22.5 C
New York
May 29, 2024
NewsAltitude
Business TOP STORIES

How to Make Your Ecommerce Business Truly Sustainable (and Why It’s Important)

How to Make Your Ecommerce Business Truly Sustainable (and Why It’s Important)

Opinions expressed by Entrepreneur contributors are their own.

The main advantage of ecommerce is convenience. You can browse merchandise from the comfort of your home, compare offerings without running from store to store and get what you want delivered where you want it. However, to keep enjoying this convenience, we must make it more sustainable.

The importance of sustainability has long been recognized across industries. Yet, many obstacles delay transitioning to more sustainable practices. Advanced data collection and analysis technologies bring hope that green ecommerce is achievable and can even boost business profitability.

Related: 7 Strategies Businesses Can Use to Be Profitable and Sustainable

Sustainability — honest goal or greenwashing?

Most growing businesses profess their commitment to sustainability. It shows awareness of the general consumer behavior trends. For example, the internet search for sustainable goods has grown by 71% over the past five years. However, does this mean an actual change in how products are produced and delivered?

Greenwashing — presenting a business practice or product as more environmentally friendly than it is, has been around for decades. Jay Westerveld, who coined the term in 1986, warned of evolved greenwashing practices as the Earth Day marketing campaigns of 2024 were approaching. According to him, understanding these new forms of greenwashing is especially important now as AI’s power of disseminating information is growing fast.

While AI does present a new set of challenges, today’s consumers, especially the digitally native generation, are definitely capable of digging deeper. The growing number of sustainability-related online searches shows consumers are willing to investigate products rather than rush into buying decisions. Thus, even putting aside ethical and environmental concerns, businesses need to honestly reach for the advertised sustainability goals to keep attracting customers.

Instead of utilizing AI to disseminate half-truths, brands can use such solutions to gather hard facts that help make sustainable ecommerce profitable. A few focus areas are critical for online vendors meaningfully committed to this goal.

Minimizing overproduction with demand forecasting:

Consistently producing much more than selling usually means bad business. Even when overproduction works financially, like for the big players in the fashion industry, production data is kept secret, knowing the reputational damage the disclosure of large-scale wastefulness would bring.

Thus, the most prudent ecommerce strategy is optimizing the supply chain to minimize overproduction. Advanced demand forecasting, especially utilizing ML-based tools, is the most promising way to achieve this.

Many global and local factors affect demand volatility along the supply chain, from promotion and shifting market trends to political events and weather. Many data points covering these and other variables are publicly available online. The key to successful forecasting in ecommerce lies in the ability to extract location-specific public data from diverse sources.

Competitive edge in promoting sustainable products:

Sustainable products might evoke different customer impressions. Some will think of sustainability as a bonus, while others will suspect that some quality features were sacrificed for it. Online vendors need to keep this in mind when choosing how to promote their sustainable offerings in the face of fierce competition.

The competitive edge comes from the very nature of ecommerce, which allows the monitoring of all competitor activity automatically and in real-time. Tracking price changes helps vendors analyze the market for sustainably made products and identify opportunities for offering the best deal. Meanwhile, gathering intelligence on how competitors promote their sustainable offerings will give insight into which customer segments they are targeting.

Implementing reusable packaging:

Packaging choices have a decisive impact on the possibility of sustainable ecommerce. Despite continuous efforts to move towards reusable packaging, economic challenges and uncertainties often curtail its implementation.

As noted by McKinsey’s experts, successfully scaling reusable packaging will require complex research on the economic, environmental and societal factors at play. Projecting necessary infrastructure costs, ensuring that CO₂ emissions and water consumption of the reusability system do not negate its benefits and identifying ways to incite consumer cooperation needs careful planning informed by multifaceted data.

The collected consumer sentiment and market data should represent the different geographic locations the ecommerce vendor covers. Localized research will improve scheduling decisions when scaling the shift to reusable packaging and allow local sustainability concerns to be addressed when promoting it.

Related: Small Packaging Changes Can Have a Big Impact on Consumer Perception and Help You Meet Your Sustainability Goals

Sustainability of data collection

In the case of facilitating sustainable ecommerce with data, the elephant in the room is that large-scale data collection itself requires an energy-intensive infrastructure based on millions of constantly running servers. The optimization of resources and processes made possible by such infrastructures most likely outweigh their negatives. However, industry leaders should take it upon themselves to address the remaining challenges.

In the web intelligence gathering industry, several factors are key to advancing sustainability goals.

  1. Companies can avoid wastefulness by gathering only the necessary data points and using the best, most efficient solutions to reduce errors and retries. While collecting ecommerce data is hard due to the dynamic nature of marketplace web pages, following best practices or seeking expert advice will achieve data goals with fewer attempts. Additionally, it will protect resources by avoiding IP bans and saving memory space.

  2. Automated web data extraction relies on residential proxies. There are millions of user devices connected to the internet all over the world, and thus, they are already consuming energy. Inciting device owners to lease their unused bandwidth allows for the creation of more value through shared resources.

  3. Data centers that would otherwise be decommissioned after serving their purpose are renewed to host proxies for public data collection. This prolongs the life cycle of an already existing infrastructure.

  4. Combining the already available hardware to build reliable and effective web data collection infrastructure reduces the need for companies to build custom solutions. Thus, like a well-functioning public transport system, such infrastructure can be cost-effective to users and help conserve resources.

In an ideal world, which may lie in the future, companies collecting web intelligence and data holders could agree to a free flow of data, foregoing the anti-scraping measures. While these measures lead to a resource-heavy cat-and-mouse of creating and bypassing obstacles to scraping, the best we can do is make sure that our own practices of data collection are as sustainable as possible.

Related: Here’s How to Boost Your Business and Benefit the Planet With Sustainable Data Centers

Shifting to sustainable products and practices in ecommerce is the only long-term option. However, projects that would advance this transition often fail despite honest intentions.

Vendors need time-sensitive and location-specific data to optimize the supply chain and make sustainability financially viable. While gathering data on a large scale can be resource-intensive, organizations need reliable information to avoid wasteful decisions. Finding ways to make data collection infrastructure more effective and sustainable will be decisive for the future of ecommerce.

Read More