Sustainability in E-Commerce

Product Information MANAGEMENT

Sustainability is not just a buzzword – it is an imperative for our future, because we do not have a second earth in reserve! By acting sustainably today, we are safeguarding the needs of future generations. Each of us bears responsibility for a resource-conserving lifestyle, including e-commerce practices. Our article sheds light on how online retailers can fulfil this imperative.

Electricity, packaging material, delivery vans and returns. There are actually so many arguments against a good carbon footprint for online retail. But this impression is deceptive, as the study on the environmental sustainability of online retail in Germany (“OeNO”) published in October 2023 shows. It was commissioned by the Fraunhofer Institute for Systems and Innovation Research ISI on behalf of bevh and with the support of Amazon Germany, Cairo, Rock’n Shop, Skatedeluxe and The British Shop. The study breaks down the overall climate-related environmental impact of online shopping (ordering, digital processing, packaging, logistics, delivery and returns) using greenhouse gas equivalents and also outlines measures for greater sustainability. For these purposes, not only were conventional ordering processes taken into account, but modern e-commerce concepts such as re-commerce, instant delivery and retail-as-a-service were also integrated.

CO2 symbol image for sustainability in e-commerce

According to the Study: One Package is Equivalent to 9 Kilometres by Car

1,421 gram CO equivalents, which is how much a typical parcel delivery to the front door would cause on average. In comparison with a car journey (combustion engine) of one kilometre, this would mean that an online delivery has nine times the emission value and emits as much as a nine-kilometre journey in a combustion engine car. However, the study also shows that the greenhouse gas equivalents of an online order can vary greatly:

  • Worst case: In the worst case scenario, an order would generate 4,426 g of CO after a long search on the desktop PC, unsuccessful transport by diesel (three delivery attempts at the front door) and the use of non-recycled, material-intensive packaging. Together with energy-inefficient logistics and a return with replacement delivery, this would correspond to 30 times the CO emissions of a car kilometre.
  • Best case: In the ideal scenario, an order (quickly found via smartphone in the Wi-Fi network, efficiently delivered to the packing station by electric vehicle and sent in recyclable reusable packaging without returns) would generate 469 g of CO. That would be three times as much as a car kilometre.

CO equivalent (CO₂e) is a unit of measurement and indicates how strongly a gas affects our climate and the greenhouse effect.

The findings shed new light on the possibilities of effectively minimising the environmental impact of e-commerce and offer concrete starting points for a more sustainable design.

Willingness to Pay for Sustainable Consumption on the Rise

Although concerns about persistent inflation had held back sustainable consumption in October 2023, the GfK Sustainability Index rose to 94.2 points in January 2024 (1.6 points more than in October 2023). According to the market research institute, sustainability remains an important issue for German consumers, especially when making major purchases. However, Petra Süptitz, sustainability expert at GfK, points out in the Sustainability Index published in October that many consumers are sceptical as to whether their personal actions actually have a significant impact: “Almost half of the study participants are convinced that it doesn’t help if they themselves act in an environmentally friendly way but others don’t.” Consumers therefore also consider online retailers to be responsible for practising sustainability. So what measures can online retailers take to fulfil the need for more sustainable options?

Opportunities for Sustainability in E-Commerce

Selling in an environmentally friendly way on the Internet is possible. Here we show you options on how you can make your e-commerce sustainable:

