< Back to blog listing

Sustainable e-commerce is the future of business

E-commerce has had its growing share of retail sales prior to the pandemic, especially in developed countries. But a few weeks into the pandemic, people’s necessity for commodities coupled by authority restrictions drove the market to even soaring heights. One of the notable upticks in e-commerce consumer activity had been in the UAE, where during the pandemic the share of online shoppers more than doubled from 27% to 63%.

Top e-commerce platforms saw a sharp rise in their revenues during the period of the pandemic. This has been an inspiration for other brick-and-mortar-only businesses to jump suit to stay afloat in the business. The continuous improvement of marketplaces gave way for small-medium sellers to extend their offering to a wider global audience.

While this new age of shopping presents a great opportunity for all kinds of businesses, the increased rate of consumer demands also presents a looming threat to the environment.

The environmental impact of e-commerce

Since the emergence of stronger campaigns to combat climate change, like the recent 2021 U.N climate change talk (COP26), more and more environmentally-friendly products also emerged. It can be seen in different product and market range from fashion, home care, personal care, and many others. These types of eco-friendly alternatives have increasingly becoming more accessible, thanks to e-commerce.

Studies reveal that consumers are even willing to a premium for sustainable products.

However, this is also where the irony comes in.

With more products being more accessible through e-commerce, the unprecedented rise in the negative environmental impacts can also be seen. A large number of e-commerce wastes are attributed to the plastics that are coming from the product packaging and are ending up in landfills. This doesn’t account yet for the industrial waste from the production of the items that are being traded online and the carbon footprint of shipping the items to global consumers.
Source: Statista

But despite the negative impacts that are very easy to pinpoint, there also underlies many opportunities to transform this industry into a more sustainable one using the power of innovation.

And in case you are wondering, which is more eco-friendly: online shopping or in-store shopping?

Carbon footprint of online shopping vs. in-store shopping

To summarize, below are the key carbon emission drivers for both online shopping and in-store shopping.

For online shopping, e-commerce businesses are heavily reliant on the freight and logistics network, warehousing, fulfillment, delivery, and packaging, as well as the online server network of e-commerce marketplaces.

While a brick-and-mortar store requires energy to power the retail store and set its ambiance through air conditioning, lighting, and refrigeration to name a few. All these, in addition to the logistics and supply chain operations required to store and deliver the inventory to the retail shop.

Some study suggests that overall, online shopping contributes 36% lesser carbon emissions than in-store shopping. But to truly gauge the impact of both, there are a lot of other considerations to be made such as looking into the current innovations in the other facets of bringing these goods to the market such as, for example, the current initiatives of both the air and sea freight sector to decarbonize the industry by 50% by 2050.

Source: Planetly

In this blog, we will look into the factors at which e-commerce businesses are channeling innovative solutions to reduce the carbon emissions from global shipping to last-mile delivery.

How can an e-commerce business be more sustainable?

There are several ways an e-commerce business can do to adopt a more sustainable operation.
  • 360° green business model
A sustainable business model encompasses a 360° perspective from product design and development, material sourcing, manufacturing process, labor environment,  supply chain operations, and active engagement in public stance about the environment. A sustainable business model can be engrained into all aspects of the operations including finance and overall customer experience.

This model is founded on the virtue of giving back to the environment.

  • Corporate Social Responsibility Programs and internal culture-building
Another way for e-commerce businesses to create more impact is by engaging in community programs that aim to address and provide a positive footprint on society and/or the economy. 

CSR programs are beneficial in a multitude of ways. It helps a business promote a positive brand image that in return improves consumer trust and loyalty and the overall bottom line. In addition to that, a social purpose is seen to improve talent acquisition and employee engagement, resulting in inclusive business growth.

In a study by Everyone’s Business, it is found that 55% of the public are more likely to buy from a company with a clear social purpose.

For example, RSA Global’s engages with the local community waste management programs hosted by Emirates Environmental Group where our disruptors join the paper, can, and battery recycling activities.

Choosing a CSR program is easy when it is aligned with your business culture.

  • Sustainable Supply Chain
Here is where we will have a deeper dive into creating and improving the sustainability impact of your e-commerce business.

Sustainable E-commerce: The Supply Chain Approach 

Offering expedited delivery is indeed a competitive advantage for an e-commerce business to offer. And in doing so, it is also so easy to forgo sustainability practices for the sake of staying competitive in the growing e-commerce market.

But the hope is not lost on us. This is the purpose of this blog.

Let’s explore some ways that we can keep practicing sustainability in e-commerce without compromising the consumer experience. 

For most businesses, approaching sustainability through logistics could be one of the easiest ways to transform into more ecological e-commerce operations. Here are some concrete and actionable points to adapt to make your e-commerce operations more environmentally friendly.

