Modern Retail

E-Commerce & Sustainability: Engaging With Customers Through Green Practices

sustainability to engage customers

Environmental stewardship is a position increasingly expected of brands by consumers, in particular younger demographics.  A growing number of customers are continuously seeking out companies with more sustainable practices, with brands’ interactions with environment and position on social responsibility increasingly contributing toward purchasing decisions. In fact, according to research conducted by Trivium, 74% of consumers are willing to pay more for sustainable alternatives.

Sustainability is not something you can turn on but an ongoing process, ultimately built into your business planning and translated throughout your culture. To many, sustainability sounds like a buzzword used to guilt businesses into adopting practices that seem to cost more and produce less. To others, it’s a profitable business strategy that will ensure they’re thriving for years to come. Customers are pushing brands to communicate their position, whether through creative packaging solutions, certifications and conscious sourcing or through communication. E-commerce presents plentiful challenges and opportunities for sustainability – below, we outline some ways in which you as an e-commerce provider can manage your choices to responsibly fulfil orders and create cost-effective solutions.

Platform content

Marketplace features such as the Amazon storefront are perfect for highlighting brand story and values: use the opportunity to showcase how sustainability has influenced your journey, products and fulfilment behaviour. Show what you care about! 

Platforms such as Amazon are also shifting towards creating a more sustainable marketplace, with initiatives such as Climate Pledge Friendly, which highlights merchants that meet sustainability standards with a stand-out badge. This can be obtained through the Compact By Design certification, which measures products for best-in-class unit efficiency attributes such as package dimensions, item weight, and excess materials. If environmental consciousness was built into your company mission, it’s likely your products will meet the criteria for such badges. Your brand can benefit from communicating your product’s unique selling points, noting key characteristics within product listings and benefitting from displaying a recognised badge that is trusted by millions of Amazon customers worldwide. Taking the time to work through the application process is worthwhile, as unsubstantiated claims within your content can cause rejections by Amazon and ultimately delays. 

Regardless of product, however, it is no secret that e-commerce, with its chain of distribution, packaging, fulfilment and returns, contributes to the production of carbon emissions. One important part of this chain that can be resolved almost for free is the high volume of returns for many brands. E-commerce listings should be audited regularly to ensure product detail is accurate. Transparent product descriptions, built on industry research and answering frequently asked questions by customers help to prevent returns, a win for both sellers and the environment. Some marketplaces even provide the possibility of building an ‘FAQ’ section, specifically with the aim of gently removing misconceptions in absence of in-store experience. 

Fulfilling orders

Getting products to customers can vary in limitless ways, not just for each business but for each order. For businesses seeking to optimise fulfilment processes, an order management system (OMS) can provide the tools to manage products across physical and digital stores, warehouses, third-party storage, and distribution centres, helping to build a more efficient, cost-effective, and environmentally-friendly process for fulfilling orders. Click-to-door time is reduced for each customer through smart stock and delivery routing, and automated order consolidation, all while reducing the brand’s carbon footprint. 

Merchants that sell on or off Amazon can utilise the company’s fulfilment network by using Fulfilled-By-Amazon (FBA) to handle logistics with minimal ongoing management, although that can also lead to reduced control over stock. 

Drop shipping is another alternative solution option for merchants that may require more flexibility in the fulfilment process. In cases where bulky or large items, limited stock, or customisable items are shipped, this option enables merchants to ship directly from the manufacturer without any impact on the customer or brand. It should be noted that the merchants need to source a supplier and negotiate terms to ensure that the company meets all the requirements to drop ship without risk of seller suspensions or unhappy customers.  

It is an exciting time for fulfilment, with more options than ever before for sellers to opt for working for companies closer aligned to your own interests. For brands already sourcing local pick-up points and couriers, it is worth noting that some companies now operate with electric-vehicle delivery fleets or have their own sustainable initiatives to streamline delivery and reduce emissions. By working with a combination of delivery providers, brands can build a more streamlined, location-specific delivery network.  This will also allow for implementing alternative delivery optuons such as collection pick-up points, saving significant costs for firms, reducing emissions and providing more flexibility.

Packaging

Of course, when it comes to packaging, brands who have opted to fulfil orders via Amazon FBA will have no say in how their goods will be wrapped and delivered to customers. The good news is, this means sellers can benefit from Amazon’s recyclable boxes and focus instead on honing product packaging.

For brands who fulfil their own orders, however, packaging is a crucial aspect of operations. Many firms don’t pay enough attention to it and this is creating a lot of problems, ranging from negative effects on the environment to prolonged shipping costs and time. Packaging material should ideally be recyclable or reusable in some way, shifting away from the cramming of packing peanuts. Compostable tape and recyclable boxes and wrapping are also useful starting points. If sustainable packaging isn’t possible for your product currently, clearly indicate this to your customers: this can have huge benefits for recycling points, who sift through poorly handled waste which clogs up the recycling process. Design should also incorporate the post-purchase process. Sellers should consider whether it’s possible to print return information onto the packaging to prevent customers printing.  

Amazon and many other e-commerce giants have invested significantly into technology to combat wasteful packaging, backing companies who innovate packaging machinery and materials. Sellers serious about pushing online commerce need to think big and leverage new technologies. For instance, seeking solutions with third-party providers that specialise Fit-to-Product (FtP) and box-on-demand can help to minimise wasted packaging, assist with shipping oddly sized items, and reduce the requirement to store large boxes and different types of filler. 

Post-purchase experience 

Keep your communication with your customer as digital as possible. Digital receipts and paperless thank you notes are increasingly the norm for building a refined post-purchase experience, and whilst particular marketplaces such as Amazon can place restrictions on this process, building a sustainable method for communication following orders can prove invaluable for growing customer lifetime value as you build commerce via your own website or other marketplace channels.

Finally, Customer Lifetime Value can be increased by ensuring stock levels are suffiently maintained when customer revisit your channels. Out-of-stock items can lead to losing customer sales and trust, and beyond this, poor warehouse management can lead to addition costs for sellers. 

Finally, keep your customers coming back by ensuring stock levels are maintained when they revisit your channels: an out of stock product can lead to losing the customer’s trust, and beyond this, poor warehouse management can lead to additional costs for sellers. Both inadequate warehouse space and poor order management lead to frequent, smaller deliveries, driving emissions higher. On the other hand, sellers with a high volume of excess inventory run the risk of obsolete stock, which is where order management systems (OMS) can provide additional value. By establishing the correct logistics processes and solutions, brands can increase the probability that all the products offered across your platforms are available for shipment and reduce additional costs. 

Conclusion

No matter your industry or product, there are ways to make your e-commerce business more sustainable. Rather than a daunting transformation, e-commerce can instead provide a useful kickstarter for fighting old habits and building new behaviours. Whether you are a small team, or a network of departments, a combination of third-party solutions and internal processes can help your brand transition to a more sustainable, environmentally-friendly business. 

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Stuart Conroy

Stuart Conroy has run Activ8 for 20 years and has operated across multiple channels in Asia, Europe and North America. With an understanding of the latest technology, logistics and outsourcing opportunities, Activ8 provides strategy consulting and hands-on solutions to brands looking to manage risk and scale opportunity in online commerce.

Activ8 utilise their experience of being on the Fast Track 100 on two occasions to help brands navigate the scaling process and operate a risk-averse multichannel strategy.

Having worked in investment banking before starting an ecommerce business as well as creating and working with a number of start-ups, Stuart has a great understanding of the challenges facing businesses of all sizes in the modern, digitally-influenced arenas.