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Sustainable E-commerce: 6 ROI-Friendly Tips and Examples

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.

Why Make Your Business More Sustainable?

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 New Sustainability: Which Areas Are Top of Mind in 2024?

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:

  • Find a balance between quick wins and long-term sustainability
  • Invest in sustainable transformation initiatives
  • Weave sustainability into products and services
  • Choose partners that are equally committed to sustainability

In 2024, companies must make a genuine commitment to sustainability and have the data to back it up.

6 Ways to Make Your E-commerce Business More Sustainable (+ Examples)

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.

1. Develop and Launch Sustainable Products

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:

  • Incorporating sustainability goals into new product development
  • Redesigning existing products to be more sustainable
  • Using eco-friendly, raw, or recycled materials when possible
  • Incorporating renewable energy into your production process

Sustainability In Action

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.”

2. Clean Up Your Supply Chain

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:

  • Develop a supplier sustainability scorecard
  • Localize your supplier network
  • Use technology to optimize your supply chain
  • Invest in affordable ways to offset your emissions

Sustainability In Action

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.

3. Choose Sustainable Packaging

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:

  • Using circular packaging materials like recyclable or biodegradable boxes
  • Reducing packaging by ensuring product packages are durable enough for shipping
  • Working with 3PLs that offer eco-friendly options
  • Bundling items together to reduce your overall packaging

Sustainability In Action

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.

4. Optimize Your Last-Mile

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:

  • Offer customers sustainable shipping options like consolidating deliveries or picking up packages at local fulfillment centers
  • Invest in low-emissions vehicles or seek delivery partners who use them
  • Repurpose physical stores into hybrid hubs for shopping, fulfillment, and returns
  • Harness analytics to optimize routes

Sustainability In Action

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.”

5. Revamp Your Returns Process

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:

  • Use a returns management system with clear policies, claims rules, and approval hierarchies
  • Partner with a 3PL or specialized company to handle returns for you
  • Optimize product listings with detailed descriptions to decrease returns
  • Give customers the option to return items in-store
  • Donate unusable returned items locally

Sustainability In Action

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.

6. Get Clear — as in Transparent

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:

  • How do you source your materials and products?
  • How do you select suppliers and partners?
  • What chemicals and plastics (or lack thereof) are in your products?

Sustainability In Action

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.

Go From Trying to Doing with Your Sustainability Efforts

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.

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