Why sustainable e-commerce is the future

E-commerce has experienced a substantial growth over the past couple of decades. With the onset of a global health crisis, the online shopping process notably increased by a significant account. The heightened consumer demands, increase in brands available online and non-stop deliveries across the globe are all posing a looming threat to the environment. This article explores how sustainable e-commerce has been on the rise is now the future for the industry. The sector is already exploring various potential innovations to transform the industry into a more sustainable one.
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First, Let’s understand the environmental impact of e-commerce…

To combat climate change the rise in demand of sustainable products has been a positive development. Consumers are educated, well-informed and aware today to make a willing choice to pay a premium for sustainable products. Many eco-friendly, zero-waste, biodegradable alternatives are becoming increasingly accessible via e-commerce platforms.

E-commerce products also use a range of plastic packaging – which is not biodegradable and often lands in landfills making e-commerce a major contributor to e-commerce waste.

Another impact is the carbon footprint of shipping globally that contributes to the environmental burden. Emissions of the logistics, warehousing, fulfilment centers, delivery, packaging, freight etc. are all leading causes of concern for the e-commerce sector.

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Building a sustainable e-commerce sector

To address the concerns and cope with the challenges associated with e-commerce business set-ups, many e-commerce brands are now adopting sustainable practices in their operations. Here are some key areas brands are focusing on:

a. Adopting and embracing a Green business Model

A 360 degree green business model is one that integrates sustainability into all aspects of the business. Take in your product design to the packaging design – consider the supply chain operations and logistics. Factors of an e-commerce business like materials, sourcing, process of manufacturing, labour working conditions, engagement in public environmental issues to becoming a carbon neutral are all taken up in this business model. A sustainable business model in this aspect should demonstrate a commitment to the environment and is able to positively impact its finance while enhancing customer experience.

b. Collaborative efforts with Carbon-Neutral companies

Several brands are now becoming sector analysts and consultant to suggest e-commerce brands strategies to become more carbon neutral and make their operations less damaging to the environment. These partnerships and collaborations with these carbon-neutral companies offers e-commerce brands to offset their carbon emissions. Partnering with environmentally conscious firms offers mutual advantages to e-commerce setups, consumers, and the environment. Outsourcing e-commerce solutions to such providers can help e-commerce brands to free-up resources to focus on their core – growth, sales, product development and customer service.

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c. Building sustainable supply chains

Efforts to optimize supply chain offers to minimize environmental impact. This includes transitioning to sustainable packaging materials which are recycled, re-usable and/or biodegradable materials. Transparency in supply chains lead to a clear picture of the organization and towards implementing efficient logistic practices to optimise cargo shipments, last-mile deliveries and returns. E-commerce brands here can make the best use of digital logistics and emerging technologies to make data-driven decisions to reduce fuel consumption in their processes.

d. Corporate social responsibility programmes (CSR)

E-commerce brands must engage with their community and contribute back to the society. Many brands work with CSR initiatives to enhance their brand images, consumer trust, and loyalty. This also helps improve their employee engagement and talent acquisition as they align with CSR programmes to their business culture strengthening their impact.

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e. Local sourcing and supply chains

A key component to reduce the carbon emissions from global deliveries is to establish local fulfilment centres that help to improve distribution and shorten delivery distances. With local fulfilment centres that are closer to customers, e-commerce business model then helps them to achieve faster and quicker deliveries while also minimizing the impact of long-distance transportation. Certain aspects of this also offers e-commerce brands additional advantages such as tax deferment and streamlined export/import processes.

As we step into the metaverse, digital is becoming a critical part of lives and only reflects how strong e-commerce channels will become to serve the global population. While this tremendous growth is also creating several career opportunities, it is crucial to address that the environmental impact concerns need to be addressed. We are already witnessing several brands that are working towards providing solutions to e-commerce sector to become carbon-neutral via emerging technologies, innovating materials and offering consulting on becoming a more conscious business practise.

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Author: Mankiran