Sustainable e-commerce is the topic of the day: in view of the climate crisis, internationally operating online retailers are required to develop environmentally friendly concepts for their businesses in order to leave a green footprint. Moreover, by doing that, they are also scoring top marks with European customers.
Plastic or polystyrene packaging, extended supply chains and large volumes of parcels during the Corona pandemic: online retailing has not been considered particularly environmentally friendly so far. In view of the global climate crisis, however, more international e-commerce players are looking into operating more sustainably. A trend with great potential. After all, there is an enormous increase in awareness among European consumers: environmental responsibility is becoming much more important to them when shopping online. This is illustrated, for instance, by a survey conducted by the German digital association Bitkom: According to this study, a large proportion of the consumers questioned (86 percent) agree to receiving their goods in reusable cartons. Around half (52 percent) of the respondents would pay a surcharge for more environmentally friendly packaging. The circumstances under which a product has been manufactured are important for six out of ten consumers. 40 percent already pay attention to the length of the supply chain.
Sustainability in e-commerce: Taking actions for an improved carbon footprint
Every step counts: Today, online retailers have a wide range of options for taking on ecological responsibility and communicating this plausibly along the customer journey. This can happen for instance through environmentally friendly business concepts, recycable packaging materials and carbon-neutral parcel deliveries. In its “Shipment Zero” campaign, e-commerce giant Amazon, for example, states that it intends to ship at least half of all orders carbon-neutrally by 2030. The project is to be realized by increasingly converting the vehicle fleet to electric cars and bicycles, supplying the logistics sites with clean energy and recyclable packaging material or reusable packaging. Likewise, European e-commerce giants are also pursuing specific approaches to achieve a better climate balance and produce less waste: The German Otto Group has been committed to sustainable e-commerce for decades. In order to achieve the major, overall goal of climate neutrality, the retail group is launching a new CR strategy for 2021. This will contain effective measures to further reduce CO2 emissions.
Keeping return rates low: More product details, increased use of new technologies
Shoes, pants or blouses in various sizes, colors and fits: Particularly in the fashion sector, consumers tend to order more items than they ultimately plan on buying. This results in high exchange rates and increased CO2 emissions, which unnecessarily burden the environment. Studies show that the main reasons for returns are the (wrong) size, style and quality of the products. Online retailers can compensate this by providing extensive product information: The more details are provided, the more accurately consumers can inspect the desired products prior to buying them.
Augmented Reality is also expected to make a significant contribution to reducing the number of misplaced orders. After all, digital technology expands human perception in real time through texts, images, videos and animations. The Swedish furniture store IKEA was one of the first suppliers to present the advantages of Augmented Reality. In the Ikea Place app, customers can transfer virtual furniture to their own homes in order to test how it looks and feels. The technology is already being used in many areas of the fashion industry, as it enables virtual try-ons – a welcome replacement for the traditional changing room.
Making supply chains more sustainable – a neglected trend
When it comes to acting more sustainably, the pre-sales area is crucial, as well. That is the reason why more companies are beginning to take a critical look at their value chain. However, the increasing relevance of the topic is not yet reflected in a more sustainable design of supply chains. This is illustrated by the 12th Hermes Barometer on “Sustainability in Supply Chain Management”, a survey conducted by Hermes in Germany among 200 logistics decision-makers. According to the survey, 67 percent of respondents believe that sustainability aspects are of very high or high importance for their company’s supply chain management (SCM). However, the vast majority of companies (69 percent) do not yet record their CO2 emissions – and 65 percent of them do not plan on doing so in the future either.
At the same time, logistical approaches that reduce the demand for resources already exist. For example, cloud-based solutions are designed to ensure a more efficient collaboration with suppliers, customers and partners. Thanks to cloud computing, authorized stakeholders are able to access data from any location and thus react faster to new requirements and process orders more precisely.
Sustainable production: Best Practices of European companies
In view of the growing consumer awareness for more sustainability in e-commerce, retailers are well advised to focus on environmentally friendly production and product quality. In Europe, there are some pioneers who want to create a comprehensive awareness of sustainable business methods. One best practice example is the German detergent manufacturer Frosch, which is selling its products in almost all European countries. The company has been using recyclable packaging for years. For instance, the shower gel bottles are made of 100 percent recycled plastic collected from European households.
Successful upcycling is further demonstrated by renowned shoe brands Veja or Toms. Both companies rely on products made from recycled waste and organic materials – and thus meet the zeitgeist of younger generations.
Eco Label: Labelling sustainable products
For internationally operating retailers who sell environmentally friendly products in Europe and want to label them accordingly, applying for an EU Ecolabel could be helpful. The label is awarded to products that have less environmental impact than comparable articles. The label can be applied for by retailers, importers and manufacturers at the authority in charge in the respective country.
Sustainable e-commerce – more than a trend
Although in many European countries, sustainable e-commerce is still in its initial stages, it is more than just a trend. For internationally operating retailers, it is advisable to set an increased focus on carbon-neutral and socially acceptable business models and to be guided by existing best practices. And that is not only because they are taking responsibility for the future of our world. They are also winning over local customers that have an awareness for green topics and are looking for environmentally friendly products and shipping options. The younger generations in particular will shape sustainable e-commerce: Hence, the demands of this important target group must be taken into account.