Retail vs E-Commerce: Which is More Eco-Friendly?

As of 2023, over 2 billion people in the world resort to online shopping – a number that has skyrocketed since the age of digital media and social influence has made searching for shoes or a new laptop possible with just a few taps or clicks. 

This has made many of us wonder – are in-person shopping stores becoming obsolete? What about hallmark shopping traditions such as the “Soldes” in France or Black Friday in the United States? 

All of these questions also incite a new debate on the horizon – is it a good thing for retail stores to lose momentum, and which method of shopping is ultimately more eco-friendly? 

In this article, we’ll talk about the differences between retail and e-commerce, the pros and cons of each, and which is ultimately more eco-friendly.

Retail shopping refers to the method of buying clothes, groceries, technology, and more from an in-person store to be used for personal consumption.

Popular examples of retail shopping include:

• Convenience stores such as CVS or Walgreens
• Malls with multiple stores to boost in-person purchases
• Department stores such as Macy’s or Nordstroms in the U.S. 
• Speciality stores without an online website which forces a trip to the physical store

Retail shopping not only involves comparing and contrasting prices and features of products, but will often include asking sales associates questions, reading customer reviews, and trying on the item (especially if the retail item is a pair of shoes or a clothing garment).

💡Retail shopping can occur both via in-person shopping or as a result of online orders directly from the retailer’s website.

Even though excess consumerism remains a pivotal issue in countries such as the United States, retail shopping is still a paramount for our global economy – as consumer spending is what helps to boost economies worldwide. This was the thought process behind the infamous stimulus checks given to Americans in the midst of the Covid-19 pandemic. 

👉 Did you know that Walmart, Amazon, Costco, Carrefour, IKEA, and The Home Depot are just a few e-commerce businesses on a long list of top global retailers?

E-commerce, also known as electronic commerce, refers to the notion of buying goods or services or transferring funds solely via the internet. 

E-commerce has taken off as a result of people being unable to shop in-store during the worldwide pandemic in combination with growing technology. Both of these factors have made the convenience of e-commerce more appealing and seemingly more time efficient than in-store retail shopping. 

Some of the pros of e-commerce include:

• Easier for Entrepreneurs – It’s easier to open an e-commerce store than an in-person store, such as people selling their arts & crafts on Etsy
• Convenience – Whenever someone has spare time on their commute to work or in between classes, it isn’t hard to pull up an e-commerce store on your smartphone or laptop and start browsing for what you need – which can help save a trip to the store.
• Lower Operating Costs –  Strictly e-commerce stores don’t need to hire employees or rent out a store space, which can allow more funding for commercials, partnerships with social media influencers, and other general advertisements to boost sales. 

However, there are cons to e-commerce, such as:

• Potential Waste – Online shoppers may be unable to return an item they don’t like or that doesn’t fit properly, which means that it can end up going to waste.
• Encourages Excess Consumerism – These days, in order to companies to comply with their own shipping costs – online shoppers can only be granted free shipping if they spend a certain amount of money. This often requires people to buy more than they want to in order to meet the free shipping, which can result in the shopping consuming more than they otherwise would. 
• Carbon Footprint Created by Shipping & Packaging – Exportation costs and the carbon footprint for items to travel long distances via plane as freight shipping can catch up with your company. In addition to this, e-commerce stores have no choice but to use packaging – and companies that don’t make use of sustainable packaging can fall subject to even more excess emissions.

👉 E-commerce is likely to continue growing, even as digital advancements and the constraints of the previous pandemic fade – seeing as e-commerce provides the opportunity for convenient shopping and easier reach to new consumers worldwide.

While both retail and e-commerce deal with the concept of buying and selling goods, the two methods differ in the way consumers find and purchase from the seller. 

Before understanding which is more eco-friendly, it’s important to understand the main differences between retail and e-commerce. 

