Most subscription services are not delivering on sustainability
As the internet increasingly is used for commerce, depending on the location, many consumers also have a growing appetite for convenience and savings, a concept illustrated by online subscription services. These offerings often work in two ways: either by having scheduled automatic product delivery —for example a water filter every three months—or by subscribing to a brand’s random selection of products, delivered to your doorstep on a regular basis.
Whatever the format, home delivery subscription services are claiming their share of the e-commerce boom, totaling over US$2.6 billion in sales in the United States in 2016, according to a study by McKinsey & Company, published in February 2018. By the end of that same year, there were over 3,500 various offerings available to online consumers.
Marketed often as products to improve our lives, the landscape continues to be shaped by a few leaders, who have supported the industry’s 100 per cent annual growth in the five years between 2013 and 2018. Mainstream retailers have recognized the opportunity, and many have rolled out a variety of subscription services.
The three primary factors that have supported this industry’s impressive growth are: replenishment, curation and access, says McKinsey & Company. Over half of subscribers use the service for the curated products, seeking a highly personalized experience, while nearly a third are driven by convenience, attributing their purchase to replenishment. Only 13 per cent of consumers use the services to access special offerings.
However, one of the commonly overlooked considerations is the environmental impact of these subscription services There seems to be a box made for everyone—from beauty/grooming to pre-made meals. Whether you’re receiving a foundation sample, fresh razor or this week’s groceries, there are environmental consequences that we don’t see.
Food delivery kits
There are interesting positive impacts for some delivery services, specifically as they pertain to food waste. Currently, wasted food accounts for 8 per cent of greenhouse gas emissions according to the Food and Agriculture Organization of the United Nations, costing nearly US$1 trillion globally. Assessing the food waste of meal kits against grocery shopping, a University of Michigan research team found that meal kits provide much more accurate portions of food for the same meal, which drastically reduced each households’ food waste and carbon emissions.
The same study compared the impact of travelling to the grocery store and the delivery of meal kits. Combining the delivery of multiple kits proved to be much more efficient than travelling to stores, as the distribution stage accounted for 11 per cent of grocery store meal emissions compared to only 4 per cent for meal kits. The number could drop even further with the introduction of drones and electric vans into the delivery fleet.
Unfortunately, excess packaging continues to plague the e-commerce and subscription box industry, despite the handful of services that have introduced sustainable materials.
The ugly face of beauty and fashion
Personal care subscription services are becoming more and more popular in some parts of the world. The trade-off for a ‘mixed bag’ of beauty or grooming products is more single-use plastics consumption. The beauty industry faces particularly significant challenges, with plastic consumption for packaging skyrocketing 120 times since 1960. The lack of infrastructure in place to deal with such high levels of plastic packaging—necessary to maintain product quality and safety—results in an unsustainable use of plastic.
Although direct-to-door-delivery is less carbon intensive, the real damage occurs when a consumer returns their products, with over 1 million packages being sent back per day in December of 2019. In total, nearly 1 billion trees were cut down to fulfill cardboard packaging demands for the 165 billion packages sent in 2017. What’s more is according to returns management company Optoro Inc., the costs associated with reselling a ‘free return’ makes it much more profitable to discard the product entirely, directing billions of pounds of returns to landfill or incinerators, which perpetuates unsustainable consumption practices.
Finally, the most pressing issues that subscription services fail to address is the need to reduce. These services promote consumerism in three key areas: they reward uncertainty, they promote behavioural consistency and they eliminate the need to choose.
Here’s what that means:
In delivering a selection of ‘curated’ products, subscription services generate positive reinforcement by offering the thrill of an unknown reward each installment. They also encourage behavioural consistency, as customers often hold subscriptions to multiple services. And finally, by offering a handful of products and eliminating choice, companies adopt responsibility for what the consumer wants, rather than what the consumer needs.
“Given our increasing resource consumption rates we need to consume differently and more lightly,” says UN Environment Programme’s Sustainable Lifestyles Programme Officer, Garrette Clark. “Thinking through what we really need, what enhances our well-being and what options are out there that work for us can help adjust our decision-making.”
A growing number of companies are looking to implement more sustainable products into their business models. Despite holding a relatively small share in the subscription box market, these eco-friendly options remain competitive by providing premium, vegan and plastic-free alternatives. As plastic reduction and ethical production practices become more popular, these services offer solutions to a growing demographic of eco-conscious consumers.
Adjusting consumer mindsets and promoting sustainable practices for businesses are two essential steps that need to be taken towards achieving sustainable lifestyles. Turning away from the make-take-waste economy and encouraging consumption reduction is pivotal to develop environmentally sound practices. However, the responsibility does not solely rest on the consumers. Businesses must introduce sustainable solutions into their supply chain and operations to shift consumer culture and behavior.
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