By T. Leigh Buehler | 03/19/2024
Ecommerce is revolutionizing the way we shop. A visit to an online store offers convenience, variety, and accessibility to customers all over the world. Nearly every item for which you're willing to pay is available at your fingertips, and shipping times seem to get faster every year.
The rapid growth of ecommerce businesses, however, has sparked concerns regarding their environmental impact and sustainable measures. Now, we must call into question ecommerce companies’ business practices from wasteful packaging to transportation and carbon emissions.
Many consumers love getting orders delivered directly to their homes, since they no longer need to go into crowded brick-and-mortar stores with long checkout lines. They prefer to shop online, but they are also taking note of the overwhelming amount of packaging that online shopping creates.
Some global consumers also place a high priority on using sustainable goods in their own efforts to reduce waste. They prefer to buy from a green business that uses eco-friendly packaging, such as recyclable packaging, and takes steps toward reducing energy waste.
As consumers become increasingly conscious of their ecological footprint and creating a positive impact for future generations, the demand for sustainable ecommerce practices also continues to grow. Shoppers are seeking out online retailers that can prioritize environmental stewardship and provide sustainable products without compromising convenience. Sustainable business practices also allow retailers to sell their items online in an environmentally, socially viable way with less impact on the natural environment.
The Rise of Sustainable Ecommerce
In a world of major climate change, global warming and resource depletion, the traditional model of “take-make-dispose” is no longer sustainable. Recognizing the urgency of addressing environmental concerns such as climate change, many ecommerce retailers have embraced sustainability and integrated eco-friendly practices into their operations.
Key Challenges for Sustainable Ecommerce Business
A few challenges that retailers face daily include:
- Packaging waste
- Carbon emissions
- Supply chain transparency
Packaging Waste
One of the most significant environmental challenges in sustainable ecommerce is the unending amount of packaging waste, such as cardboard boxes, plastic wrap, and other filler materials. With the increase in online purchases, there has been a corresponding increase in the packaging materials needed to ship those items.
The United Nations claims that over 8 million metric tons of plastic waste end up in the oceans every year. This amount is comparable to dumping a garbage truck full of plastic into the ocean every minute.
As a result, it is essential for more companies to begin using more sustainable materials and reusable packaging. By working on solutions to demonstrate their environmental responsibility, these companies can show society that they are working hard to create sustainable brands.
Carbon Emissions
The transporting of items that are ordered online, especially with expedited shipping, contributes to emissions and air pollution. Unfortunately, transportation emissions exacerbate the ecommerce industry’s environmental impact.
According to warehousing company Pyrops, the transportation and logistics industry in the United States contributes to 29% of greenhouse gases. As a result, the transportation and logistics industry is the largest single contributor to CO2 emissions.
Supply Chain Transparency
Ensuring transparency and accountability throughout the supply chain is crucial for sustainable ecommerce. Remaining committed to transparency may help companies to address important issues, such as deforestation, pollution, or even labor exploitation, that could impact the creation of a sustainable supply chain.
Digital Strategies for Eco-Friendly Retail
The good news is that customers can still have their online shopping while helping the environment. Nonetheless, a partnership must be implemented between the consumer and the retailer to develop eco-friendly retail.
Optimized Supply Chain Management
Sustainable ecommerce begins with responsible sourcing and supply chain management. Retailers can leverage digital technologies – blockchain and data analytics – within their business operations to enhance transparency and traceability across their supply chains. From the obtainment of raw materials to the delivery of the final product, running a sustainable business means optimizing every of the supply chain for eco-friendliness.
Everlane® is an American clothing retailer known for its transparent pricing and ethical sourcing practices. This environmentally friendly retailer utilizes blockchain technology to trace the journey of its products from factories to fulfillment centers.
Everlane’s mission is to empower consumers to make informed choices about their environmentally conscious products that also align with the company's sustainability goals. To do so, Everland provide customers with access to information about the factories and materials behind each product.
According to Everlane, “We’re all about putting our principles into practice, making fashion more responsible, and weaving a more sustainable future – for your wardrobe and the planet.”
Minimalist Packaging Solutions
One of my personal pet peeves is excess packaging materials. Reducing the amount of wasteful packaging used to prepare orders and using more environmentally friendly products can help companies run more a sustainable ecommerce business.
Digital strategies such as smart packaging design and on-demand printing enable retailers to minimize the use of materials while ensuring good product protection and presentation.
Loop® partners with leading consumer brands to offer products in reusable, environmentally friendly packaging. According to Loop, nearly 73% of shoppers check return policies for sustainability.
Customers receive their orders in durable containers that can be returned, cleaned, and refilled, eliminating single-use packaging waste. The digital platform facilitates the seamless logistics of packaging retrieval, cleaning, and redistribution, making circular shopping convenient and accessible.
As Loop notes, “We believe there’s a path to more sustainable returns. Not only because it’s the right thing to do for the health of the planet, but because your customers demand it.”
