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Sustainable e-commerce? For many, it still sounds like an oxymoron.
Let’s face it: E-commerce businesses have a pretty bad reputation for causing quick purchases, excessive packaging, and greenhouse gas emissions - all of which have a negative impact on our environment.
But, there’s hope. Sustainability has become today’s buzzword, so much so that we tend to forget that “sustainable growth” should be the ultimate goal for any business out there.
The times are (slowly, but steadily) changing. In an interview for UPM.com, Simon Platts, Responsible Sourcing Director at ASOS, says:
— With greater attention on the people who make our clothes and the conditions within which they work, to an increasing understanding of the environmental impacts our sector has, businesses must take bold and decisive steps to find solutions. There has never been a greater imperative to act.
Reducing the environmental impact, meeting customers’ expectations, driving conscious consumerism - online retailers have the opportunity to do it all. It’s now up to them to shape the future of sustainable e-commerce and support consumers in making informed purchase decisions.
Sounds like something worth the effort? Here’s how e-commerce brands can become more sustainable, and why it’s important for everyone involved.
How to become a more sustainable e-commerce business
A Gothenburg-based denim brand Nudie Jeans, an Ecuadorian luxury chocolate company To'ak Chocolate, a British streetwear brand Emperors & Vagabonds. What do all of these have in common?
Yes, you got that right: they are all prime examples of sustainable e-commerce brands.
The good thing is: You don’t necessarily have to revolutionize the whole business to become climate-conscious. When transitioning to more sustainable business practices, every little change counts.
“Audit” your business
Understanding the environmental impact of your business is the first step toward adopting more ethical and sustainable practices. Start by making sure you know exactly where and how your products are created:
- How environmentally friendly all the materials and components are (including packaging)
- How safe and healthy working conditions are for everyone involved
- How far your products have to travel (and in what circumstances - are there any special transport requirements?)
- What carriers do you work with (can you use local carriers? Do they offer any carbon-neutral delivery options?)
- Do all of your business partners take environmental sustainability seriously?
Knowing that you can take specific actions to reduce your impact: choose more sustainable packaging, work with local carriers to carbon-neutral delivery options, look for more climate-conscious business partners, and so forth. Keep reading to find more examples of sustainable e-commerce business practices.
Pay attention to packaging waste
Did you know that inefficient packaging drives unnecessary transportation emissions, and a huge waste of materials on top of that? While it seems that many online retailers have started investing in more eco-friendly materials, the choice of sustainable packaging still leaves much to be desired.
If you’re looking for a solution, think of the good old “reduce, reuse, recycle”.
— If you just reduce unnecessary packaging, you could reduce the number of trucks, long-haul and last-mile deliveries significantly, since fewer trucks could transport the same amount of goods, logistics consultant Martin Jungerts says in an interview with Columbus.
Designing your eco-friendly packaging with a different purpose in mind, using recyclable packaging materials, and giving consumers the ability to reuse or return the delivery packaging whenever possible are just a few solutions that help to reduce the environmental impact of your parcels.
Fortunately, well-known e-commerce brands like ASOS, TOMS, and Patagonia have already jumped on the sustainable delivery trend, along with custom packaging companies like Packhelp and RePack, and innovative carriers such as InPost.
Label and highlight sustainable products
With great power comes great responsibility. Keep in mind that it’s only possible for consumers to shop sustainably if you inform them about the environmental impact of their purchases, and feature sustainable products in your store.
Solution? Labeling and highlighting eco-friendly options — just like NA-KD does it. In the online store, customers can spot several different symbols, badges, and labels, such as ‘More sustainable’ (indicating the use of sustainable materials), or ‘Free climate compensated shipping’ that contributes to a greener delivery promise.
According to Robert Wallis, UX & Visual Designer at Columbus, you could also consider using search to make sustainable products more visible to customers.
— For example, when they are searching for ‘hand cream’, you can choose to show relevant products that are made of organic materials on the top of the list, which helps to nudge customers in making an ecological purchase, he explains.
Including more eco-friendly categories and filters as a part of your store’s UX can also make browsing easier for more climate-conscious consumers. Many sustainable e-commerce brands like NAGO make eco-friendly products a top-level category in their store.
Rethink your e-commerce delivery strategy
Now that you have the products, packaging, and UX of your online store covered, it’s time to tackle an equally important e-commerce sustainability challenge: delivery strategy.
Research shows that many consumers still seem unwilling to pay extra for climate-neutral deliveries, and prioritize price and convenience more than environmental sustainability. But, this might be because there are many different options to choose from, which are not always visible and well-explained.
Up till now, the topic of sustainable delivery options and their importance hasn’t been stressed enough by e-retailers. Many e-commerce stores that in fact offer climate-neutral delivery options don’t provide much information about them, apart from a simple logo, label, or badge.
Yet again, this comes down to keeping consumers informed about the options available and gently nudging them to make better choices.
