Tips for Growing a Sustainable eCommerce Business
by Eloise Tobler
More consumers than ever before are looking to buy from eCommerce brands that are committed to sustainability. A recent study found that more than 73 per cent of Millenials were prepared to pay more for sustainable products and services. The numbers are similar for their Generation Z peers. For eCommerce brands, committing to sustainable practices isn’t simply about catering to these demographics. As markets become more saturated, demonstrating your sustainability credentials can set you apart from the competition and add value to your brand.
In terms of carbon emissions, the eCommerce sector is one of the word-offending industries. Although online sales tend to produce fewer emissions than in-store shopping, the impact on the environment is considerable. Packaging alone accounts for around 45 per cent of all eCommerce emissions. Meanwhile, returns contribute to about a quarter of all eCommerce emissions.
Thankfully, more brands are rethinking their carbon footprint and making sweeping changes behind the scenes to ensure a greener future. Below, we explore what it takes to grow a sustainable eCommerce brand and how your efforts can be a force for change.
There’s an Appetite for Sustainable eCommerce
Despite a pressing need for a paradigm shift in manufacturing and sales processes, many brands have been resistant to change. However, customers are becoming acutely aware of the impact their shopping habits have on the environment. More than half of consumers are prepared to pay more for sustainable products. Even more consumers rate sustainability as a determining factor when making a purchase.
Folding sustainability into your business model as a core philosophy lets your market know that you share their values. It’s particularly important if you’re looking to capitalise on the spending power of the younger generation. Establishing yourself as a sustainable brand gives you an instant advantage over businesses hesitant to make a change.
Spending Power of Younger Consumers
The spending power of the younger generation is considerable. The combined spending power of those falling into the Millennial age bracket is approximately $2.5 trillion. Teenagers within the Generation Z demographic have a combined $34 billion to spend annually.
There’s a ripe market here but advertising your sustainable business model isn’t simply about making short-term gains. These demographics represent long-term revenues. Once you’ve secured their loyalty, they’ll continue spending with you, provided you maintain your sustainability commitments.
However, you mustn’t simply view these groups as low-hanging fruit when marketing your green credentials. If you fall back on your promises or actively mislead the market, be prepared to face considerable backlash. Younger generations are far more likely to boycott a once-beloved brand if you’re not keeping your end of the bargain. In the age of social media and cancel culture, one disgruntled consumer can quickly rally a cause against you.
Give Your Brand a Competitive Edge
Smaller brands first entering the market may find it easy to build a business model on sustainability. However, even established brands can undergo retroactive changes to different areas of a business.
There’s no standardized approach to sustainable business practices, so focus on the ones that make the most sense to you. In the eCommerce industry, you’re not short of choices. If you can find sustainable products from more ethical suppliers, do so. A more powerful way of embracing change is to look at other areas of the supply chain. Investing in recyclable packaging can have a major impact on your carbon emissions.
Meanwhile, targeting your return rate can also diminish your impact on the environment. Ultimately, you’ll always find yourself dealing with returned products from consumers. However, if the reason behind the return is a sizing issue or general dissatisfaction with the item, you can think about enriching product information on your eCommerce platform.
Easy Ways to Embrace Sustainability
To transform a brand into a wholly sustainable one, there’s no such thing as a quick fix. However, some initiatives are easier to apply than others. Below, we explore some of the more practical options available to brands eager to embrace sustainability.
1. Rethink Manufacturing Processes
If you’re producing your open products, you have greater control over things like energy consumption and raw materials. Make sure you’re being sustainable across the board and actively working to eliminate waste.
Brands that source products from third-party suppliers still have a responsibility to sustainability. Be confident that you’re buying from ethical sources, with fair labor practices, safe working conditions, and sustainable manufacturing processes as standard.
2. Adopt a Paperless Approach
Just about every business sector is guilty of generating mountains of paper waste. However, going paperless is one of the easiest things you can do to ensure your operation is as eco-friendly as possible.