Additional differences between retail and e-commerce include:

• Physical Stores – Retail usually includes both physical and online locations, while e-commerce tends to only be offered online. However, popular e-commerce stores such as Amazon have started to try their hand at physical store locations.
• Accessibility –  Oftentimes, retail stores will require an in-person visit, whereas e-commerce allows consumers to shop from wherever they are – which is beneficial both for the customer and the business. 
• Maintenance & Operating Costs – Seeing as retail stores require employees, managers, and a space to rent – they are pricier to run than an e-commerce store. 
• In-Store Shopping – If you check out an e-commerce store’s website and see that the item you want isn’t currently in stock, it’s no big deal – you just check back every once in a while to see if it’s available. However, in-person retail stores need to remain mindful of their in-store inventory for shoppers, as failure to do this can rub customers the wrong way and stray them from returning to the store and giving the retail company business. 
• Shopping Experience – One of the most overlooked yet key differences between retail and e-commerce shopping is the consumer's ability to test out the product before purchasing. In-person stores allow consumers to try on or test out the product, whereas e-commerce requires utmost trust and faith in the honesty of other customer reviews. 

👉 Although the lines between retail and e-commerce have blurred seeing as many retail stores now offer online shopping, the difference between the two is still evident – especially in terms of how each impacts the environment.

The truth is, the environmental impact of retail and e-commerce shopping is bound to differ depending on various parameters – such as the environmental impact of the store’s operational methods themselves. 

Let’s break down some of the differences between retain and e-commerce shopping in terms of their environmental impact:

In-Person Retail Shopping

• Travel to Store – Some customers, especially those who don’t live in urban areas, may have to drive long distances to reach physical stores and shop in person. However, people who live in isolated residences like these are becoming less and less likely to make the trip out to a store – resorting to online shopping instead. Therefore, the amount of emissions created via transportation as a result of in-person retail shopping is slim.
• Energy Consumption in Store – In person locations mean excess energy consumption – seeing as the lights, air conditioning and heating need to be kept on to keep customers and employees both safe and satisfied while shopping and working. This excessive energy or electricity consumption is irrelevant for e-commerce stores. 
• Providing People with Bags – In Europe, providing people with bags is becoming a thing of the past – but in the U.S., stores will offer paper or even plastic bags for customers. This could result in excess plastic consumption and greenhouse gas emissions.

E-Commerce & Online Shopping

• Shipping & Packaging – By far the most emission intensive element to online shopping, it is imperative that e-commerce businesses make an effort to use sustainable packaging to avoid generating waste.
• Storage – Even though e-commerce businesses don’t need a physical store, they do need a warehouse to store inventory – which also requires land use and energy consumption.
• Consumers Ordering More Merchandise – It’s easier to order more online seeing as you don’t have to carry it around the mall or back to your car after shopping. However, the problem with this is that it can contribute to consumerism culture – which is key to mitigating climate change.

👉 Ultimately, the environmental impact of a product is more important to consider than whether the user purchases it from an in-person store or online – with factors such as the life-cycle of a product and how the materials were sourced.

Our shopping and consumerism habits are more important than how and where we decide to purchase our favorite products from. 

Here are some tips to make sure your shopping habits are as eco-friendly as possible:

• Only buy clothes that you know you will wear, unlike an outfit that will only be worn once just to be tossed or donated at your local thrift shop – such as what Taylor Swift fans are doing with the Eras Tour outfits following the concert. 
• Whenever possible, try shopping at a secondhand store or a thrift shop – this allows you to get more clothes for a cheaper price all whilst being aware that you are giving the piece of clothing a second life. 
• Nowadays, many retail stores offer customers to order their merchandise online and pick-up in store options. This allows for the best of both worlds with the convenience of shopping at home and also avoiding excess emissions from shipping via e-commerce.  
• Look for companies that have shared their own mission statements towards environmental reform. Whether they are an ecommerce business or specialty retail store, a business that makes an effort to reduce emissions is always a better place to buy your favorite products from.
• Consumers should share reviews and research their potential purchases carefully in order to promote the importance of eco-friendly practices and to prevent unnecessary consumption.

Overall, it’s hard to delineate a massive difference in the environmental impact of products purchased from retail stores or via e-commerce – meaning it’s especially important for us to remain mindful of our purchasing habits.

If reading this article about retail vs e-commerce has made you interested in reducing your carbon emissions to further fight against climate change – Greenly can help you!

It can be challenging to determine when it’s best for your company to shop online or in stores, but don’t worry – Greenly is here to help. Click here to schedule a demo to see how Greenly can help you find ways to effectively implement and utilise green finance. 

Greenly can help you make an environmental change for the better, starting with a carbon footprint assessment to know how much carbon emissions your company produces.