Innovations that Make Ecommerce More Environmentally Sustainable
In the age of climate change, ecommerce currently has a troublesome impact on the environment. At the same time, consumers are getting used to the ease and convenience of online shopping and home delivery. Given that online retail is here to stay, how can we use technology to ease our industry’s environmental footprint to create a more sustainable ecommerce experience?
As a retailer that packages and ships a physical product, your business operations can have a big influence on the trends that make or break this cycle. In this episode of Recommerce, Sara and Nicole, discuss exciting innovations that hold the potential to change the relationship between ecommerce and Mother Nature. You’ll learn:
- Ideas you can implement today to lessen your company’s environmental impact;
- The results of a study at the Massachusetts Institute of Technology about communicating environmental impact at checkout;
- How environmental improvements can increase retailer profits, too;
- Ways to improve packaging for greater sustainability; and
- Examples of merchant-specific solutions available now online.
Note: At minute 20:05, Nicole gives an example of a credit and discount scenario. She starts the example with a $50 credit. She meant to say $100 for the credit. If you start the example with $100 credit, then the math is correct. Thank you.
Full Episode Transcript
Sara: Welcome back to another episode of Recommerce. I’m Sara, the founder of Command C, and I am here with Nicole Reed, our sales and marketing manager. Hi, Nicole.
Nicole: Hi there, Sara. Happy to be here.
Sara: Likewise. So today we’re going to talk about sustainability in ecommerce. Sustainability is a big topic, and I want to start off by defining what we mean when we talk about sustainability. Sustainability is one of our company values. When we talk about it internally, as a company, we’re referring both to social and environmental issues. Really those two things can’t be separated. However, in today’s conversation, we’re going to focus on some of the most pressing and innovative approaches to environmental sustainability that we’ve been talking about and seeing recently. Our goal is to spur some ideas and inspiration that ecommerce retailers can implement now. So these aren’t “pie in the sky” future possibilities, these are literally things that you can implement today with your team.
Nicole: Sounds great, and I think another thing to add to the definition of sustainability is thinking about economic sustainability. Your business has to be economically viable to be able to make the sustainability efforts that we’re going to be talking about. So that’s just one thing we want to, we are really approaching this from a business perspective.
With that in mind, let’s talk about millennials. They are still the largest demographic with disposable income in the United States. I think it’s also important to mention millennials kind of still sometimes get thought of as the kids fresh out of high school, and that’s not the case. We’re talking about millennial as a generation starts in 1980. So we’re talking about people who will be 40 next year. You may know some.
Millennial shoppers often ask questions and make decisions based on a company’s involvement with environmental sustainability.
Sara: If you’re lucky.
Nicole: Right. So these are people that are well into the workforce, they have disposable income, and they are very concerned about issues of environmental sustainability. In fact, studies have shown that they ask more questions and make more decisions based on a company’s involvement with environmental sustainability. So beyond the fact that climate change is here and it’s real, you can make the business case for considering ways to make your ecommerce operation more and more sustainable.
Sara: Yeah, great points. This is such a big topic. So in strategizing about how we’re going to kind of tailor our conversation, we came up with two kind of main categories to focus on in segment one and segment two. So first we’ll be talking about shipping and packaging, and then when we come back after the break, we’ll talk about product innovations.
Nicole: Okay, that sounds great. So yes, so first to shipping and packaging. This is an area where you can have a ton of impact, both positive and negative depending on how you’re handling it, and we’ve seen some really cool and innovative ideas in this area recently. One that’s been on my mind lately has to do with shipping speeds.
Sara: Oh man. Our consumer addiction to faster and faster shipping, unfortunately, is a huge issue with major environmental consequences.
Nicole: Yeah, that’s indeed the case. So one of the things that we’re really seeing is that the faster something needs to be shipped, what that means on the merchant side is it means that the merchant has less time to optimize for efficiencies. So the consequences of this are multiple. So first, to get your product, so let’s say you place an ecommerce order. For that retailer to get your product, if you’ve said like two-day shipping, as fast as you can get it here shipping, that product may very well be sitting in a warehouse far away from you. Now it needs to come to you quickly, which generally means that it’s going to be retrieved from that warehouse far away from you by an airplane rather than a truck. Now, that depends a little bit on the size of the retailer, but the gist is that flying around in an aircraft is about eight times more energy intensive than it is to drive around in a truck.
The faster a product needs to be shipped, the less time a merchant has to optimize for efficiencies.
Nicole: So, it’s like once you, if you hit that stopwatch of get it here as fast as you can, it’s like you kick into motion a lot of high energy intensive forms of transportation in the shipping.
And also because there’s so little time given to the process, vehicles are often dispatched for delivery before they are full. So that means that they’re trucking around with fewer packages and adding on the miles to get all the packages to where they need to go. So it’s a lot of half … The glass is half empty and the truck is half empty. Let’s try to find a better way. Then the other thing about it is that instead of the merchant having to wait for products that are in various warehouses to arrive at the same place, because there’s that pressure to get one specific product to one specific customer, packages are being sent out separately, and that means a lot more packaging.
