Towards a sustainable e-commerce

E-commerce is now worth around three trillion euros worldwide and, especially in recent years, has seen a strong increase in consumer interest.

The growing interest in online sales has led to questions about the relationship between e-commerce and sustainability.

The 2018 Impact Report shows how the carbon emissions produced by Yoox derive from three main sources, among which we are not surprised to find shipments:

• Management of offices and distribution centers
• Business trips
• Distribution activity

Although the impacts generated by online sales have a different weight between e-commerce companies and brands, mainly due to the quantity of shipments managed, e-commerce is still a key communication channel to the final consumer and for this reason it is important that it is managed consistently with the corporate sustainability commitment.

This article allows you to understand which factors have the greatest impact on e-commerce platforms and, at the same time, propose possible strategic solutions.

Is it possible to reconcile e-commerce and sustainability?

One of the challenges that companies operating in the fashion sector are called upon to face is precisely that of reducing their ecological footprint.

Companies that use e-commerce can act on four elements to reduce their impact:

• Transport
• Returns
• Packaging
• Consumer information

Transport

According to logistics expert Alan McKinnon, the demand for last mile deliveries referring to the B2C market (actual delivery to the end customer) is expected to increase by 78% by 2030, increasing competition to offer ever faster home deliveries .

The problem, however, is precisely this: the speed of deliveries is directly related to the environmental impact. The transport sector is responsible for 30% of greenhouse gas emissions in Europe, of which 72% is produced by road transport.

One of the possible solutions to try to counter the impact of last mile delivery is to use electric vehicles and, where possible, bicycles or make collection points available in convenient places, close to inhabited centres, within walking distance by the consumer.

Another action that companies can put into practice to reduce the impact on the environment is to adapt the choice of vehicle to the final destination, opting for intermodal transport.

For long distance the environmental costs of air travel are less impactful than petrol or diesel vehicles on the road, since the environmental costs of take-off and landing do not vary on a direct flight.

Rail and maritime transport have the lowest carbon emissions accounting for shares of 0.4% and 14% respectively. Therefore, the choice of the train as the most sustainable solution remains unchanged. 

Returns

One of the greatest advantages for the customer who uses e-commerce as a purchasing method is given by the possibility of making free returns. In reality, the advantage is also perceived by companies which, by offering the free return service, see their sales increase by 457%.

At the same time, in the US, the value of returns creates $369 billion in damages, equal to 10% of sales. In Europe, according to a study carried out by a trade association of British traders, 25% of clothing products purchased online are returned to sellers, representing a loss in terms of balance sheet.

Companies like Mister Spex use tools like augmented reality to overcome the problem of returns. In fact, thanks to augmented reality, the consumer has the opportunity to try their product online, reducing the total number of returns by 37%.

In addition to augmented reality, there are other possible actions that can help the consumer in choosing and therefore remedy the problem of returns, such as:

• Limit free returns: reduce the number of free returns, defining a maximum number possible. In this way the advantage for the consumer remains, but it is possible to stem the environmental impact.
• Offer more details on the product: make available detailed descriptions of the products, associating them with images, quality videos and a size guide. This solution can help consumers make more informed choices.

Packaging

A survey conducted by Ipsos Global Advisor finds that:

• 80% of people worldwide say companies should recycle or reuse the packaging they produce
• 75% of global consumers agree they want to buy products with the least amount of packaging

The European Union is also addressing the problem of packaging, investing in a strategic plan and setting itself the goal of replacing all plastic packaging on the market with recyclable solutions by 2030, in order to increase the demand for recycled plastic on the market.

The rapid growth of online shopping presents new challenges and, with them, also the need to adopt best practices to support companies in choosing more sustainable packaging.

Various manufacturers, suppliers, retailers, trade associations and solution providers have therefore come together in working groups such as the GS1 US Sustainability in Packaging Materials Workgroup, whose purpose is to draw up guidelines that can be implemented by companies to reduce resources used in packaging and waste related to the use of plastic.

The guidelines aim to:

• Adapt brand and retailer activities to UN ESG goals.
• Ensure that products are shipped and handled in a manner that safeguards them and minimizes non-recyclable waste.
• Reduce the amount of plastic bags used in the retail ecosystem and increase the use of cartons.

Returning to the focus on fashion, among the most active clothing companies on sustainability issues it is important to mention PVH, the first clothing company to join the How2Recycle program, a project launched by the Sustainable Packaging Coalition which explains to consumers how to recycle packaging materials through different actions such as:

• Consult a local recycling program.
• Use a store delivery station at a participating retailer.

Consumer information

The United Nations UNEP program has approved new visions and guidelines to improve actions and communication in the fashion sector, in order to align them with the objectives defined by the Paris Agreement.

Support for effective communication is given by GreenStory: a platform that allows companies to offset the carbon footprint of their products and to communicate clear, transparent and intuitive data in order to increase consumer awareness of the purchases they are making.

Among the virtuous companies that use the GreenStory service we find Pangaia and BAM Bamboo Clothing. For example, on the Pangaia e-commerce platform, by clicking on any article, it is possible to view information such as:

• Materials with which the product is made
• Origin of the raw material
• Advantages given by the use of that specific raw material
• Impacts expressed in the form of equivalences
• Compensation

Conclusion

Sustainability challenges for fashion companies are many and understanding where to start is not easy.

Although, in environmental terms, the impact of e-commerce may not seem priority, it is often linked to other issues that, instead, greatly affect the level of sustainability of the company, such as the minimization of returns.

To this must be added the active involvement of customers in the purchase choices, activities with positive effects also in terms of brand image and communication.

Combining e-commerce and sustainability is possible: Cikis can show you the best solution and help you find the necessary resources in line with the company budget.