It’s evident that ecommerce is a permanent fixture in the retail industry, as the popularity of online shopping has steadily increased over time. According to Statista, there’s an estimated growth in online retail revenue that could surpass 1.7 trillion dollars by 2027. However, as ecommerce continues to expand, we are facing an issue with piles of boxes obstructing our entryways.
As stories such as the Great Pacific Garbage Patch gain traction, consumers are starting to contemplate the ecological impact of excessive delivery packaging and doubt the sustainability of ecommerce.
Sustainable Ecommerce
Green ecommerce, also known as sustainable ecommerce, entails conducting digital transactions in an environmentally friendly manner that does not deplete natural resources or harm the earth. Sustainable practices are those that fulfill the current generation’s needs while not jeopardizing the future ones.
Online shopping has completely transformed the way we purchase goods; however, there is a significant downside. The number of online shoppers has currently reached 2.64 billion, and by the year 2030, it is estimated that CO2 emissions from ecommerce logistics will reach 35 million tons, up from 19 million tons. This demonstrates the escalating environmental effects of ecommerce.
All aspects of an ecommerce business can be made more sustainable, including product fabrication, packing, transportation, and product returns.
Benefits of Becoming a Sustainable Brand
1. Increases In Business Value
Incorporating environmentally sustainable practices into your business has benefits beyond improving brand image. It can elevate the value of your business by drawing in new environmentally-conscious customers and strengthening the loyalty of existing ones.
To fully capitalize on your new fan base, consider raising your prices (which will consequently increase the value of your business). Customers are willing to pay more to back an environmentally conscious company. Specifically, 70% of consumers stated that they would be willing to pay an additional 5% for a green product that performs just as well as a non-green alternative.
2. A Target Market Match
As more individuals express interest in eco-friendly shopping, you have the opportunity to broaden your reach by entering established markets and exploring untapped markets. Millennials and Gen Z, who possess significant purchasing power and a preference for environmentally conscious products, are two target groups worth considering.
Gen Z and Millennials are more vocal about addressing climate change than older adults, as evidenced by their consumption of more climate change-related content on social media and their increased participation in initiatives such as volunteering and attending rallies.
According to the earlier First Insight research:
- 62% of Gen Z survey participants prefer to buy from sustainable brands, on par with Millennials.
- 73% of Gen Z is willing to pay more for sustainable products—compared to 68% of Millennials, 55% of Generation X, and 42% of Baby Boomers.
- 54% of Gen Z are willing to spend 10% more on sustainable products.
3. Attractive Company Culture
Individuals who strive to make environmentally conscious purchasing decisions also take pleasure in being employed by environmentally sustainable companies. Therefore, prioritizing sustainability can aid in attracting high-quality personnel and instilling motivating values within employees.
4. Acquire and Maintain Investors
Don’t forget about investors when it comes to those you aim to satisfy.
Many investors and business executives have embraced the “Environmental, Social, and Governance” framework as a beneficial investment screening strategy. The “ESG” approach includes assessing a company’s environmental practices, with a focus on how they contribute to environmental protection.
The 6th Global Institutional Investor Survey conducted by Ernst & Young revealed that after COVID-19:
- 90% of investors pay more attention to companies’ ESG performance when making investment decisions.
- 74% of institutional investors are more likely to divest based on poor ESG performance.
5. Make Smarter Investments
Prioritizing sustainability as a core value in your ecommerce business can lead to more advantageous long-term opportunities, as opposed to those that could potentially conflict with future environmental regulations. This approach may result in more informed investment decisions for you or your board.
6. Avoid Legal Intervention
By adopting environmentally-friendly ecommerce practices, you can stay ahead of the evolving legal environment where governing bodies increasingly prioritize sustainability concerns. Here are two instances of sustainable initiatives in practice:
- The Fashion Sustainability and Social Accountability Act: If passed, New York will hold fashion companies accountable for their role in climate change and other human rights impacts.
- Germany’s Supply Chain Due Diligence Act: Already in effect, this act requires German companies with 3,000 or more employees to take “appropriate measures” to respect human rights and the environment within their supply chains.
Implementing sustainable practices at present can alleviate the burden of regulatory obligations and avoid undesirable governmental interference in the future.
7. Reduce Business Costs
Reducing the energy usage and waste production of your business can result in cost savings through going green. Though it may sound unbelievable, doing the right thing is not necessarily difficult, akin to passing on a complimentary dessert.
World Wide Advantages of Greener Ecommerce for Business
By embracing green ecommerce methods, what benefits can companies expect to receive?
- Eco-friendly businesses attract customers. A McKinsey & Co. survey reveals 66% of respondents and 75% of millennials consider sustainability in their purchasing decisions. Brands that align with this demand stand to increase acquisition and customer loyalty.
- Positive brand image. 70 percent of US and Canadian consumers prioritize purchasing from brands they perceive as sustainable and eco-friendly.
- Access to new markets. 68 percent of consumers claim they are motivated to be loyal to brands that share their values. This means that implementing green ecommerce practices can unlock new markets and customer bases that are increasingly environmentally conscious.
- Cost savings. Green ecommerce practices help companies reduce waste and carbon footprint, and cut down on energy and transportation costs, ultimately boosting the bottom line of sustainable businesses.
How to Make Your Ecommerce Business Sustainable
In an ideal scenario, your business’s actions should yield worthwhile results. To bring that aspiration closer to fruition, it is imperative to prioritize sustainability in meaningful ways. These ways include:
Perfect Your Inventory Predictions
In industries such as food or outdated fashion trends, overstocked products result in wastage. Accurately predicting inventory needs can lower the amount of your product that ends up in a landfill.
