Laixa - 30 June 2021
While there has been a meteoric rise of e-commerce over the past decade, this new frontier of retail has a dark side. According to the SustainAbillity Institute, more than 2 billion tons of waste, including used products and packaging, end up in landfills around the world on an annual basis due to e-commerce.
E-commerce is also a fuel-guzzling industry. In 2020, Cyber Monday resulted in $10.8 billion in online sales, making it the largest shopping day in e-commerce history. Millions and millions of products had to be developed, procured, packaged and shipped to customers, representing massive amounts of non-renewable resources getting used up by online retailers.
Another problem with conventional e-commerce? Not all online retailers are committed to ethical and fair-trade practices. How products are made and sourced leave a lot to be desired in off-shore factories who pay little heed to working conditions, providing suitable wages, and encouraging child labour.
Sustainable and green e-commerce aim to change all that. A growing number of younger consumers—many who have grown up with climate science and education on social injustices—are demanding change. Online retailers are being forced to rethink their operations to tackle a wide range of issues plaguing the world today. Customers are adamant accountability and transparency—and that e-commerce players step up to the plate for the better good.
What are consumers looking for in green and sustainable e-commerce?
Millennials, the most self-conscious generation in terms of their future spending and impact on society, make up one of the largest consumer groups with an ever-increasing purchasing power. A recent Accenture survey found that 61% are making more environmentally friendly, sustainable or ethical purchases, with the vast majority likely to continue post-pandemic. However, the study also pointed out that retail consumer behaviour across all age has irrevocably changed as they start to shop more locally—and mindfully.
But what are consumers truly looking at when shopping online? Apart from glossed-over About us pages that tout responsibility and consideration for the environment, how are people shopping online in a more sustainable and ethical way?
There are many aspects to ethical online shopping consumers are considering. First, they tend to analyze how clear retailers’ ethical and supply chain policies are; for example, they will want to know where the products are manufactured, how well employees and suppliers are treated (fair trade), if the products are cruelty-free, do they participate in the circular economy, etc. Apart from researching companies’ social and environmental records, they may go even further to ensure that the online retailer does not use tax avoidance strategies, for example.
Products designed for a safe end of life
Online shoppers want to know what their options are regarding their products’ end of life. Thanks to technological innovations, e-tailers are aiming to redesign their products so that they don’t end up in landfills or waterways. The key is providing customers information about the best companies to donate used products to, any take-back programs in place, and how they can be responsibly disposed of (what has to be removed from the products and what kind of facilities should they go to).
Environmentally friendly shipping options
It may be tempting to want to compete with Amazon’s same-day delivery options, but that will force e-commerce companies to make decisions that are inevitably less environmentally friendly. Many online retailers are adopting a slow commerce movement, asking customers to plan, be patient and get their goods at a later date. This strategy allows them to consider the best and most ecologically sound means to ship out orders. An increasing number of consumers are choosing for longer transit times to forgo the impact of express air shipments on the environment.
Limited or eco-friendly packaging
Between 60 to 70% of consumers are actually willing to pay more for products that are sustainably packaged. The reason? Studies show that 90% of packaging waste is sent to landfills. Consumers are looking for packaging that is made from sustainable material—that is from 100% recyclable and post-consumer waste—and is biodegradable.
More effective returns management
Consumers want e-tailers to get orders right the first time to minimize returns—not only for a better customer experience but also to dramatically eliminate the environmental impact. Reducing fulfillment errors through automated sales order routing goes a long way to reducing a business’ carbon footprint
One easy way for online retailers to adopt a greener and more sustainable approach to e-commerce is by using carbon offsets for unavoidable areas in which they pollute. Audited offsets with verified incremental impact are the ideal solutions, such as new forest planting projects, which extra CO2 out of the atmosphere. Many businesses are also allowing customers to buy offsets when they purchase products and services.
This is just an overview of green and sustainable e-commerce as well as quick tips on how e-commerce companies can better commit to sustainability. This fundamentally transformed way of doing business is not just a marketing ploy. To remain relevant and competitive, e-commerce businesses will need to up their game to better serve environmentally-aware consumers.