Ditch paper receipts and make the switch to digital ones instead. Nowadays, even major high street brands use email confirmations as proof of purchase. These email receipts can also be used to generate further sales by promoting other products or including discount codes for future purchases.
3. Investigate the Resale Market
Every year, millions of second-hand items end up in landfills. However, the secondhand retail market is gaining traction, with major retailers like IKEA offering buy back and resell services. Becoming part of the circular economy isn’t just a surefire way of reducing your carbon footprint, it also provides lucrative revenue streams.
Smaller brands may find the prospect of establishing a circular hub daunting. However, it’s easy to start small and build upon your successes. Even if you’re relying on logistics services to source second-hand stock, no carbon emissions will have been produced to manufacture it. If your buyback and resale initiative prove fruitful, you can start investigating all-electric courier services or drop-off points to curb your emissions further.
4. Offer Product Rentals
If your focus is fashion, the product rental model may be something to consider. Fast fashion is a big issue in the sphere of sustainability. In the UK alone, more than 30,000 tones of clothes are thrown away every year. Only a fraction of unwanted garments are ever recycled.
Renting garments isn’t for everyone, but there’s still an appetite for subscription services offering cut-price access to luxury brands. Renting a garment results in far less water usage than if a piece of clothing was to be produced from scratch. Furthermore, general energy consumption and carbon emissions are also significantly reduced.
5. Switch to Clean Energy
This is crucial if you produce your own products or maintain a large manufacturing hub. In the current climate, many businesses are worried about keeping their energy costs in check, but clean energy solutions are the only way to go if sustainability is your goal.
Thankfully, many green switches can help you limit your overall consumption. LED bulbs use far less energy than traditional ones. Meanwhile, the initial outlay involved with purchasing energy-efficient appliances quickly translates to savings on your monthly bills.
You can also take a more drastic stance on energy consumption. Do you operate a small fleet of vehicles? Focus on replacing cars with combustible engines with all-electric alternatives. Looking to slash your monthly energy expenditure further? It might be worth investigating the cost of solar panels and heat pumps.
6. Carbon Neutral Shipping
If your business is a small one, there’s a good chance in-house logistics aren’t a core part of your operation. However, this doesn’t need to be a barrier to [providing carbon neutral delivery options to your customers.
By partnering with carbon-neutral couriers and logistics services, you can provide customers with an eco-friendly shipping option. Admittedly, these services come at a premium, but they can be passed to the customer. Remember, if a customer is actively looking for these services, they’ll be prepared to pay more for them.
7. Take Your Recycling Program to the Next Level
When we talk about overhauling your recycling program, we’re not talking about separating paper and plastic. Rather, we’re focusing on recycling initiatives that permeate every area of your business.
Many sustainable businesses provide their customers with the option to recycle, or repair used goods. These returned goods can then be broken down and repurposed for new products or repaired and donated to charities.
If you’re struggling to ignite interest, think about incentivizing the initiative. Offering customers a small discount on their next purchase when they donate is a surefire way of generating engagement. This kind of activity can also be used to promote your sustainable enterprise. Think about creating content for your social media platforms that spotlights your recycling programs in action.
Start Thinking Sustainably Today
It’s not just the eCommerce sector that needs to take stock of sustainability. Energy consumption, material waste, and ethical business practices are things every industry needs to embrace in the future.
Although a sustainable business model will certainly set you apart from the competition, any culture change needs to be a long-term commitment. Achieving net-zero carbon emissions isn’t merely a pipe dream, it’s a pressing objective that most developed countries are striving towards.
If you’re a smaller eCommerce brand looking to grow sustainably, make sure you’ve set the groundwork for a green future. Consider your everyday energy consumption and carbon emissions. These can often be reined in with a switch of energy suppliers or by investing in affordable technologies. Larger operations will almost definitely need to rethink their manufacturing processes. If you’re relying on third-party vendors to supply your products, you must ensure they’re adhering to green practices.
Investing in sustainable practices in the short term can also benefit you financially in the long run. More importantly, it secures loyalty from an ever-growing market with an appetite for sustainable brands and products.