With more consumers becoming environmentally conscious, sustainability is taking its place as a major driver for businesses. It’s better for the world, and also boosts your brand and your bottom line.
Since the eCommerce industry’s carbon footprint is so significant, online sellers are responsible for adopting green business practices. It may seem overwhelming, but you can take small steps, starting with logistics. This is one aspect that will greatly reduce your business’s environmental impact.
The impact of eCommerce on the environment
Over the past few years, the eCommerce industry has skyrocketed. In 2022, it’s expected there will be more than 260 million digital buyers in the United States alone. Projections also show these numbers should reach 291.2 million by 2025. As for the global industry’s long-term growth, Nasdaq predicts that by 2040, 95% of purchases will be done via eCommerce.
On the one hand, these numbers are great for business. On the other, improperly managing the industry’s growth could lead to more waste. Three key factors play the biggest role in this.
More sales = more packaging
Businesses have to package items properly to ship them. Customer satisfaction also drives how they’re packaged, leading some companies to go overboard.
Packages need protection
To ensure the product arrives in perfect condition, businesses have to use padding. This could include bubble wrap, styrofoam packing peanuts, or even additional cardboard or paper.
People want their items fast
In this day and age, speed is of the essence. When people order something, they want to receive it as soon as possible. In their eagerness, they can impulsively order items one piece at a time instead of waiting to make a single large order.
The eCommerce boom has caused online shipping to skyrocket. This high demand for boxes in turn created a huge cardboard footprint in the United States. Also, according to the Environmental Protection Agency (EPA), packaging accounts for around 30% of total solid waste generated in the U.S.
Meanwhile, on a global scale, a study published by Oceana found the eCommerce industry produced two billion pounds of plastic packaging waste in 2019 alone. The following countries were the top five contributors, all generating hundreds of millions of pounds each:
- United States
- United Kingdom
These figures are alarming, and with the industry’s continued growth from 2020 onwards, the waste has followed suit.
Increased transportation emissions
Since customers don’t need to travel to a physical store, logically, the eCommerce industry should reduce the amount of emissions from this activity.
However, all the logistics involved actually produce high transportation emissions. Cutting those down isn’t easy thanks to a couple of factors.
Items typically come from different distribution centers
Orders composed of items that are only available in separate distribution centers have to travel a greater distance to complete fulfillment. This results in higher greenhouse gas emissions per item.
We previously mentioned the importance of fast shipping. In fact, Shopify found that globally, 32% of shoppers abandon their purchases when the estimated shipping time is too long.
For the sake of delivering packages on time, some enterprises are forced to send out their partially filled freights. This results in more trips and emissions.
A report by Forbes showed online shopping actually has a greater environmental impact than going to physical stores partially because of the increasing occurrence of item returns and redeliveries.
The activities involved in completing an item’s redelivery or return leave a significant mark on the environment:
- Returning the item requires transport, which produces extra emissions
- If the product requires repackaging, the old packaging has to be thrown away and the shipping labels changed, increasing waste
- If the customer wants the original item exchanged for another, transport and packaging are doubled
Why sustainability is so important for eCommerce
Aside from its environmental impact, sustainability can benefit your eCommerce business in two ways.
Consumers care about it
Environmental concerns are growing among consumers. Since 2016, searches for sustainable goods have been increasing globally by 71%. It’s so predominant that consumers consider a company’s dedication to becoming eco-friendly before making a purchasing decision.
Forrester found 57% of consumers intend to support companies with sustainability contributions. Also, across age demographics, First Insight, Inc. discovered:
- 62% of Gen Zers prefer buying from sustainable brands, which was similar to Millennials’ responses
- 54% of Gen Xers and 44% of the Silent Generation shared the same sentiments
- Only 39% of Baby Boomers held this opinion
Although there’s a vast difference in opinion between the younger and older generations, it’s still evident that significant portions of each demographic prefer eco-friendly businesses.
It boosts your brand
Suffice it to say, going green — that is, prioritizing environmental sustainability — can help your business stand out. It’s also a responsible way to appeal to environmentally conscious shoppers and engender customer loyalty.
