Is e-commerce environmentally-friendly?
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 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.
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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.
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.
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 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 practices to keep sustainability in e-commerce without compromising the consumer experience.