To ship for free, or not, that is the question
On top of that, there’s also the notorious “free shipping” that can cause excessive and, often, unnecessary shopping — among other things. Is it true that free delivery is the best thing for all e-commerce companies?
As Anders Ekman, Co-Founder and COO at Ingrid puts it, there is a sweet spot where paying for delivery might mean selling fewer products, but still earning more. He explains:
— It was an idea that one of Ingrid's customers experimented with. They began to charge 10 SEK more for the delivery. The result? The conversion decreased by 2.5% but the value of an average shopping cart increased by 4.2%. At the end of the day, revenue from deliveries alone increased by 11% and the profit margin increased by 5.5%.
Don’t be afraid to start charging your customers and experiment with different prices. It’s likely to lead to a reduced number of orders, but higher revenue in the process and fewer unnecessary purchases from online shoppers. Sustainable, isn't it?
The key is to offer choice, since the greenest delivery option will always depend on the context. Martin Jungerts continues in his interview:
— Home delivery in cities could be the most eco-friendly since you can provide them by bicycle or electric vehicles. At the same time, it could be the worst option in the countryside if you are delivering one package over a long distance. On the other hand, pick-up-at-store could be efficient, if the store is close to the customer’s workplace, but inefficient if the customer needs to take his or her car just to pick up the order.
Consolidating deliveries as a sustainable delivery measure
No matter the delivery option, what helps in making the whole process more sustainable is consolidating orders in one delivery or one vehicle. This way, you can create fewer emissions per purchased product.
That’s one of the reasons why parcel lockers and pick-up points are in high demand right now, and these get even more “eco-friendly” with carrier companies sharing the existing infrastructure.
An example? iBoxen placed the first parcel boxes in Stockholm in March 2021. In November, the network of iBoxes began to be used by Airmee, one of Sweden's fastest-growing logistics startups, to further meet consumers' high demands for fast and flexible deliveries.
Speaking of using the existing infrastructure, there’s also a pretty green alternative that we seem to forget about: good old mailbox delivery. For e-commerce brands that sell smaller items, this option in particular can be sustainable, low-cost, and convenient for online shoppers.
Featuring eco-friendly deliveries
With so many different options to choose from, though, it’s important to present them right on your checkout page. With SaaS delivery platforms like Ingrid, you’re able to integrate with carriers that offer carbon-neutral deliveries (DHL GoGreen, GLS ThinkGreen, or local carriers like Swedish Instabox), highlight and pre-select more sustainable delivery alternatives, and test which convert better.
Do you want to have a similar delivery checkout in your store? Book a demo to see how Ingrid can fit into your e-commerce business.
Speaking of testing different eco-friendly shipping options, though, there’s one more solution to experiment with: no-rush deliveries. It works well, especially with no time-sensitive orders - the delivery promise becomes greener, as you can wait for more orders to be consolidated and delivered to the same area.
Consider sending orders from your brick-and-mortars
If you own physical stores, you can actually use them to your advantage, reduce your carbon footprint, and send out orders even faster with store-to-door solutions. A win-win situation?
According to a report from Accenture, the last-mile supply chain made possible by local fulfillment centers could lower last-mile emissions by 17–26% by 2025. And that’s not the only benefit for the environment.
For retailers who own local stores and sell online, even higher climate effect can come from reducing overproduction, waste, and the need for aggressive sales and discounts.
Martin Jungerts says:
— By enabling store-to-door delivery, online retailers can suddenly make their whole total inventory available for the total market. Sure, they should ship locally whenever possible to reduce last-mile emissions, but by being able to also ship certain products from a local store to a customer across the country, they will also match supply and demand much better, thus reducing the need for both local and central safety stocks across the full assortment. I think this is a great example of how smart logistics can be used to make companies more sustainable and profitable.
At Ingrid, we support merchants in using their brick-and-mortar stores as fulfillment centers, both for last-mile deliveries and as pick-up points across the globe. If you’re curious to see how it works in practice, one of the brands that excelled at making the delivery promise greener and faster with Ingrid In-store solution is Nudie Jeans.
Currently, local Nudie Jeans stores fulfill 30% of web orders in the UK, Australia, Germany, the Netherlands, and Sweden, and there are more markets to come.
By connecting the company's Point of Sales, e-commerce platform, enterprise planning system (ERP), and Ingrid's In-store product into a single omni solution, Nudie Jeans has been able to leverage its brick-and-mortar stores into local warehouses and fulfill web orders directly store-to-door.
Not only has it shortened the delivery time, but also contributed to lowering greenhouse emissions through more sustainable delivery solutions for every purchase made. If that sounds like something you want to achieve, have a chat with our team.
Reduce product returns
Deliveries aside, product returns are seen as one of the most problematic aspects of sustainable e-commerce today - and rightly so. Just like the free shipping promise, they often encourage “unnecessary” purchases and contribute to carbon emissions.
There are ways to reduce product returns, though, especially in the fashion industry where we tend to order and try out multiple sizes or learn the hard way that the items just look better in photos.
