In 2022, focus on sustainability and eco-awareness has never been bigger. No longer a ‘fringe issue’ as it once was, having green awareness and a sustainability initiative is something that all businesses should be considering.
With half of all sales projected to be online within the next ten years, it’s no surprise that this industry takes its toll on the environment. The product, how it’s packaged and shipped, and everything that goes on behind the scenes to enable this, all have environmental impacts. As public awareness continues to increase, businesses are being compelled to take action.
Being green is an attainable goal for all businesses, and what’s more, it’s not just ‘effort for no personal gain’. As well as the benefit of doing our part to reduce environmental damage, there are benefits to be reaped by individual businesses by going green.
What Is Green Ecommerce?
Green Ecommerce is sustainable, or eco-friendly eCommerce. It means that whilst brands sell goods and services online, they actively consider the environmental impact of doing their business, and take steps to reduce any environmentally damaging impact. It’s environmentally conscious eCommerce that strives to adapt its business model to make products more sustainable and eco–friendly whilst reducing their overall carbon footprint.
Why Is Green Commerce Important?
Each year in the US alone the amount of cardboard used in packaging equates to over one billion trees. The freight movement is the fastest growing source of greenhouse gas emissions and last mile delivery growth will increase carbon emissions 30% by 2030. The damaging impact that eCommerce has on the environment only continues to grow.
The internet is responsible for a billion tonnes of greenhouse gas emissions every year, and this figure is expected to double by 2025. Internet usage, production of goods, packaging and supply chains are all responsible for this. Green Commerce is important because it addresses this. We have a responsibility to the earth, and doing any part that we can in order to make changes to this is important.
Most of the ways to go green don’t require big or significant changes in lifestyle or business models. The small changes that businesses make can have a big impact, and actually these changes don’t have to reduce profitability either.
The Good News
The good news is that investing in Green eCommerce isn’t only good for the planet- it’s also good for your business. Saving the planet has benefits for everyone. Going green can be done on your terms, with changes that fit into your business model. Regardless of whichever changes you make, you will be granted the benefit of being an environmentally conscious brand, which is a huge plus point for customers today.
70% of US and Canadian customers consider it to be important that a brand is sustainable or eco-friendly. 68% of customers are motivated to be loyal to a brand by knowing that they share similar values. A recent study showed that sustainability was the second most important thing (after product quality) that people took into account when returning to a brand. These figures are not to be taken lightly- customers want to see brands engaging with green ecommerce.
The modern consumer consciously chooses brands that align with their personal values. Customers can tell that if a brand cares about the planet, it cares about their customers. Gen Z consumers are hugely fueled by environmental awareness, so green commerce opens the doors to this whole demographic. Identifying with the customers on this emotional level then, hugely improves customer experience and loyalty.
The result of all of this? Hugely increased customer loyalty and a whole new range of customers. Not only do we have a responsibility to earth, but going green is a clever business decision that hugely improves brand image and boosts sales. It really is a win-win situation.
Since so many businesses are now taking the sustainability pledge and including information about this on their website, it’s reaching the point that if your business has no mention of this at all, it could cause you to be perceived in a less positive light.
How You Can Go Green
So by now it might seem clear that going green is the way forward. So what are the next steps now? The first thing to do is to set some goals. Use a life-cycle analysis approach to see which are the biggest or most concerning environmental impacts of your company specifically. Then create your most inspiring or meaningful goals in order to reverse or reduce your impact. Create a clear time horizon to achieve this by, and then start working to achieve this.
You don’t need to make these goals big, bold or unrealistic. Start small and give yourself long enough to succeed. For example; cut emissions per product sold in half in 5 years, donate X amount to environmental causes per year, source only recycled materials within 5 years, etc. These are steps to be made over time, but will have a huge impact on your business and the planet.
Whichever strategy you choose, it’s important that it is relatable and relevant to your business. Make sure it’s something that the business itself is passionate about and committed to, as this is what the customers will feel.
We will now take a look at some elements of ecommerce to consider when planning your go-green strategy:
Supply Chain
The supply chain is one of the most problematic areas of ecommerce in terms of environmental impact. When considering the supply chain a business should ask themselves how green is their supply chain and suppliers? What are the production methods and materials? What are the transport methods and distances?
