While the issue of sustainability in every aspect of human life has preoccupied us for decades, the outbreak of the COVID-19 pandemic drew even more attention to this ever-growing crisis. In this sense, now, more than ever, consumers are more likely to ask retailers for sustainable options and the use of renewable energy, or even more sustainable methods of transport, and more likely to look for sustainable ecommerce businesses. While the top five countries with the highest share of renewable energy are in Europe, the rest of the world is doing its best to optimize every aspect of an online business in terms of sustainability, trying to maximize revenue while minimizing environmental impact.
This article explores the impact that ecommerce has on the environment. In future content pieces, we’ll dive into how each step of an ecommerce operation can focus on sustainability.
Sustainability means meeting one’s needs without compromising the ability of future generations to meet theirs. In addition to natural resources, we also need social and economic resources, and the defense of those is what sustainability stands up for. Sustainability is not just environmentalism: embedded in most definitions of sustainability can be found concerns for social equity and economic development.
In ecommerce, the concept of sustainability can range from business models to packaging products and its role will become increasingly important in the coming years. Environmental and sustainability awareness has long been a trend in ecommerce. In a bid to successfully address increasing demands for sustainability from their consumers, online retailers have been pondering for some time now on topics like corporate social responsibility and eco-friendly approaches in the supply chain.
When it comes to ecommerce the first thought that comes to mind is online shopping. The growth of ecommerce can be observed with the preference of almost every demographic area and age group to use different e-stores of their own choices, and it was witnessed when the concept of “think globally” emerged. It actually helped in bringing customers to one platform in the form of an e-store which can have any product of their choice in a variety of e-stores.
This is in reality hard to find in a physical store. Nowadays people who are actual consumers and buyers need everything available in one space due to limited time. Furthermore, it helps users to provide the best to their customers on a single platform.
In any ecommerce operation, there’s the need to fulfil the order somehow – be it by allowing customers to pick up the order somewhere or, more commonly, delivering it in their houses. The latter one leads to what we call the first-mile and last-mile deliveries, which have a huge impact when we’re talking about sustainability.
The first mile of the transport process involves the initiation of freight transport using the initial (first in order) means of transport. The last mile, on the other hand, is related to freight transport over the last section of the route using the last (in order) means of transport, when the order is literally delivered to the customer’s address. The problem of first- and last-mile logistics is broadly discussed in the source literature.
In urban logistics, the last-mile delivery from the warehouse to the consumer’s home has become more and more challenging with the continuous growth of ecommerce. It requires elaborate planning and scheduling to minimize the global traveling cost but often results in unattended delivery as most consumers are away from home, says a study done by the University of Singapore in 2016.
In the entire transportation process, the opportunities for process optimization aim to minimise the number of transfers and adjust the trajectory of the goods shipped over the first and the last mile of delivery. These sections of the route often force high frequency of transfers of particular means of transport with a relatively low load capacity (due to the fact that goods are very often delivered to highly urbanised areas), and combining these factors is the main task of logistics operators.
Imagine a business running in a capacity where there is no negative externality on the local as well as global environment, the community, or the economy – this is what green ecommerce is all about, guaranteeing that companies operate that way. It will also engage in forward-thinking activities for environmental factors and activities affecting human rights. Companies nowadays are vigorously adding green practices and sustainability proposals into their business practices not just to offset their carbon footprint, but keeping down costs too.
Some of those practices are the eco-friendly packaging and shipping, which can help their bottom line and make sure goods are safe in transit without lingering in landfills for thousands of years to come. Not only guaranteeing sustainability on the delivery, but also offering more sustainable products, giving consumers the opportunity to buy ecological and fair products in ecommerce also.
The environment benefits from the sustainable use of resources, the exploitation of workers in low-cost producer countries decreases, and you, as a retailer, remain competitive. With 35% of all consumers willing to spend more on green products, the demand for environmentally-friendly products continues to grow.
The strongest trends in the packaging industry all revolve around a circular economy, which refers to a model in which economic growth does not go hand in hand with the exploitation and consumption of natural, non-renewable resources. The aim of a circular economy is the resource-efficient and sustainable use of natural resources, their reuse and recycling within a circulatory system and the prevention of waste.
The good news is the world’s governments are passing regulations faster than usual, including regulations to increase recycling rates and recycled content and laws to reduce single-use plastics. There are a few sacred ways of lowering the waste footprint of the average individual buying online. Among those, one can count: designing materials to be reused and recycled, replacing plastic with bioplastic, that is easier to be processed and transformed into something else, reduce and remove materials altogether or settle for packaging that is formed of one material only, like only paper or plastic but not both at the same time.
While the customer is part of the change process in many of the above-mentioned initiatives, a very important role in the eco-friendlier game is played by brands communicating and educating their customers on how to responsibly use and dispose of the packaging. This positive development is luckily on the rise.
In the economy, people are aware of the importance of ecommerce, but they need lots of awareness with respect to the sustainability issue regarding ecommerce. Businesses are also oriented towards their needs and demands to be fulfilled and rarely pay attention to the environmental sustainability issue of the ecommerce.
Overall, there are more chances of an increase in ecommerce demand because of the added advantages connected to the customers’ convenience and digital play of shopping. However, businesses using ecommerce have to work hard to ensure saving, restoring and preserving the ecosystem.
Sustainability of green ecommerce encompasses the operations of the entire business: every process, every activity, and every function. A business will not be able to implement one or a few changes and proclaim that the business has achieved sustainability. A business should be prepared to apply the aforementioned critical self-analysis, honesty, innovation, and risk across all processes, all activities, and every function of the business.
The CCX Company, in collaboration with VTEX Commerce Cloud, expresses gratitude for having had the opportunity to enhance its understanding of the advantages, trends, and other elements addressed in the current topic. This article was jointly developed and is brought to you by the VTEX Commerce Cloud team.