  • Web hosting: For your online shop hosting, opt for a green web host that uses green electricity. This step not only demonstrates your commitment to environmental protection and sustainability, but also helps to reduce the CO footprint of your digital business
  • Search queries: Minimise Google searches and be found immediately. Because every Google search causes emissions – 0.2 grams CO equivalents, to be precise. SEO optimisation is crucial here. A PIM system helps you to create SEO-optimised product texts. In addition, with a DAM system on board, you ensure that your visual assets (images, documents, videos, etc.) are accurately indexed and that your products can also be found via image search, for example.
  • Mobile: Optimise your shop for mobile devices too. The use of smartphones for surfing the Internet and for search queries is not only important due to the growing number of mobile users, but also because a search via a smartphone generally consumes less power than a search carried out via a PC. This optimisation not only improves the user experience for customers who prefer mobile shopping, but also contributes to a more ecological and energy-efficient use of the Internet. By adapting your shop for mobile devices, you reduce energy consumption and thus actively support environmental protection, while at the same time increasing the reach and accessibility of your offer.
  • Web performance: Optimise the performance of your online shop by using compressed images to ensure fast loading times. A Digital Asset Management (DAM) system can be invaluable here, as it automatically provides your images in the required formats for various channels. This considerably simplifies the process of adding content to your online shop and also ensures optimum loading times. In addition, high shop performance not only contributes to an improved user experience, but also boosts your website’s ranking in search engine results, which in turn increases the visibility and success of your online business.
  • Images: In online stores, customers first consider the visual representations of the products before they look at the features in more detail. High-quality and appealing images enable customers to make decisions more quickly and thus reduce the need for lengthy online searches, which in turn saves energy. By implementing a DAM system, you ensure that your visual content (images, videos, 3D views, documents, etc.) is not only presented convincingly, but also in the right quality and without any loss of quality. This not only promotes efficient decision-making by shoppers, but also increases the attractiveness of your online store.
  • Supply chains: With the imminent introduction of the Digital Product Passport (DPP), it is essential that your supply chains are transparent and that all related product information is made easily accessible. However, it is not advisable to wait and see, as consumers are already demanding ecological and social responsibility from companies. Therefore, expand the product information in your online store to include details about the origin and production conditions of your goods. By using a PIM system, you can easily add new information categories and update them quickly if necessary. As all data is managed centrally in a PIM system, approved changes are automatically played out to all channels.
  • Packaging: Cardboard boxes are the right choice because they are made from a high proportion of recycled paper. The decisive factors here are the box sizes and fillers, regardless of whether you pack the goods yourself or use a shipping service provider. The carton sizes should therefore be optimised and the filling material environmentally friendly. Compostable packaging or reusable packaging is also conceivable, whereby the latter is folded up and returned to the online shop. Completely without outer packaging is of course the best. This can be realised with Click&Collect, for example.
  • Shipping: You can also act sustainably when it comes to shipping by offering climate-friendly services from shipping service providers. This could be Climate Protect from GLS or DHL GoGreen, for example. GLS offsets greenhouse gas emissions with its service by investing in climate projects and DHL uses electric vehicles with GoGreen to avoid emissions during delivery. However, options such as Click&Collect or delivery to a packing station within walking distance are also conceivable. For door-to-door deliveries, precise information on the delivery time also helps to avoid failed delivery attempts with multiple journeys.
  • Payment options: By working with payment providers who are actively committed to the environment, you are making a valuable contribution to sustainability. Such payment service providers invest part of their revenue in sustainable projects or donate a proportion of the transaction fees directly to environmental initiatives. This practice not only promotes environmentally conscious behaviour, but also enables customers to make a positive impact when shopping online. The choice of these payment providers emphasises an online store’s commitment to environmental protection and strengthens its image as a responsible company that thinks and acts beyond its own profits.
  • Returns: Returns not only harm the environment, they also cause effort and costs. Unfortunately, they cannot be avoided in the case of incorrectly delivered or damaged goods, but they can be avoided during the selection process. Therefore, make sure that your product descriptions are correct, complete and meaningful. This is the only way you can avoid incorrect purchases or multiple orders and ensure that the product delivered matches your own requirements. Imagination and reality must therefore be very close to each other in order to minimise returns. A combined system of PIM and DAM enables you to efficiently provide both the product information desired by consumers and appealing visual content in your online shop.
  • B-goods: Returned products are often in perfect condition, as in many cases they are sent back because they do not meet the buyer’s expectations or expectations, but not because of defects. Destroying these items would not only be a waste of valuable resources, but is also in direct contradiction to sustainable business practices. A sensible alternative is to recondition and resell these goods as B-goods. This approach not only helps to counteract the throwaway culture, but also minimises the problem of product shortages by reintroducing products that have delivery problems or would otherwise remain unused back into the sales cycle and generate profit.
  • CO2 compensation: By offering CO compensation, you can give your customers the opportunity to actively contribute to environmental protection. This can be done by integrating an option in the checkout process that gives customers the opportunity to offset the CO footprint of their order. This compensation often takes the form of investments in environmental projects such as reforestation, renewable energies or emission reduction initiatives. Such an offer not only promotes more sustainable consumer behaviour, but also raises your customers’ awareness of the environmental impact of their purchases and demonstrates your online store’s commitment to climate protection. This proactive attitude can strengthen customer loyalty and help you to position yourself as a responsible player in the market.

Final Thought: Sustainability in E-Commerce

In addition to the approaches presented above, the sustainable orientation of an e-commerce business also includes offering ecologically, fairly and sustainably produced products. Supporting local producers to reduce transport routes is particularly valuable. However, the consistency of internal processes with the values communicated to the outside world is also crucial for the authenticity of sustainability efforts. In e-commerce, physical products are represented by data, so efficient digital data management is essential. Paper-based reconciliations or the management of product data in different systems are at odds with a sustainable business model. An integrated system such as OMN offers a solution by increasing the efficiency of work processes while minimising the consumption of resources.

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