The Efficiency Potential of E-Grocery
E-grocery is a rapidly developing industry, through which environmental impacts, both positive and negative, stand to be made. With increased attention from researchers and policymakers, e-grocery could alleviate some of the environmental impacts posed by the current last-mile of the food supply system.
Electricity Use
E-grocery orders can be fulfilled in several ways. One way is through a dedicated fulfillment center that only serves online shoppers. Fulfillment centers stand to have a greater impact on reducing their electricity use than any form of e-grocery that utilizes traditional brick-and-mortar grocery stores.
While grocery stores are engineered for the customer experience, fulfillment centers are designed for efficiency. A store must maintain bright lighting, a comfortable temperature, and cold or frozen foods must be available for customers to access, causing inefficiency in cold storage. Fulfillment centers are not accessible to customers, so electricity used for lighting, heating/cooling, and refrigeration can be significantly reduced. More research is needed to determine the extent of the benefits of such fulfillment centers.
Food Waste
Traditional brick-and-mortar grocery stores must cater to their customers, often implementing wasteful practices like overstocking and overly cautious sell-by dates that contribute to food waste at the retail level. E-grocery outfits operating out of traditional grocery stores are constrained by these same practices; but fulfillment centers don’t need to appeal to customers to boost sales and therefore don’t need to implement such wasteful practices.
Additionally, these facilities are purpose designed for food preservation and could utilize customer data to reduce over-stocking of goods. It’s also possible that pre-portioned meal kit services reduce food waste on behalf of the customer. The means and extent of food waste reduction made possible by fulfillment center-based food delivery needs to be investigated more deeply.
Transportation
Last-mile delivery for non-food e-commerce can be more emissions efficient because orders are grouped and delivered along the best route. While unstudied, it’s possible that e-grocery could also utilize order-grouping to reduce emissions, however perishability and fragility of orders will complicate this effort.
While likely easiest to implement in dedicated fulfillment centers, it’s possible that order grouping could occur when services are provided by third party apps from traditional brick-and-mortar stores. Service providers could strategically group orders by delivery address and incentivize customers to choose certain delivery times through dynamic delivery pricing, making it easier to group orders and dodge peak traffic times.
E-grocery is most commonly used in cities and could contribute to transportation externalities in urban centers like pollution, congestion, and curbside space. While order-grouping could help reduce transportation externalities from traditional grocery shopping, the source of the order must be considered. Large fulfilment centers benefit from economies of scale and are more efficient, but generally cannot be placed in cities due to size constraints. Smaller fulfillment centers lose efficiency from scale but can be located closer to their destination, reducing emissions per good by travelling shorter distances. Further research into these trade-offs can help determine the most efficient and sustainable method of delivery.
Although e-grocery has emerged primarily in cities, rural areas stand to benefit from these services as well. While these areas don’t typically struggle with congestion, residents may need to travel further distances to grocery shops. E-grocery order-grouping could reduce emissions-per-good in rural areas by aggregating vehicle-miles traveled. Such benefits have been seen in non-food related e-commerce, but it’s unclear how transferable these findings are to e-grocery due to the perishability of the goods. The potential uses and benefits of e-grocery in non-urban centers needs to be explored.
As e-grocery becomes a mainstay of our food system, the potential to reduce environmental impacts must not be ignored. Too little data is available to make clear policy recommendations at this time, however this blog outlines several possible sources of efficiency improvements. Researchers must begin investigating the environmental impacts and opportunities posed by e-grocery and develop robust policy recommendations. Only then can we make informed strides towards bettering the last-mile of our food supply system.
