reviewed included a total of 16 cases. The authors categorized their findings according to several drivers, most of which are noted in the top box. Packaging is a key energy differentiator between online buying as compared to store shopping. Freight transport for online “the last mile” delivery is quite different than passenger transport for store shopping last mile. Product returns can diminish energy efficiency associated with online shopping. The review quickly dispels the notion that such a calculation is close to adequate.
  • The review categorizes the case studies according to the relative impacts on energy efficiency associated with each of these factors, as shown in the bar chart. Note that there are more cases where the total energy consumption is higher for traditional store shopping than home delivery (top blue bar). The authors recorded 14 cases in which packaging for online purchases generated more energy consumption as compared to the traditional retail channel.