Read about the importance of sustainability in e-commerce and how businesses can implement more eco-friendly packing and shipping protocols.
Today, e-commerce plays a more significant role in our economy than ever. The COVID-19 pandemic seemed to accelerate the shift toward online shopping in 2020, but worldwide yearly e-commerce sales have steadily increased since 2014. This trend is expected to continue even as the pandemic fades from headlines, with online sales in multiple industries projected to keep growing through 2024.
While e-commerce is making our lives easier in many ways, it undermines global sustainability efforts and poses a substantial environmental threat. One of the most concerning effects of e-commerce on sustainability is the increasing use of packaging materials to ship products. Along with creating more waste, this trend may accelerate the destruction of trees by increasing the demand for paper materials like cardboard.
Additionally, transporting and delivering all of these goods requires companies to use a greater number of vehicles, most of which are still powered by fossil fuels. Because of this, e-commerce produces a significant amount of greenhouse gas, contributing to climate change and adversely impacting public health.
Fortunately, growing concern about the environment among consumers and businesses has led to a stronger emphasis on sustainability that will likely shape the shipping industry’s future. To prepare for the future and ensure continued success, e-commerce businesses must take proactive steps to make their shipping and packaging processes more sustainable.
For most e-commerce businesses, the best shipping strategy for their online store is the one that’s the most efficient and makes the most money. However, you don’t need to sacrifice profitability for sustainability. There are several ways to improve sustainability that simultaneously tackle efficiency. Specifically, there are several distinct business benefits associated with implementing eco-friendly shipping and packaging practices.
Benefits of Eco-conscious Business Practices
Integrating eco-friendly practices into your business strategy can offer a wide range of benefits. Reducing your business’s environmental footprint can positively impact the fight against global issues like pollution, climate change, and resource depletion. You can set a positive example, leading other organizations to do the same. It can also help you save money, build your brand, and improve the efficiency of your operations.
As awareness of environmental issues has grown, sustainability has become a major concern for many consumers. According to a 2020 consumer sentiment survey, 60-70% of U.S. consumers said they would pay more for a product that used sustainable packaging. For businesses, this means committing to sustainable products and practices that can build customer loyalty and increase revenue.
Recruiting and Retention
In addition to being a prominent issue for consumers, sustainability is also a priority for a significant portion of workers. In 2022, around 70% of employees and job seekers reported that sustainability programs make employers more appealing. In a competitive labor market, this can help employers attract and retain a more motivated and skilled workforce, comprised of people who share their brand values.
Engaging in unsustainable business practices can damage your brand’s reputation over time, but it can also increase your risk of a surprise public relations scandal related to your environmental impact. In many cases, these scandals can attract negative media attention that may seriously harm a business’s recruiting and customer relations efforts.
Additionally, dealing with such a scandal can cost you directly by forcing you to divert money, labor, and attention away from your core business. Implementing and adhering to sustainable practices before a scandal occurs helps minimize risk and protects your organization’s resources and reputation.
Costs of Eco-Friendly Packaging and Shipping
Though more e-commerce businesses across industries recognize the benefits of eco-friendly shipping and packaging practices, many leaders are still concerned about the initial costs of switching to more sustainable methods. While becoming more sustainable requires an initial investment, implementing green shipping and packaging practices can save your business money over time.
For example, switching to green packaging methods can reduce the amount of material needed to pack and ship each item, which can help you save money when purchasing these materials. Additionally, many types of green packaging materials are lighter than more traditional ones, allowing you to save on your total shipping costs by reducing the weight of each package.
Throughout their lifecycle, sustainable materials tend to have a more minimal impact on the environment. Because of this, products made with these materials can be produced with less energy, and disposed of or reused more efficiently when they reach the end of their usable life. In the long term, investing in green packaging and shipping can yield significant financial returns and enable you to reduce your business’s impact on the environment.
Best Practices for Eco-Friendly Packaging
If you’re considering switching to eco-friendly packaging materials, it’s important to plan carefully and make sure that your implementation strategy fits your organizational needs and goals. Efforts to become more sustainable can backfire if you don’t have the right information. There are several things to keep in mind to ensure the success and profitability of your green packaging initiative.
Recyclable, Reusable, and Biodegradable Compostable Materials
The primary consideration for eco-friendly packaging is the type of material you’ll be using. A significant portion of all packaging is still made from materials that are not fully biodegradable, like plastic, making it a major contributor to pollution around the world. In fact, 40% of all plastic produced globally is made for single-use packaging.
To avoid adding to this problem, it’s essential to use packaging that incorporates recyclable, reusable, and biodegradable materials that are safe and responsibly sourced. Single-use plastics, polystyrene foam (styrofoam), and microplastics should be eliminated whenever possible, as these materials contaminate soil and water and cause serious long-term damage to ecosystems.
On the other hand, several sustainable materials can be just as durable, secure, and cost-effective. All the while, users don’t have to worry about polluting the environment. One of the most widely used is corrugated fiberboard, an alternative to traditional cardboard that’s made from mostly recycled paper and does not contain bleaches or dyes. Corrugated packaging is highly renewable and is recovered from the recycling process more than any other packaging material.