Artificial intelligence is a means of achieving this objective. Ikea employs an AI tool called “Demand Sensing” to obtain almost 98% precision in predicting demand for over 450 physical stores and 54 online markets.
Make Your Packaging Environmentally Friendly
At least three levels of waste related to packaging are generated by ecommerce enterprises.
- Marketing packaging waste
- Product packaging waste
- Product delivery packaging waste
These are the suggestions for minimizing waste and transforming your packaging into an environmentally conscious option.
To promote sustainability, opt for materials that are both recycled and biodegradable. Delivery packages often contain non-biodegradable materials such as styrofoam and plastic. You can take the initiative and implement a sustainable packaging strategy, or seek assistance from a company like Packhelp. Packhelp offers eco-friendly ecommerce packaging that highlights its environmentally-friendly features to your clients.
Opt for the appropriate size of packaging when making deliveries to curb wastage resulting from oversized boxes and additional fillers.
Minimize packaging waste by eliminating extra packaging. Assess which materials can be removed or reduced without compromising the unboxing experience or delivery safety.
Rethink Your Manufacturing Process
It’s possible to incorporate sustainable practices not only after production, but also by reconsidering manufacturing procedures and creating a business model that prioritizes sustainability from start to finish. Online businesses can strive for carbon neutrality and adopt sustainable initiatives in their operations by:
- Leveraging Industry 4.0 technologies to enhance sustainability, such as artificial intelligence, the Internet of Things (IoT), cloud computing, and data analytics.
- Encouraging consumers to make sustainable choices through digital green nudges—policy initiatives that use digital technology to encourage consumers to make more environmentally friendly choices.
- Focusing on emission reduction or investing in projects to offset emissions.
Go Paperless
According to research, producing paper receipts in the United States results in the consumption of 250 million gallons of oil, 10 million trees, and 1 billion gallons of water each year. Therefore, transitioning to digital receipts is a significant action towards implementing sustainability practices in your business.
Sustainably Manage Inventory
By implementing sustainable inventory management practices, ecommerce companies can enhance their sustainability efforts through inventory optimization, minimizing excess inventory, and decreasing their carbon footprint.
Similar to other sustainable initiatives, studies indicate that it improves organizational efficiency and lessens expenses.
Strive for Regenerative Sustainability
Regenerative sustainability goes beyond simply averting additional destruction or fixing previous damage by adopting a comprehensive approach. Rather, it acknowledges the dependence of every living system on each other and strives to produce favorable results that enhance the welfare of both the community and the environment.
By prioritizing the planet’s long-term health, fostering crucial connections between ecological, social, and economic systems can be achieved. Regenerative sustainability can be adopted by e-commerce stores through:
- Implementing regenerative design principles in their warehouses and offices. This involves creating energy-efficient buildings that work in harmony with the natural environment, using sustainable materials, and integrating green spaces to support biodiversity.
- Partnering with suppliers and manufacturers that prioritize regenerative agriculture, which focuses on building healthy soils, improving biodiversity, and reducing the use of synthetic fertilizers and pesticides.
- Embracing regenerative supply chain practices, such as using renewable energy to power their operations, optimizing shipping routes to reduce emissions, and developing closed-loop systems for product returns and recycling.
Role of Consumers in Promoting Greener Ecommerce
Consumers have a significant part to play in promoting eco-friendly ecommerce by adopting good habits that generate beneficial effects. However, they cannot accomplish this on their own and require assistance from retailers, such as yourself.
What is one way to offer assistance? By enabling your customers to make knowledgeable buying choices.
Importance of Informed Purchasing Decisions
The demand for environmentally responsible brands has risen among consumers, but deciding what to buy can be complicated due to the multitude of factors that need to be taken into account, leaving customers feeling inundated.
What can be done to instill confidence in customers when they are making a purchase from your brand?
To appease customers with sustainable, fair, and long-lasting products, it is crucial to prioritize eco-friendly practices and engage in effective communication. Elaborated product descriptions aid in comprehending green goods, and superior images, videos, and useful user evaluations all encourage sustainable online business.
Promoting Green Initiatives Through Social Media and Word of Mouth
The role of social media cannot be underestimated when it comes to promoting eco-friendly commerce. This is because word-of-mouth advertising greatly benefits ecommerce companies by encouraging satisfied customers to recommend their products to their loved ones.
By incorporating your company’s environmentally friendly aspects into content assets across all customer touchpoints, such as websites, blogs, emails, and social media, you can raise awareness about your sustainable initiatives and encourage customers to make eco-friendly purchasing decisions.
Supporting Businesses With Sustainable Practices
Teaming up with organizations that share a similar mindset is also an extremely efficient approach to decrease your carbon emissions.
Any attempt, no matter how slight, such as collaborating with environmentally-focused organizations or making minor adjustments to your procedures, can make a difference. By doing so, you not only contribute to saving the planet, but you also become part of a group of enterprises with the same eco-friendly principles as you.
Side notes
Incorporating sustainable ecommerce practices is both environmentally beneficial and a smart business decision.
Furthermore, by advocating for ecommerce methods that prioritize sustainability, you are exhibiting a model for other industry players and motivating them to follow suit. Thus, in addition to contributing to ecological protection efforts, you are also making a constructive influence on society.
Carbon offset programs that can be readily obtained by your company and seamlessly provided to your clients in a way that is both efficient and uncomplicated.