Shipping is responsible for a huge part of greenhouse gas emissions, especially when products are flown overseas. Finding local suppliers is a great way to reduce impact to reduce fuel consumption. There are eco-friendly green couriers who work on this so you don’t have to, and setting preferences to products distributed locally rather than globally will have a great impact.
Letting people collect their products from localized collection centers is environmentally beneficial and convenient for customers and merchants. This order management helps the environment as the delivery truck doesn’t need to make extra movement around the region saving fuel, but at the same time it means that customers don’t have to be home to expect a package. They can go and pick up their order from a convenient location at a time that suits them- knowing that it’s safely stored. Amazon uses localized delivery pickup lockers for this reason.
Packaging
Packaging is another huge culprit in terms of creating unnecessary waste. However there are many steps that can be taken to counter this. Firstly, plastic usage should be reduced to an absolute minimum- if not removed completely. Single use plastics are a huge contributor to waste, pollution and climate change. If items are ordered together, individual items should not be packaged separately.
Instead of plastic, one can use eco-friendly packaging. Green packaging can be made of cornstarch, mushroom, seaweed, bamboo or other recycled materials. Some are more biodegradable than others, and research can be done into which ones are most effective. Customers respond well to green packaging, as it looks and feels novel to them, which improves the customer experience as well as reducing plastic in landfills.
Another thing to consider is the size of packages that are sent; using a one-size-fits-all system for packaging is not environmentally friendly. If an item is small, only use a small package. When it comes to packaging it is possible to test out different options until you find the one that suits your business and eco-needs the best.
Whilst it is true that using eco-friendly packaging increases the costs of packaging overall, most customers would feel comfortable paying for more sustainable packaging as it aligns with their values. It is therefore worth the investment, as long as the communication surrounding the price increase is clear.
Returns
Offering free returns has become commonplace since companies like Asos implemented this system, however from an ecological perspective, this is very damaging. Explaining to customers that you are committed to sustainability and returns are damaging this incentive can help them reconsider whether they really need to return things or not.
Making sure that people really know what they are buying is also important, so making sure that product descriptions are fully detailed means that less returns will be needed. For clothes, an option can be to add extra model photos, measurements or even an interactive 3D preview. All of these steps going the extra mile can reduce the need for returns, meaning happier customers and less plastic waste.
It goes without saying that simply destroying returns such as Amazon has been known to do, is not an environmentally beneficial practice. Instead, we should be aiming for products that aren’t returned even after long periods of time.
A way to do this is to improve the durability of products, putting them through use tests before they go live. Paying attention to delicate elements of the products can also help, and improve the repairability potential. Creating repair tutorials on your site, or allowing replacement parts orders is a great way of ensuring that products achieve their full use potential.
Inventory Management
Managing inventory is obviously a very complex element of any eCommerce business, as several sizes or colors of each SKU are often required. Finding the perfect inventory balance is an art, but from an ecological perspective, this definitely holds significance. Finding the right balance between not overstocking but not running out of inventory is key here, and it can be easy to overlook sustainability when it comes to this management.
An inventory strategy that can help from an eco perspective is attempting to leave a season or time period with as little excess inventory as possible. This means not offering as many SKUs, as this makes things harder to sell, and also takes up more space in the warehouse which takes energy and resources to contain. Being more precise with the SKUs you actually need can also help; any that might be a cash or operational drain are not helping your business or the environment. In this case it helps to really know what will sell, or what won’t.
Another strategy that could be used here is producing products on demand as they are ordered. This strategy helps manage cash and environmental impact, as well as reducing your warehouse footprint. This means there will be no excess stock at the end of the season, which is another great benefit. Yes, this might be slightly more expensive to run, but customers might be happy to shoulder this cost with the correct communication.
Offsets for Unavoidable Damage
There will always be a certain level of environmental damage done by a business that involves shipping, but a way to combat this and show that you care is by donating to carbon offsetting programs that reduce the amount of carbon in the atmosphere. There are companies that calculate the footprint of each order, and then counter this. Businesses can either pay offsets on behalf of customers, or customers can be offered the option to offset at checkout, which is usually 1-2% of their order value. Many customers will be happy to invest in this, and carbon neutral shipping is a big selling point for your business.
