The Green Economy
With growing climate change concerns and increased awareness around environmental issues, consumers are placing more and more demands on businesses to address sustainability. The eCommerce industry is no exception; from the raw materials that go into the products through to how they are shipped and delivered, there can be environmental impacts at every stage of the product life cycle.
The idea of a “green economy” is one that aims to reduce environmental impacts, risks and tackle ecological scarcities. Additionally, the main goal of a green economy is to achieve sustainable development without degradation of the environment. Although climate change is an important political issue, it can also factor into the success of eCommerce businesses.
We know that consumers are increasingly aware of shopping sustainably and ethically, but what exactly is sustainability? This article will explore this topic in greater detail, beginning with what sustainability actually is. In addition, we will take a look at consumer attitudes and how much of a priority sustainability should be for your brand, as well as the effectiveness of strategies like offsetting.
What is sustainability?
When it comes to companies’ corporate social responsibility, the word ‘sustainability’ is certainly used a lot. But what does sustainability actually mean? What factors help to decide whether or not a company (or even a specific product) is sustainable? For starters, sustainability is often seen as synonymous with eco-friendly, but that doesn’t necessarily tell the whole truth.
Eco Credentials and Brand Economics
Over the last 20 years or so, there has been a movement of ethical consumerism that inevitably comes back to both the product and the brand that customers are buying from. Therefore, one part of sustainability is to look at the “eco credentials” of a product. This includes, for example, its supply chain, the raw materials used, and the way in which it is packaged.
However, to take sustainability a step further is to look at whether or not the brand is sustainable at its core – in the way it actually functions as a brand. This involves deeper analysis, looking into the brand’s ethics and economics. This way, all components must synonymously tie together so companies can take products with a better impact and scale them – hopefully acting as alternatives to replace current mainstream products.
Another take on the meaning of sustainability is to focus more on regeneration as opposed to sustainability. Some may argue that ‘sustainability’ merely implies sustaining the level of damage that we already have, as opposed to thinking about how that can change in the future. One approach is to evolve regenerative businesses which interconnect three key pillars: the economic, environmental, and social values.
This perspective is not just about products and whether or not they are eco-friendly – in a way, it’s an evolution of sustainability that aims to create a net-positive impact on people and the planet. So overall, it’s no longer enough to look at sustainable materials and practices; they also need to be regenerative in order to bring us back to that net-neutral level and have an end-of-lifecycle within them.
Priorities and Consumer Attitudes
It is clear that sustainability is an increasingly important topic across multiple industries, including eCommerce – but to what extent? Should it, for example, be your brand’s number-one message? On marketplaces, there are so many transactions across such a large number of brands in every vertical, and it’s clear that sustainability is such a critical part of their business.
For many of these brands, innovation lies at the heart of their business – they are research and development companies at their core. This factors into their sustainable manufacturing processes, which are a by-product of this mindset. However, from a consumer point of view, customers have different reasons for wanting to buy sustainable goods.
These reasons are most commonly emotional factors – something that ties them to a price point, their life activities, and accessibility. Of these three, accessibility appears to be the most crucial factor. Ultimately, the decision-making process that a consumer has at the checkout is relatively small.
On one platform, for example, it was found that 43% of consumers feel guilty every time they receive a delivery that may not be sustainable. Therefore, one strategy for brands is to make consumers feel good about their purchase through a combination of tagging, collection building, and storytelling. This way, the user experience is heightened through brand articulation and imagery so that the consumer feels happier at checkout.
Additionally, being a sustainable business removes the customer’s guilt and turns the process into a rewarding purchase, which helps break down the cycle that price is the only factor in the purchasing decision. Eventually, the higher price point becomes the norm for shopping sustainably. So overall, it’s clear that sustainability is a very high priority for both your business and your customers.
Another strategy that some retailers use is carbon offsetting – but how effective is this solution? Offsetting is a way of reducing emissions or absorbing CO2 in order to compensate for your own emissions. One common example of this is a business planting trees for each product that they sell, helping to offset some of the carbon produced from their own manufacturing processes.
The first point to make very clear is that offsetting is one part of a solution, but it is not the solution. It’s great to integrate offsetting into your business, but unfortunately, it is not enough if you only offset and do nothing else to deal with your supply chain, logistics, delivery methods, and material source.
Although planting trees (or other offsetting methods) is a step in the right direction to draw down the carbon that we have put into the atmosphere, ultimately we need to be stopping the source of those emissions going forward. So although it is part of the solution, it’s only one aspect of an entire cycle.
In summary, there is no doubt that sustainability is a hot topic across the eCommerce industry and this is unlikely to change. Consumers are becoming increasingly aware of brands’ sustainable practices, so strategies should be put in place in order to stay competitive. This does factor into purchasing decisions at checkout, with many consumers feeling guilty over their deliveries.
However, as we have seen, the eco credentials of a product along with strategies like offsetting are a good start, but the climate change issue runs far deeper than that now. Retailers need to look across their practices to ensure that they are regenerative – helping us return to a net-neutral level.
Finally, another piece of advice is that strategies like offsetting (particularly if they are heavily marketed) can often be seen as ingenuous or only deployed to convince people to buy more. To really be successful, look at the reason why you dived into creating a sustainable business, to begin with. If there is one thing that consumers will appreciate, it’s being completely genuine to your business and brand.
This Retail Without Borders panel discussion was hosted by Chloe Thomas, Author and Podcast Host from eCommerce MasterPlan. Guest speakers included David Friedrichs, CEO of Cerqular, Lucy Stewart, Head of Global Sales and Business Development for Vivobarefoot, and Thomas Panton, CEO of Greenr.
The full session is now available on our YouTube channel.