Sustainability. One little word with so much packed in.
From a consumer perspective, having strategies to reduce negative environmental and social impacts is shifting from “nice to have” to “must have.”
What’s causing this shift? Why, Millennials and Gen Z, of course.
By 2030, Boomers will have transferred as much as $68 trillion to the younger generations. This shift in purchasing power also comes with a shift in consumer values, leading experts to predict a “tipping point where sustainability will be considered a baseline requirement for purchase.”
The time to start preparing is now.
If you’re like most brands or merchants, the question is how. In this article, we’ll share the central starting points to help you start building a more sustainable e-commerce business.
Tomorrow’s leading online businesses don’t view sustainability as a way to tick off compliance tasks. And they’d never dream of greenwashing.
Instead, they see the rising interest in sustainability for what it is: a huge opportunity to win with the increasingly conscious consumer.
In fact, there’s been a big change in business leaders’ understanding of the return on sustainability in the past few years. In 2023, 63% of executives agreed that the business case for sustainability is clear — up 3X from 21% just a year earlier in 2022.
The evidence is undeniable. Sustainable products are gaining more and more market share and data shows that consumers are increasingly willing to pay more for “values-based purchases,” with growing numbers of younger consumers shifting to sustainable brands.
The question for modern retailers isn’t whether or not to make your business more sustainable. It’s how to make sure you take action now to avoid getting left behind in the future.
The word “sustainability” means different things to different people. Where should you focus your efforts in 2024?
According to recent research from the World Economic Forum (WEF), seizing this new sustainability opportunity starts with solid reporting and concrete goals. After all, you can’t manage what you can’t measure.
The WEF also describes the emergence of an “eco-digital era” in which the business landscape is more data-driven, accessible, and sustainable. Their advice?
To thrive in this landscape, businesses must:
In 2024, companies must make a genuine commitment to sustainability and have the data to back it up.
The great news for retailers of every shape and size is that there is no one way to “do sustainability”.
Even if you didn’t start with an eco-friendly brand from day one, there’s almost always a way to start taking firm steps toward a more sustainable business.
These six steps are the perfect place to start.
It’s no longer a question: Most US consumers are willing to pay extra for more sustainable products.
This means there is solid ROI in strategies such as:
Pet accessory retailer Harry Barker exemplifies how using sustainable materials doesn’t have to mean sacrificing quality. In fact, the company’s positioning is centered around it, with products that “strengthen the connection between people, their pets, and their planet.”
Most e-commerce businesses’ environmental impact is closely tied to their procurement processes. Some of your products or components might originate halfway across the world in a facility you’ve never visited.
That’s why it’s crucial to partner with suppliers with a proven commitment to sustainability. With the right partners, you can work together to use more sustainable materials and reduce your carbon footprint.
Here are some early steps to get started:
We can’t talk about supply chain sustainability without discussing Patagonia. The outdoor gear retailer has made a commitment to increasing “material traceability” by mapping out all the entities in their supply chain in an effort to show consumers where their products come from.
If your ethically-sourced, eco-friendly product arrives to your customer surrounded by plastic bubbles, you’re sending mixed messages. Packaging is a critical part of sustainability, with 79% of consumers actively looking for products in eco-friendly packaging.
Don’t miss out on opportunities to reduce packaging waste by:
Blueland sells a refillable cleaning system that helps divert single-use plastic bottles from landfills. Consumers buy a reusable bottle from the online retailer and the company ships dissolvable cleaner tablets in plastic-free packaging. Easy peasy, and way more eco-friendly.
Last-mile delivery accounts for 53% of total shipping costs. If left unchecked, carbon emissions from urban delivery traffic could become a major sustainability issue for your business.
How can you optimize last-mile delivery? Here are some simple tips:
Eliminating extra trips starts with collecting the right data. Mike Robinson is a co-founder of The Eighth Notch, a software platform that enables shippers to eliminate unnecessary delivery stops.
On The Decarbonizing Commerce Podcast, he explained why reducing stops is a metric that works for both businesses and the environment: “If the truck used to come to my house five times a week and now it comes three times… every time that truck doesn’t need to stop… there’s a multi-dollar savings associated with it.”
In the world of online shopping, your customers will have returns no matter what you sell. Your job is to implement a system that gets returned items back to stock for resale, liquidated, recycled, or otherwise disposed of in a timely and ROI-friendly manner.
There are a few approaches to achieving a more sustainable returns process:
If you can’t restock or resell returned products, donating them is an excellent sustainable option that comes with a side of positive PR. Many mattress retailers have a guarantee that allows customers to return or exchange products that don’t work out. Rather than spending resources shipping returned mattresses back to a warehouse, Avocado donates them to local nonprofits in need.
Yes, consumers are willing to spend more on e-commerce brands with sustainable business practices. The problem is, they continue to report difficulty identifying these brands.
That puts the onus on you to tell shoppers about the positive steps you’re taking toward sustainability for your online store.
Use a variety of communication channels, including social media, product descriptions, and packaging, to answer consumer questions like:
If your commitment to sustainability pulls you squarely out of the “cheapest” column for your customers, be transparent about why. On their Ethos page, luxury fashion brand Rêve En Vert states their belief that “cost should correlate to quality & longevity.” In other words, they’re not the cheapest, and they’re proud of it.
Today’s purchasing decisions don’t look like yesterday’s.
Driven by consumer demand and the imperative to do the right thing, embracing sustainable practices has become table stakes for all modern businesses, including e-commerce.
From product development to last-mile delivery, there are many opportunities to improve your efforts and build a future that’s both environmentally and financially sustainable.
By identifying the best opportunities for your business model and transparently communicating those commitments, you can continue to win loyal shoppers in an increasingly conscious market.
Need more inspiration along your e-commerce journey? Swing by the SellersFi resource hub for more ways to build a future-ready retail business.