The outdoor apparel brand Patagonia is a shining example of a company going green. It’s made sustainability, conservation, and environmental activism a key focus of its business practices:
- Patagonia produces its materials and products under the guidance of environmental and animal welfare responsibility programs
- The brand is transparent about its owned facilities and suppliers across their supply chain, sharing their commitment to cut down energy consumption, greenhouse gas emissions, and waste
- Patagonia also has a program for repairing and recycling their products
- The brand conducts grant programs for activist organizations, from small and grassroots to international groups
- Its social responsibility programs ensure safe, fair, legal, and humane working conditions
Patagonia’s efforts have had outstanding results. The pursuit of its mission to help protect the environment has boosted its bottom line incredibly. They not only enjoy increased revenues, but also tax cuts and improved employee satisfaction.
How to add sustainability to your logistics strategy
Incorporating eco-friendly changes to your business is no small task. However, you can start by focusing on one of the major contributing factors to your carbon footprint: your logistics. Here are some strategies for greener processes.
Keep your prep centers close to your supply
Consolidate and prep all your goods as close as possible to your supply, whether it’s in your state or another country. It reduces the distance items need to travel to reach you, thus reducing your emissions (and saving you money).
Imagine you’re handling a bundled order composed of five different products. Having each item come from various places can cost you a lot. You’ll have to pay for space in multiple shipping containers, trucks, etc, and each component would also have its own packaging.
However, by gathering each product into a single warehouse closest to them you could ship the bundle as one efficient unit instead of five.
Keep your inventory close to the demand
Look at your last mile delivery. If you can shorten the distance between your stock and your buyers, you can:
- Shorten delivery times
- Save resources
- Reduce last mile emissions
Let’s say you keep all your goods in California, but get 500 orders split between multiple states like Florida, Texas, and New York — you’ll have to ship all of those individually. But if you already have inventory in those locations, you can ship a bulk of goods from California to Florida, for instance, then send orders package by package to much closer buyers.
Incorporate sustainable choices throughout your supply chain
Internal elements of your supply chain are ripe with opportunities to become more eco-friendly. Below are a few specific examples.
Eco-friendly pallet wraps, dunnage, and packaging
For your pallet wraps, you can switch to biodegradable material like paper. For example, you can use compostable stretch wrap, which effectively replaces the current industry standard of using multi-layer plastic — to provide a more sustainable choice for pallet wrapping. Afterwards, you can even shred it to be reused as dunnage.
The same goes for boxes, plastic bags, and other forms of packaging. Try to find biodegradable alternatives so they won’t sit in a landfill for years.
Here are a few options:
- Some startups have created seaweed-based packaging
- Another alternative is plantable packaging where, instead of throwing it away, you can plant it after use
Digitally integrating your supply chain is typically done for a better customer experience, but it can also reduce your business’s carbon footprint. Going digital can help you go green by letting you:
- Strategically place your distribution hubs
- Optimize your delivery routes
- Establish end-to-end supply chain visibility and traceability
- Better utilize your fleet capacity
With better supply chain management, you’ll produce fewer emissions and reduce energy, paper, and packaging waste.
Instead of using vehicles that rely on fossil fuels, switch to electric ones to reduce carbon emissions. For example, as part of its Climate Pledge, Amazon revealed its fleet of electric delivery vans to meet its goal of having zero net carbon by 2040.
A fleet of electric vehicles is a hefty investment however, so this option may not be for everyone. Nevertheless, you can start small with one or two alternative energy vehicles and expand from there.
Wrapping up — Strengthen your logistics with sustainability
Sustainable consumption is a rising trend among consumers, and they expect businesses to follow suit. With eCommerce’s massive environmental footprint, industry players will have to reevaluate their business models to adopt more eco-friendly practices.
It may seem overwhelming, but the pros far outweigh the cons. For those who are unsure about making such a significant change, cleaner, more efficient logistics is a great place to start. Follow our above suggestions to begin turning your business green.
About the Author
Rachel Go is the marketing director of MyFBAPrep, a nationwide and international network of 3PLs and prep centers, with 50+ warehouses, 5 million+ square feet of operating space, and the ability to reach any US customer (or FBA center) in 1 – 2 days.
MyFBAPrep provides access to strategic warehouse locations and a wide variety of eCommerce services with a single partnership, along with white glove customer service and best-in-class technology. Sellers can send items into a single MyFBAPrep location and let us handle shipment splitting, prepping, packaging, and shipping across their sales channels.
“Our customers choose us because we provide redundancy and access to strategic locations via a single partnership. We offer best-in-class customer service and technology.
Our warehouses work with us because we allow them to focus on what they do best: send large quantities of inventory to Amazon quickly and flawlessly. We eliminate the need for multiple communication platforms and provide the best warehouse platform for FBA prep available today.“
This post is a partner post with MyFBAPrep.