Greener Online Tools
Eco-tech is constantly flourishing just as everything else in the hi-tech industry is. There are plenty of green web hosts that are run by renewable energy credits (such as wind or solar energy) to offset energy used by the website itself. These hosts actually end up being carbon neutral or negative, and it involves very little work by your business. These web hosts already exist, you just need to plug into them and let them do their magic.
There are some websites which plant trees for you, and many of these green hosts will transfer your website for free. Switching to a green host, or using an online tool to calculate your carbon footprint and work towards achieving this is more than accessible.
Small Things Add Up
Just as in our personal lives, as a business there are so many small steps that can be taken that all add up. The effects of physical offices of many ecommerce companies should not be overlooked. ‘Reduce, Reuse and Recycle’ is at the heart of most green initiatives and it stays relevant here.
Making sure that lights and computers are switched off at the end of the day can be really important. Increasing recycling in the office can be a great green initiative, or using LED light bulbs rather than normal energy bulbs- these run longer so are greener and most cost-effective. Encouraging working from home also helps environmentally, as it reduces travel to and from work, meetings that can be done online, and the need to heat or cool large offices. When we all do our individual part, the effects add up.
Supporting
A simple thing that businesses can do is pledge their support to environmental organizations and charities. Choosing a percentage of the annual profit to donate, can have a huge difference. This doesn’t need to be a big percentage, or one that will necessarily affect the overall business profit at all, but again, if many businesses commit to this then the impact can start to be significant. In many ways, the endorsement of the company can have a bigger impact on the campaign than the actual financial investment; spreading awareness is huge in terms of environmental causes.
The Importance Of Communication
The importance of communication is a key issue to be stressed when making green changes to your business plan. If you simply switch to more expensive eco-packaging, for example, without informing the customers about what’s happening and simply charging more, this will not have a positive effect on brand image. However, when effectively communicated with customers, brand image can be improved by your businesses direct involvement with sustainability.
Customers should be kept up to date with what changes you’re making, why it’s important and what it means to the businesses. The brand image can be tweaked around sustainability practices. This doesn’t mean changing the core elements, it just means adding extra information about what the brand is doing to try to go greener and why it matters. Any steps taken by the company should be shared, and statistics can also be shared about reductive measures taken compared to competitors. Another method is being rated by a sustainability index company to show the effects of the companies’ effort.
When sustainability measures are taken place, marketing efforts should boldly reflect this. These can be from banners on homepage, social media stories, Q&As and posts, blogs and other content with explanations; basically information at every step of the way. Especially if prices are being increased, or other changes are being made, keeping the customers in the loop is vital.
Giving Customers The Choice
A final important thing to consider is that many of these changes can be offered to customers as a choice, and something they can opt into. Many customers are looking to make eco-changes in their lives, so they may be very happy to choose the slightly more expensive, but more environmentally friendly option. Giving them this choice can please your target audience and will increase lifetime customer potential.
Other ways of doing this are by introducing loyalty systems for those who choose greener options, or offer other discounts, free samples or free shipping to people who go greener. Encouraging bulk shopping, for example, means less packages, less delivery, greater AOV for the merchant and also convenience for the customers.
Conclusion
Investing in green commerce and turning your company green isn’t something that happens overnight. It involves a lot of small steps, and each company is within their rights to take their time to achieve goals. Creating a roadmap of realistic steps that the company aims to achieve within a certain time frame is a great way to start, without heaping on the pressure. All of these steps will give the company a long term payback, as brand image and loyalty will undoubtedly be boosted by this as we move forwards into 2022.
As we move towards ‘slow commerce’ where people are becoming proud and involved in their decisions, the impetus isn’t on ‘cheap and fast’ anymore, it’s on consumer decisions being thoughtful and value aligned. It is very likely that green initiatives may soon be compulsory for all, so being ahead of the curve and taking your business in this direction before it’s necessary can be a really positive move.
So make a sustainability pledge. Loudly state your intentions and goals, celebrate changes as they are made and inform customers what is coming up next. Boost your brand image as you ensure customers that you care about them and their values, as well as saving the planet. Watch your brand image boost, and customers keep on returning to a brand they love evolving with the needs of the current time.