On the surface eCommerce or online shopping can seem to be a solution to mitigate negative sustainability issues. However the most unsustainable part of online shopping is by far the most important part of the modern buying process. Of course, supply chain and logistics are the glue that make eCommerce even a possibility. However, the modern appetite for instant delivery of products, cheaper goods and even cheaper packaging is accelerating. This does not bode well for the environment at large and many companies are starting to take concrete action. Beyond the obvious environmental benefits, there is a sound business case for sustainability in eCommerce. Since the pandemic, customers are more particular about company value and practices. Sustainability is universally popular with customers and companies and eCommerce is awake to it.
Companies are aware customers are increasingly weighting price and sustainability in their buying decisions. According to the US Cotton Trust Protocol, 44% of businesses say customers demand for sustainability has increased with 42% indicating customers have become outspoken about these demands since the pandemic. About half of them believe they will pay the ultimate consequence and customers will take their money elsewhere. Gen Z customers tend more to interact with brands on social media based on values. Almost 90% will purchase from socially and environmentally conscious brands, so there is a way for smaller brands to distinguish.
Sustainability has become a major factor in eCommerce competition. Customers are simply being more demanding of the brands they patronize according to businesses. eCommerce is the main shopping option for many. As much as 40% of British and American customers plan to shop online exclusively going forward. Customers are more attentive to backend sustainability initiatives like shipping, product packages, sourcing of materials amongst other things. This is set be a big part of the customer experience and strengthening brand loyalty.
Transparency & Traceability
Transparency and traceability is the best way for customers to validate or affirm the sustainability values of eCommerce shops. US Cotton Trust Protocol finds that about 60% of companies are more transparent about environmental reporting. A similar percentage become more vigilant about sustainability sourcing and partnering with third party agencies to implement standards. This has become more common for digital companies especially for online fashion retailers.
These standards are also becoming more set for packaging goods. More companies are compelled by customers to abide by these standards. The Flexible Packaging Association (FBA) is one of such organizations trying to create standards and transparency in eCommerce. They recently released a report to this effect that “provides a holistic view of the sustainability benefits that flexible packaging offers eCommerce”. This kind of voluntary oversight and transparency is another way for businesses to distinguish themselves from lazier competitors online.
Notably, across countries the effects of the pandemic has impacted sustainability efforts differently. 6 in 10 European eCommerce businesses indicate COVID has increased their sustainability initiatives. In Asia, it is more than 4 in 10 businesses making overt sustainability investment in their eCommerce. Unfortunately in North American, with its significant consumer spending power only a quarter of businesses are committing to more sustainability initiatives. However, this is the general trajectory of global eCommerce. Adapting is no longer optional.