There are also some revolutionary alternative materials derived from unconventional sources. For example, packaging material made from mycelium has been developed as an alternative to traditional plastics. Also called ‘mushroom plastic,’ this material breaks down naturally after use and can be made cheaply with minimal processing.
As an additional sustainable alternative, bioplastics are a category of plastic-like materials made from renewable biomass sources, such as vegetable oils and starches, rather than fossil fuels. Unlike conventional plastics, these materials are biodegradable in most cases, and can be recycled naturally through biological processes.
Even if you use environmentally-friendly materials, your business’s sustainability efforts may still be compromised if your packaging methods aren’t designed to minimize waste. Optimizing your packaging strategy to prevent waste can help you save money, reduce your environmental impact, and fulfill your orders more efficiently.
One of the most common ways to reduce waste is to eliminate excess packaging. While many businesses prioritize secure packaging as they prepare their client’s orders for shipping, using too much unnecessary packaging can increase waste without providing any practical value for the business or the client. To avoid this, you should use only enough packaging to keep a product safe as it’s being transported to the consumer.
For some items that are already secured in their own packaging, it might be worthwhile to consider shipping them ‘in their own container’ rather than replacing or adding to the existing packaging. If feasible for your business, shipping pre-packaged items as they are can save you a significant amount of money, time, and materials.
When minimizing waste, ensure you’re shipping items in the smallest possible box needed to keep them secure. Along with creating more trash, packing and shipping orders in oversized boxes can waste transportation and storage space, drive up shipping costs, and create unbalanced loads that increase the risk of accidents.
Best Practices for Green Shipping
E-commerce shipping is a major source of emissions around the world, and this is likely to stay the case as the industry continues to grow. To help address this issue, any businesses that sell goods online should consider implementing more eco-friendly shipping practices.
While it will likely require some reorganization, making your shipping methods more sustainable can greatly benefit your profits and brand. Not every strategy will work for every organization, but there are several green shipping best practices that all e-commerce businesses should understand.
Consolidating Orders Into Single Shipments
In many cases, e-commerce customers will order multiple items to the same shipping address at the same time. If these orders aren’t handled correctly, multiple delivery vehicles may need to make trips to the same house over a short period, which can create a significant amount of unnecessary pollution. However, these issues can be mitigated through order consolidation.
Order consolidation is sending out several items from the same order in a single shipment. In addition to reducing shipping costs and fulfillment times, consolidating orders can improve customer satisfaction by ensuring that buyers receive their complete order in one delivery, rather than waiting for some items to arrive later.
When delivering packages to multiple e-commerce customers, the efficiency of your driving route can substantially impact your bottom line. This is especially true for e-commerce websites offering last-mile delivery, as they must transport orders directly to their customers’ homes. While highly advantageous for customers, last-mile delivery can complicate the fulfillment process for businesses.
To reduce their environmental impact and support efficient deliveries to all customers, e-commerce businesses must optimize their driving routes to avoid waste and maximize the number of orders they can fulfill each day. Creating an optimal route can help you keep your customers satisfied with on-schedule deliveries and avoid producing unnecessary emissions.
Return shipments are a major source of e-commerce-related pollution. Retail return rates have increased as online shopping has grown in popularity. From 2020 to 2021, the average retail return rate jumped from 10.6% to 16.6%, fueled heavily by rising e-commerce sales. As e-commerce returns become more frequent, retail inventory management will become more important for businesses.
There are several ways to implement a more sustainable return policy for your e-commerce business. One such method, omnichannel delivery, gives customers multiple options to return products, including bringing them to a nearby store location (if one exists) rather than shipping them back to a centralized warehouse.
It is also highly beneficial to combine multiple return orders into the same shipment, similar to how you would consolidate deliveries to customers. Doing this instead of shipping returns individually can help you substantially reduce emissions by completing the same number of returns in fewer trips.
Use Ground-based Shipping When Possible
While everyone loves next-day delivery, a significant environmental impact is associated with faster shipping methods. Fulfilling next-day shipping orders gives e-commerce businesses far less room to be efficient, as they must keep more vehicles in service at once, and will likely have fewer opportunities to consolidate shipments.
Ground-based shipping is considered a much more sustainable alternative to expedited or next-day shipping. Switching to ground-based shipping can reduce the emissions created by delivery vehicles. Although it is slower, customers may be incentivized to choose ground-based shipping because of its lower cost, or because of their own environmental concerns.
Just as technology has brought about the rise of online shopping, it has also given businesses new tools to manage their e-commerce orders more effectively. Tracking your orders and inventory can be very tedious, especially as your business grows.
However, using the right technology can help you save money, operate more efficiently, and reduce waste within your organization. Integrated tools like enterprise resource management (ERP) software can help businesses streamline essential processes and consolidate important information into a single platform.
There are a variety of specialized ERP software programs with features designed for businesses of different shapes and sizes, including inventory management systems for warehouses that offer features like automated purchasing and vendor management, and small business inventory software created to meet the needs of growing organizations.