Why the future of e-commerce belongs to sustainable brands

Written by
Tipser
Published
November 19th 2020
Reading time
8 minutes

With the fashion industry on track to be responsible for 25% of the world’s carbon footprint by 2050, it’s obvious that e-commerce needs to be leading the charge on a move towards more sustainable business practice. The majority of the world’s leading nations are now committed to achieving a carbon-neutral footprint in the next 30 or 40 years. But what does this shift mean for brands and in particular the e-commerce industry?

How brands should think about sustainability

Being part of the e-commerce ecosystem means we have to take sustainability seriously. With our technology we have the power to enable commerce on any surface, and online consumption has a big environmental impact. For that reason, we really want to encourage ourselves and our partners to make the right decisions regarding sustainability.

Sustainability is about more than striving for a carbon-neutral footprint or using recycled materials. For businesses, sustainability needs to be approached from social, environmental, and economic perspectives.

  • Social sustainability focuses on the whole supply chain and the wider community in which a product is made.
  • Environmental focuses on an organisation’s environmental footprint and all of the steps that can be taken to reduce this.
  • Economic sustainability means that businesses need to find ways of growing without compromising long-term environmental and social sustainability. Circular business models can be an example of economic sustainability.

Sustainability drives growth

A recent Nielsen survey found that over 70% of consumers would change their consumer habits to impact the environment positively.

Data compiled by NYU Stern’s Center for Sustainable Business found that in 90% of different product categories, brands that marketed themselves as sustainable would outperform traditional counterparts. It’s hard to imagine that this trend would reverse.

Consumers are concerned about environmental issues. Especially about the unfolding effects of global warming, and this concern is reflected in their buying behaviour. While consumers are not suddenly relying on environmentally sustainable produced goods, there is a noticeable shift in both consumption patterns and investment.

Price plays a significant role in purchase decisions, but if a brand offers a sustainable alternative, people will choose it over the regular product. And this trend will only get stronger going forward.

Consumers are not the only group interested in sustainability. Forbes reports that more VC capital is funneled into fashion projects which are designed to be less harmful to the environment, which means it’s good for attracting investment as well.

Consumption behaviour shifts with generations

When it comes to embracing sustainability efforts, brands sitting on the fence should note that the Nielsen survey found that 90% of millennials aged 21 to 34 are willing to pay more for environmentally friendly or sustainable products. This makes it an overwhelming majority of current and future consumers.

Over 50% of this demographic said that they would forgo another brand to buy one they consider more environmentally friendly.

Taking this knowledge into consideration, it is now the time for brands to act and adjust their business models. To ignore the concerns of the younger generations can lead to backslashes in the upcoming years.

Successful brands make the customer the hero of their own story

Price and ease of purchase will always influence decisions, but the data suggests that consumers do want to make sustainable choices. Brands can take this knowledge and act as leaders, guiding their customers in a future of greater environmental awareness.

Brands who make sustainability about themselves miss a critical point that always holds true; people want to be the heroes of their own story. This is even more pertinent when it comes to sustainability. Instead of making sustainability about you, help your customers be better and do better!

Brands such as Patagonia lead the way and show that placing sustainability at the heart of their business model strengthens their position in the market and helps their customers identify with the brand and an entire social movement.

We have to be more critical about sustainability

Carbon neutrality and sustainability have become badges of honor that brands must be seen to be embracing. Still, there is a danger that some sustainability claims are little more than a cynical attempt at greenwashing.

To avoid making claims about sustainability, that in the end are not based on true impact, is not easy. Many smaller businesses can’t afford to hire qualified engineers or consultants who can make careful sustainability assessments.

But what every business can afford, is to develop a critical mind regarding sustainability claims. Far too many people are happy to accept and share information without checking sources. So building your credibility as a sustainable company starts with source critique. We obviously, need to take be first to follow this advice!

In our next blog you will read in more detail about how e-commerce businesses can tackle sustainability in practice, so stay tuned!

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