Transition to sustainable packaging 

Nowadays, there are numerous environmentally-friendly packaging options ranging from recycled, reusable, and compostable ones. In terms of package protection, there are innovative alternatives to plastic bubble wraps like paper cushioning honeycomb wraps, shredded paper, or moulded pulps to place fragile items on.

The e-commerce leader Amazon has also been taking steps to improve its packaging selections through the elimination or replacement of plastic packaging with paper-based and plastic-free options alternatives.

But keep in mind that switching to non-plastic options is not always the best choice, because even recyclable or paper options, if not managed properly will continue to contribute to the waste problem.
Source: Packaging Europe

It goes back to the 360° engagement.

Make it certain that there are follow-up activities to strengthen the initiative of your brand.

A few ways to create a continuous engagement are:
  • Incentivizing consumers to reuse the packaging which can help not only in reducing packaging cost in the long run but serves as free branding, too.
  • Inform and encourage consumers to practice responsible waste management through the power of online platforms. Inform them of local waste recycling initiatives and facilities.
  • Initiate programs to help consumers manage unavoidable operations waste that can be upcycled or reused to generate more value.

Optimize cargo shipments, last-mile deliveries and returns

The role of logistics digitization comes into play here- through the usage of advanced technologies that can provide insightful data to help e-commerce businesses and e-commerce fulfillment centers optimize last-mile deliveries and returns.

One of the emerging uses of technology in the e-commerce supply chain is using maps to better route and track shipments and deliveries across certain locations.

This can be done in combination with other strategies such as shipping in bulk, consolidating shipments, or setting minimum orders which can help to cut costs and reduce the environmental stress due to the additional packaging and emissions from the shipment of otherwise individual items.

Innovation in logistics technology will enable e-commerce businesses to create better fulfillment and delivery operations based on data-driven decisions.

Optimizing last-mile deliveries by situating the fulfillment centers with access to efficient road infrastructures is proven to reduce fuel consumption and consequently, carbon emissions. Not to mention the speed to market advantages it provides. 

Engaging and educating drivers about fuel-saving innovations and practices such as proper servicing and maintenance of vehicles is also a great strategy to invest some time in.

Returns are another costly dilemma for both e-commerce businesses and the environment.
Research shows that customers return up to 30% of their online orders.

According to BBC Earth, each year, about 5 billion pounds of waste is generated through returns.

The environmental aspect of this challenge can be solved by applying the same strategies of efficient routing, collection, and consolidation of returns.

But reducing the returns, as much as possible, is still the win-win scenario for both businesses, the environment and consumers. Providing adequate information about the items you sell online should help consumers decide better before placing an order.

Another very engaging trend nowadays is the use of augmented reality to immerse digital shoppers into the experience of actually using the product, helping them create the best purchase decisions.

IKEA’s augmented reality app IKEA Place.

Localize your supply chain

Inventory is the one of biggest investments in the retail e-commerce business. Localizing inventories and using a local supply chain network or provider is an option that will greatly improve the distribution of orders as it becomes closer to the customers.

Despite the disruptions that keep happening in the global supply chain lanes, consumer demands are in no way slowing down. Having a localized fulfillment center supports resilient e-commerce logistics operations and faster deliveries to local and regional customers.

As the fulfillment to delivery shortens, the emissions are being lessened compared to long-distance deliveries.

Choosing a fulfillment center within a bonded zone presents other advantages such as deferment of taxes and duties, easy access to import and export lanes, and overall provides a seamless entry to your chosen market.

As an example, in the UAE, one of the many great attributes of metro cities like Dubai is the boasting structure of road transportation that aids to an efficient e-commerce fulfillment and delivery operations.

Dubai’s transportation infrastructure ranks as one of the world’s best.

Work with carbon-neutral companies

Neutralizing carbon emissions throughout your e-commerce business operations can be a very costly investment. This is where working with carbon-neutral companies works because they already have infrastructures in place and an established network that is ready to support a sustainable business launch.

Environment-conscious partnerships present a triple-win situation for your brand, your consumers, and the environment.

Hiring an e-commerce solutions provider to manage your cross-border deliveries, import duties, order fulfillment, last-mile deliveries, and return logistics will free up a great deal of time and costs which can otherwise be channeled to grow your sales, develop top-notch products or provide unparalleled customer service. These are very vital for an e-commerce business to scale in the online selling market.

Is e-commerce environmentally-friendly?

It can certainly be!

Despite the seemingly long way that global trade needs to take to fully reach its sustainable business potential, there lies a big hope for businesses and consumers, through the innovations that are emerging nowadays.

As a starting point, e-commerce businesses should start to listen more to the consumer sentiments about the environment as well as try to create a more positive impact.

Sustainability in e-commerce operations is becoming the norm rather than just an option. Tackling this aspect of this new-age business offers many benefits for the business, the consumers and the environment.  
x WhatsApp us about your business inquiry