Efficient Logistics and Last-Mile Delivery
Digital solutions, like route optimization algorithms and real-time tracking systems, also support environmental sustainability. Retailers use these to streamline delivery routes, minimize fuel consumption, and enhance delivery efficiency. Being able to optimize logistics and last-mile delivery is key for reducing retailers’ carbon footprints.
For instance, Amazon® implemented the “Ship in Own Container” (SIOC) initiative. It encourages vendors to optimize their packaging to fit standard shipping containers to help reduce the need for oversized boxes and filler materials when they are shipped to global customers.
Additionally, Amazon invests in electric delivery vehicles and renewable energy to reduce emissions from its logistics operations. By embracing digital innovations and sustainable practices, Amazon aims to achieve net-zero carbon emissions by 2040.
According to Amazon, “We combine data and science with passion and invention to drive everything we do. We set big goals and work backwards to achieve them. We pledge to apply that same tenacity to how we address some of the world’s biggest environmental and societal challenges, so we can help make every day better for our customers, our employees, our communities, and our planet.”
Data-Driven Sustainability Initiatives
Ecommerce retailers that harness data analytics and machine learning can gain insights into consumer behavior, preferences, and sustainability concerns. These retailers can identify opportunities for improvement and innovation by analyzing data on product lifecycle, carbon footprint, and environmental impact.
Patagonia®, a company with a mission to protect nature and communities, utilizes data analytics to assess the environmental footprint of its products and create a public image of a sustainable brand. Through the use of big data, it can also identify opportunities for sustainability improvements.
Through environmentally friendly initiatives such as the “Worn Wear” program, which promotes the repair, reuse, and recycling of clothing, Patagonia encourages customers to extend the lifespan of their products and reduce waste. Patagonia also uses organic cotton in the manufacture of its environmentally friendly products.
Patagonia maintains a strong commitment to environmental stewardship while fostering a culture of sustainability and socially responsible practices among its customers.
Patagonia observes, “The climate crisis poses an existential threat, and every part of Patagonia’s business is implicated. We must reduce our carbon emissions by transforming how we make our products. We also use our resources to protect nature and support communities as they get off fossil fuels. And we demand systemic change from industry and government. The fight’s on every front.”
Educational and Engagement Platforms
Education is a key element for creating a more sustainable ecommerce system. Educating consumers about sustainable practices and engaging them in eco-friendly initiatives helps to develop an open dialogue between shoppers and businesses.
Digital platforms such as blogs, social media, and interactive tools enable businesses to communicate their sustainability efforts to the ecommerce marketplace. They can also raise awareness of environmental issues, empower customers to make informed choices, and encourage the use of sustainable products.
Allbirds® is an American footwear company known for its eco-friendly materials that conserve natural resources and its transparent supply chain. Its website educates consumers about sustainable fashion and environmental conservation.
Through engaging content and interactive experiences, Allbirds fosters a community of environmentally conscious consumers who align with the brand's values and mission. They leverage digital channels for advocacy and education to help reinforce their commitment to environmental sustainability while building brand loyalty and trust through sustainable products.
Albirds notes, “Only two years in, we’re more than 60% of the way towards our goals for 2025. In 2022, we reduced our average product carbon footprint by 19% compared to 2021. Which might not seem like much, but here’s the thing: this is a game of inches and we’re big on near term, tangible progress. It’s just one small part – okay, big part – of our mission to reverse climate change through better business.”
Creating a Better Future with Sustainable Ecommerce
Leveraging digital strategies and technologies, retailers can drive climate protection projects throughout the entire supply chain, support sustainability, and reduce their environmental impact. From responsible raw material sourcing and transparent supply chain management to sustainable packaging and the reduction of energy waste, online retailers can prioritize sustainability throughout their ecommerce systems.
Real-world business model examples like Everlane, Loop, Amazon, Patagonia, and Allbirds demonstrate the power of digital innovation in fostering sustainable ecommerce practices such as sustainable packaging and eco-friendly products. As the ecommerce industry continues to reign, consumers and retailers must work together to support sustainability and develop a pathway toward an environmentally conscious future.
Retail Management Programs at American Public University
American Public University (APU) offers an online bachelor of arts in retail management as well as other degrees related to the retail industry, such as an online master of arts in supply chain management and an undergraduate certificate in ecommerce.
Courses at APU are taught by experienced faculty members with real-world knowledge of business, corporate social responsibility, and sustainability practices. The B.A. in retail management and the M.A. in supply chain management also have specialty accreditation from the Accreditation Council for Business Schools and Programs (ACBSP®).
For more information on APU’s retail management degree or other programs, please visit our business and management program page.
Relevant Articles:
Everlane is a registered trademark of Everlane, Inc.
Loop is a registered trademark of Loop Recycled Products, Inc.
Amazon is a registered trademark of Amazon.com, Inc.
Patagonia is a registered trademark of Patagonia, Inc.
Allbirds is a registered trademark of Allbirds, Inc.
