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Demand & Inventory Planning

Sustainable Business is the Future of eCommerce

Demand & Inventory Planning
May 27, 2021
7 min read
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Sustainable business is more than just a buzz-word. It matters to consumers, and more importantly to our future. Learn how businesses of all sizes can help build a more sustainable ecommerce industry.

Why Sustainable Business Matters in eCommerce

There’s no doubt that the ecommerce boom has changed the face of commerce, and now that it seems consumer shopping patterns may have changed for good, it’s time to step back and take a look at the environmental impacts of our new digital-first economy. 

Many argue that ecommerce is actually more sustainable than the traditional brick-and-mortar shopping model due to efficiencies in fulfillment and logistics. Even with increased demand for 1 to 2-day delivery, advancements in the logistics industry enable merchants to stock their inventory closer to their customers to lower time in transit and reduce next day air shipments (which emit nearly 6 times more carbon than ground shipments).

However, the environmental impact of final mile delivery can’t be overlooked. The eCommerce boom is expected to increase the number of final mile delivery vehicles on the road by 36% and increase greenhouse gas emissions by 30% overall by 2030. This likely does not account for the impact of reverse logistics. The return rate on ecommerce orders can be up to 35% higher than in-store purchases, and the method of return varies — from scheduled carrier pickups, to in-store returns, to dropoff centers. But no matter the transit mode, ecommerce returns and resale activity is estimated to create 10 billion unnecessary transportation trips each year.

And we haven’t even begun to talk about waste. Those returns often can’t be re-sold, or retailers will lose money on a resale. In 2019 alone, ecommerce returns generated 5 billion tons of landfill waste, emitting as much carbon dioxide as 3 million cars driving for one year. Small parcel deliveries also significantly increase packaging waste. A report by Oceana estimates that we could circle the world 500 times with just the protective plastic pillows Amazon shipped out in their packages in 2019.

All of this adds up to a heavy burden placed on the environment by ecommerce activity. Businesses are starting to take notice and more importantly, consumers are starting to notice and carefully consider the environmental impact of their online purchases.

How Consumers Feel About Sustainable Business Practices

A consumer survey by Shopify showed that 49% of consumers would be willing to pay extra for a sustainable shipping method. The report, however, notes that there is somewhat of a cognitive dissonance among consumers, citing a study from the Harvard Business Review that found that while 65% of consumers want to support sustainable businesses, only 26% actually do. In fact, those 49% of consumers willing to pay extra for sustainable shipping were more likely to opt for a same day or next day shipping option when available.

So, while shoppers do value sustainable business practices, they have a difficult time making decisions that line up with their values. What, then, can ecommerce businesses do to help consumers make ethical choices and lessen the environmental impact of the booming direct-to-consumer market?

Sustainable Business In Action

Many brands are stepping up to the plate to remove consumer choice and build environmentally and socially conscious programs into their supply chain and beyond.

O2 is a healthy alternative to traditional recovery drinks with 50% more electrolytes than leading recovery drinks and 7x more oxygen than typical water. Their mission is to be a company that society is proud exists, and one way they’re pursuing that mission is sustainability in their supply chain through several programs:

  • Calculating and offsetting carbon emissions, with a timeline of becoming carbon negative by November of 2021 
  • Working to remove all plastic from their products by the end of 2021, making them 100% plastic free
  • Sustainable packaging options like 100% compostable bags and labels, 60-70% recycled materials in their corrugate supply (working towards 100% recycled materials), and using recycled aluminum cans as opposed to virgin aluminum
  • Donating to wildlife conservation organizations and renewable energy

ALOHA is an organic plant-based protein brand that is USDA organic, certified vegan, and non-GMO. As a certified B-corp, they have met the highest standards of social and environmental sustainability. Besides their organically sourced ingredients, which naturally put less strain on the environment than conventionally farmed ingredients, they also provide food to communities in need and support nonprofits that provide much needed services in underserved areas. Their community partners include:

  • Social Works Chicago, which empowers youth through arts and education and provides free lunches for students in need.
  • Soul Fire Farm, which fights to end racism and injustice in the food system
  • West Hawaii Community Health Center, which provides medical, dental, and behavioral health care to families in Western Hawaii
  • Conscious Alliance, a network of creatives that use their time and talents to feed hungry families in Boulder, CO

Thousand Fell Shoes is closing the loop in the footwear industry. Their fashionable sneakers are made from sustainably sourced materials and are fully recyclable. When a wearer is finished with their Thousand Fell Shoes, they can return them to be either refurbished and given to someone in need or fully recycled. Shoppers never need to send another pair of sneakers to a landfill again.

Final Mile: The Last Frontier in Sustainable Business

The ecommerce industry must still face the dilemma highlighted by Shopify’s consumer survey: that when faced with a sustainable option or a fast and convenient option, most well-intentioned consumers will choose the latter. The demand for 1 to 2-day delivery will continue to drive up carbon emissions if brands don’t step in to offer a more attractive alternative for shoppers.

This dilemma is what prompted Ware2Go to offset all carbon emissions within its 2-day delivery network. Through a partnership with Pachama, Ware2Go is calculating carbon emissions generated by all final mile deliveries within its network (small parcel ground, small parcel air, LTL, and FTL) and purchasing carbon credits that support reforestation, forest management, and forest protection efforts all over the world.

To help solve the cognitive dissonance problem of choosing convenience over sustainability, Ware2Go is fully covering the cost of carbon offsets for all merchants. Consumers will see no change in the price or convenience of their shipping, but they will have the assurance that their purchase is in line with their environmental values.
To learn more about how Ware2Go is helping merchants of all sizes build a more sustainable ecommerce industry, read more about our partnership with Pachama.

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