LSA publishes a report based on a study on the impact of e-commerce, qualified as independent, conducted by the firm Oliver Wyman with the support of the University of St. Gallen and on behalf of… Amazon. †This study is actually partly paid for by Amazon. This allowed us to conduct an investigation with great transparency. What no one has done before!” argues Mehdi El Alami, partner of the company, which is based on official statistics up to 2019 and on publicly available data.
However, this study still seems very beneficial for e-commerce, both economically, socially and environmentally.
Economy: the fastest growing e-commerce
†Physical (or offline) trade is growing on average in the eight countries surveyed. E-commerce is growing faster, but still represents only 11% of total revenue. Total turnover (in-store or online) increased by 2% per year between 2010 and 2019 to EUR 2.189 billion. E-commerce is growing faster than offline commerce in all countries surveyed, but still represents only 11% of total revenue in the eight countries in 2019 (or 251 billion euros), compared to 4% in 2010 (73 billion euros)Moreover, since 2010, retail chains have achieved five percentage points of total physical sales in the eight countries surveyed to reach 62% in 2019. These chains also account for 20% of online revenue growth between 2010 and 2019.
Employment: more logistics, fewer salespeople
†Overall, both e-commerce and physical commerce have steadily created jobs over the past decade. On a net basis, direct employment in trade increased by 1.3 million in the eight countries surveyed between 2008 and 2018. Of these jobs, approximately 300,000 were in e-commerce and 1 million in physical commerce† In addition, a direct job in e-commerce requires 1.2 additional indirect jobs for managing logistics and deliveries. A direct job in physical trade is accompanied by 0.2 indirect jobs in logistics. Buying products online is just as labor intensive as shopping offline.†
The report points out that e-commerce is creating more jobs in the logistics sector and fewer in the retail sector. But the study does not show the number of jobs destroyed by e-commerce and does not calculate the number of jobs created or destroyed simultaneously, nor even the quantitative and virtuous value of physical commerce in its territory.
Shops: inequalities by territories
The number of points of sale is decreasing (-0.9% per year between 2005 and 2019) but their average size is increasing, resulting in a stable total retail space in the eight European countries surveyed (+0.3% per year between 2005 and 2019 ). †Variations in physical trade appear to be mainly influenced by local demographic and economic dynamics (population, level of prosperity, importance of tourism) that make cities attractive.
Major cities with above-average online shopping percentages, such as London, Paris or Hamburg, show retail stability or growth. Mid-sized or smaller cities with a more affluent and growing population show above-average trends in retail and job growth, as well as a higher frequency of online shopping. In contrast, medium-sized or smaller cities and suburbs with declining populations and below-average incomes show both a decline in physical commerce and a below-average frequency of online shopping.†
In other words, the independent trade suffers in favor of shopping centers or flagships in the city center and e-commerce.
Ecology: e-commerce would be greener
According to the study “The physical sale of non-food products generates between 1.5 and 2.9 times more CO2e than e-commerceIn the most common situation (where a consumer drives to a store, buys a product and does not return it), driving to a physical store generates between 3 and 6 times more CO2e than driving to a physical store. online purchase of a non-food product: “In this case, emissions across Europe average 4,100 g CO2e for in-store travel and 900 g CO2e for online orders. In the “average case”, which represents the average of the different situations that exist in reality, purchases in stores generate 1.5 to 2.9 times more CO2e per product sold than online purchases.†
†Differences between product categories are mainly related to store productivity, travel distances to stores, return rates and package weight” according to the report. For example, the purchase of a book in a physical store causes an average of 1.6 times more emissions than the purchase online. For a piece of clothing, the multiple is 2.9.”In the eight countries combined, CO2e emissions are equivalent to the purchase of a book or consumer electronics product online or in a physical store that can be reached on foot (about 700 g CO2e each time).†
The report nevertheless indicates a variation according to the countries that “There are differences between countries, areas and product categories. It should be noted that France has one of the lowest impacts with 400 g in online commerce and just 600 g in brick-and-mortar stores”.
Finally, the main factors explaining this difference are the energy consumption of the buildings (160 g CO2e for online purchases and 1,200 g CO2e for offline purchases), transport over the last kilometer (200 g CO2e for online shopping and 600 g CO2e for consumers who drive to a physical store) and packaging (100g extra CO2e for online shopping).
Environment: e-commerce would be less destructive
†E-commerce saves 4 to 9 times traffic that it generates elsewhere. E-commerce deliveries to consumers account for 0.5% of total road traffic in urban areas, while physical commerce accounts for 11% of traffic. These figures are taken from analyzes relating to the urban areas of Paris, Berlin and London. For example, in the Paris region, physical commerce (including restocking stores and moving consumers into stores) generates 4.7 times more traffic per unit of sale than e-commerce deliveries. In general, e-commerce deliveries replace consumers’ trips to stores and save between 4 and 9 times the traffic that would otherwise be generated by these purchases†
However, the study covers all agglomerations, while a more accurate count is needed based on urban density and mode of transport used. In Paris, according to the latest OMNIL report, road traffic does not even represent 5% of the inhabitants’ daily journeys, compared to 65% for walking, which causes no pollution.
Finally, the report addresses another critique of e-commerce: soil artificiality in Europe, which according to the study does not even represent 0.3%. †Total land use is more important for physical trade than for e-commerce when the areas used for logistics, sales and parking are taken into account. Logistics occupies less than 1.5% of the total artificial land. E-commerce represents 12% of the total built-up area used for logistics in France, 9% in Germany and about 20% in the UK. (…) The area of e-commerce is increasing by 13 to 17% per year, in proportion to the turnover increase of the latter†
If e-commerce required two to three times more space for logistics, it would require no sales space and much less parking space. The location of warehouses can also have an indirect impact on the impact in terms of CO2e, but “the development of European cities has gradually moved warehouses out of city centers due to pressures on real estate, spatial planning policies and the search for economies of scale†