The quickest solution is to start charging for returns, but it doesn’t mean it’s the easiest one. To minimize the chances of your products being returned, take a closer look at your product pages first:
- Are there high-quality images that show the product from a variety of angles?
- Can you show the product “in use” - e.g. worn by a model, featured in an edited video?
- Is it possible to grasp the scale of the product?
- Are the exact measurements provided?
- Can you share more details about the materials and components, and how to take care of them?
- Can you feature customer reviews and photos?
All these little things can help your customers make more informed decisions and, hopefully, reduce product returns.
…Or redefine e-commerce returns
Even though detailed product pages and the UX of your online store can support consumers in making more informed choices, they won’t help you get rid of product returns completely.
— E-commerce returns are inevitable, and in the fashion industry, the average return rate can be over 35% which is more than a third of the store's sales, Linus Robertsson, Co-founder of Turnr, says. Why are businesses not using the inventory they have in motion by sending the package directly to the end destination instead of waiting up to 4-6 weeks and often a +2,000 KM long return journey - that's a question that I believe many are asking nowadays. Optimizing the returns is a must for sustainable e-commerce.
Luckily, services like Turnr are here to redefine e-commerce returns. Instead of transporting the returned order back to your warehouse, the store can sell it and redirect it to a new customer next door. This way, the store can invite its customers to reduce the carbon footprint connected to their purchases - at the same time optimize operational efficiency and lower return costs.
— Optimizing your returns can affect the store's whole emission chain. With Turnr, the store holds stock in motion instead of in a large warehouse; this means we can reduce the turnover time of returns from 4-6 weeks to a couple of days. That alone helps the store to reduce overproduction due to lack of stock, Linus Robertsson adds.
Give your products a second life
Another way to become a more sustainable e-commerce brand is to “prolong” the life of your products.
Here’s when resale marketplaces and peer-to-peer networks for buying and selling used products come to the rescue. They are in line with what’s called a circular economy - giving products a second life by encouraging them to be passed on to a new owner.
The circular economy holds great potential, and you can jump on this trend by providing your customers with opportunities to resell and purchase “recycled” products from your store. Patagonia Worn Wear and NA-KD Circle are great examples of branded marketplaces meant for second-hand products.
NA-KD Circle doesn’t only help customers to save money and give a second life to their clothes, but also reduce their fashion footprint - the team did some research and found out that Circle products save 2.6 kg CO2 on average compared to new items.
Show your support
With so many alternatives to choose from, the least you can do to reduce your environmental impact is to support a good cause. Especially since it gets easier than ever with software integrations like Greenspark.
The software lets you choose from offsetting carbon emissions, salvaging plastic waste, and planting trees to show your support for sustainable e-commerce. You can display widgets, badges, and cart messages to inform your customers about the initiative, and create unique combinations that maximize their engagement and reduce your negative impact on the environment.
Lenny Leemann, Co-Founder & CEO, talks about the company's mission:
— Greenspark helps e-commerce brands that care about sustainability by putting their impact strategy on autopilot and creating deeper connections with their customers. Our badges and widgets show customers what impact they will have at point of conversion, while our public profile allows brands to succinctly share the impact they are having. Finally, the Customer Impact Wallet closes the loop by helping customers track their impact and learn more about what steps a brand is taking towards sustainability post-purchase.
Research shows that customers are more likely to act if they can see the positive effects of their behavior. By tying their purchases to Earth-positive projects, you can not only give your customers an additional incentive to buy from you but also rally them around your mission to become a more sustainable e-commerce store.
Why sustainable commerce matters
The idea that “goods and services should be produced in ways that do not use resources that cannot be replaced and that do not damage the environment” seems pretty straightforward.
But, the harsh truth is that adopting more sustainable practices can be complex and expensive - two words that don’t necessarily spark joy in a business setting.
Let’s talk benefits, then.
Sustainable e-commerce means future-proofing your business. With climate concerns on the rise, legislation is likely to support climate-conscious businesses, sooner or later. When that happens, online retailers who are already working or reducing their environmental impact won’t have such a tough time adjusting to new rules and regulations.
Even though environmental sustainability is not a priority of all consumers (yet), there are clear signs that they’re increasingly demanding more eco-friendly products and delivery alternatives. Just take a look at the recent Sustainable Brand Index report, E-commerce Delivery Compass, or Shopify's Future of Commerce.
“Companies should drive the change instead of waiting for their customers to start demanding it. That’s such a heavy burden to place on consumers, which is why e-commerce businesses and solutions like Ingrid should lead the way,"
Anders Ekman, Co-Founder and COO at Ingrid
For now, the change is driven by younger generations who are concerned about the environment, and more often than not demand that governments and businesses take action towards sustainability. If they don’t see any green initiatives and options in your online store, they are likely to go elsewhere.
Are you ready to start delivering on sustainability? Book a demo to see how Ingrid can help your e-commerce business.
