The discussion around sustainability in e-commerce has long focused on topics such as packaging materials or logistics emissions. Yes, packaging materials are both a choice and an expense, and the last mile is tricky both economically and in terms of carbon emissions.
However, sustainability data in e-commerce is more than just the recyclability of packaging materials or a single aspect of logistics.
The thinking around sustainability and the associated data in e-commerce is still new in the industry. Similarly, regulations are being formulated, and online stores are preparing for changes in product cards and the Accessibility Directive. But in addition to these, we predict the following trends and briefly examine the sources of sustainability data in this blog.
What we base our thinking on
The data sources for online stores must be built and linked to the UN's Sustainable Development Goals in the same way that companies' sustainability strategies are built - data needs to have a framework and a place there. The data must also meet ESG requirements and match the certifications gradually becoming established in the industry, of which B-corp is gaining the most popularity. The data must also be closely linked to business operations, preferably owned by the online store itself, 100% accurate and thus transparent, partly already communicating to all stakeholders of the online store.
What does Woolman talk about when we are currently building sustainability data dashboards and insights for online stores?
- Conscious product purchases (includes returns)
- Product use
- Customer behavior and customer dialogue
- Logistics & transportation emissions
- Deviations (Sustainability, profitability, world changes)
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Inventory management
And all of these are also key elements of emission calculation as well as profitability in an online store.
In the future, transparency and verification will be demanded from online stores that the purchase made from them is a c o n s c i o u s one. In practice, this means that the product information provided to customers has been sufficient, advertising has been targeted ethically and socially correctly, possible dialogue has been verified with the customer, payment methods and choices are sustainable, and the product remains and is used by the customer instead of being returned or exchanged.
The theme of conscious purchasing is closely related to returns in e-commerce, which is no longer just a quiet challenge within the industry. The institutional language of Sweden makes a point of listing new, official words in the dictionary. They raise topics for discussion, and in 2022, the word "return abuser" or "return addict" was added. So the idea of conscious consumption has become more important than ever. It is not just about buying products that are environmentally friendly or socially responsible, but also about ensuring that the entire product life cycle is taken into account. This includes everything from the manufacturing process to the return process.
Improving the product life cycle also starts with data
Product life cycle management is an essential part of conscious consumption. It involves monitoring the entire life cycle of a product and making sure that it is produced sustainably, used for as long as possible, and disposed of in an environmentally responsible way.
One way to extend the life of a product is through proper maintenance and repair. This not only reduces waste but also saves money in the long run. Monitoring and reducing returns is another important aspect of conscious consumption. By minimizing returns, businesses can reduce waste and the environmental impact of their operations.
Properly dimensioned manufacturing is also essential. This means producing only what is needed, and not overproducing or underproducing. It helps to reduce waste and saves resources. Manufacturing as needed is another important strategy for sustainable production. It involves producing products only when there is a demand, instead of mass-producing and then trying to sell them.
In conclusion, conscious consumption goes beyond just buying products that are environmentally friendly or socially responsible. It is about considering the entire product life cycle, from manufacturing to disposal.
Product life cycle management, prolonging the use of the product, monitoring and reducing returns, properly dimensioned manufacturing, and manufacturing as needed are all essential components of conscious consumption. By adopting these practices, we can all play our part in creating a more sustainable future.
Data provides online stores with the opportunity to manage and report on this "conscious purchasing," enables business decisions related to it, and is the only way to transparently communicate about it in the future.
The Hot or Cool Institute published the first study at the end of 2022, in which figures were declared for sustainable purchases in the clothing industry. The study found that only 2% of consumers bought 100% sustainable clothing, but 48% wanted to buy more sustainably. This indicates that sustainable purchases are still at the beginning of the journey, and there is plenty of room for improvement.
In today's business landscape, companies are increasingly focused on sustainability and corporate responsibility. One way to meet these goals is through the collection and analysis of data.
Which themes should you start with e-commerce companies?
Product usage
Sustainability goes beyond just purchasing products. E-commerce companies must think about how they can collect data on product usage to make better decisions regarding product development and life cycle management. As the responsibility for a product's life cycle shifts more to sellers, understanding how a product is used is critical to business development.
Customer behavior
One of the most valuable sources of sustainability data is customer behavior. E-commerce companies need data on how customers interact with their websites, products, and content to make informed business decisions. Data on customer behavior can also be used to design products that align with their values and preferences.
Logistics and transportation emissions
Logistics and transportation emissions are major sources of carbon emissions for e-commerce companies. Understanding the carbon footprint of transportation and logistics is critical to designing sustainable business practices. E-commerce companies need reliable, accurate, and complete data to measure and reduce their carbon footprint. This includes data on zero-party, or first-party, data on inventory management, as well as data on third-party logistics providers.
In summary, sustainability is an important consideration for e-commerce companies, and data plays a crucial role in driving sustainable practices. Companies should focus on collecting data on product usage, customer behavior, and logistics and transportation emissions to create sustainable business practices that align with their values and goals.
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Want to learn more?
Read: The intersection of data and sustainability in commerce: Why businesses must focus on both in 2023