Sara: Yes. Wow. It’s a real problem, and we’ve been seeing some really innovative ways to combat these issues recently. So back in the day, before we were an ecommerce company, and we were mostly building WordPress sites, we had this phrase, an idea called the “guided path experience.” The idea is still around today, but we use different language. But essentially you’re intentionally guiding users to high priority areas of a website through subtle or not-so-subtle design cues.
You can guide your shoppers to more environmentally-friendly options through design cues.
Today we tend to hear the phrase “nudging” used more frequently, but the idea is pretty similar. You’re kind of trying to get the consumer to do what you want them to do on a website, while still kind of presenting them with all the options. So, say that in your checkout you have two options for shipping: standard shipping and two-day shipping. The nudge in its simplest form would be to have the standard shipping option selected as the default.
There was this really interesting study done at MIT recently where they tested a very large retailer site by showing customers how many trees they’d save, or not save, depending on which shipping option they selected. This was presented right there next to the shipping option.
Nicole: Right at checkout.
Sara: Right at checkout, right along with whichever option they selected. Once they were shown that information, 52% changed their mind about their shipping choice. This is a staggering number. It goes to show that there are really simple things that merchants can implement that make a huge difference and empowers the consumer.
Nicole: I love that. I love that because it’s also just, I really love the idea of technology working to solve the solution, and that’s such-
Nicole: A simple technological feature is just communicating with the customer what the impact would be. It’s interesting, in just thinking of that experiment at MIT, I mean, I don’t know, I’ve never actually, I can’t recall a time where I’ve actually seen that on an ecommerce site, and that would definitely be something where I’d go okay, maybe I don’t need this toothpaste by the end of the day.
When shoppers were shown the impact of shipping speed, 52% changed their mind about their shipping choice.
So yeah, that’s really interesting to say, and it also makes me think about all sorts of creativity with that. I would think that would also start to save merchants some money. In terms of just all those inefficiencies that I just described are pretty costly for a retailer. So when you start optimizing the shipping process, then think about maybe what you could do to as far as like donating to an environmental organization you think might partner well with your company or something like that. I mean it’s just really interesting to think of different ways that that money could be used, and then also communicate it back to the customer like, hey, because you’re getting that shirt in five days rather than tomorrow, we’re going to send $5 to an organization that we think you’ll agree is doing really good work.
Sara: Carrots, it’s all about the carrots. Tons of room for creativity here, and I thought that tree example was just so fun. It just, it adds this element of fun, and hey, I’m doing good to the experience.
Nicole: Absolutely. There’s all sorts of creativity that hasn’t even really been explored yet. But another thing that we’ve been thinking about is ways you could almost just offer like a light peer pressure. You know how when you walk down, I live in Brooklyn, and I walk down the street and I see myself and neighbors get boxes throughout the day.
Well, what if those boxes were colored in a particular way? If you did choose the more environmentally friendly packaging let’s say, or shipping method, what if that five-day shipping box came in a green box, and then it just says out to your neighbors like, “Hey, I bumped it down a little bit and I’m helping the environment in the process.”
Nicole: It’d be cool to see something like that.
Sara: Feel good ego stroke right there, yeah, absolutely.
Sara: So shifting gears a little bit, another thing that I’ve been reading up on is Amazon’s whole frustration-free packaging initiatives. This is a multi-pronged initiative. One of the components of which really I found really interesting is their idea of “romance packaging.” The case that they make is that in a brick-and-mortar store, fancy product packaging goes a much longer way in creating the sale than it does online. Whereas online, not only are you dealing with limited real estate depending on the device that’s being used, and we all know what’s going on with mobile sales. So if we’re talking about a mobile device, we’re talking about extremely limited real estate. Online, a fantastic photo of the product itself, like a package free photo of the product tends to go a lot further than the product packaging. Online consumers aren’t reading product labels – they’re seeing that in the product description or the specifications. They’re not getting that from the product image, which is the equivalent of picking up a product in a store and turning it over and reading the label, right? So you have this option online to kind of get rid of the packaging in a way because it’s not playing the same role that it plays in a brick-and-mortar store.
Nicole: That’s a great point. Yeah.
Sara: And similarly along those lines is the notion of packaging size. So the examples that they use are household products, right? A bottle of laundry detergent or a bag of chips, right? I mean, I just think about how many times as a kid I opened this huge bag of chips and it was like, why are there four chips in this massive bag, right?
Nicole: Common complaint.
Sara: Because it’s all about the size of the packaging. It’s all about kind of the illusion that the packaging is creating about how much you’re going to get. Well, online that doesn’t work, that doesn’t apply in the same way. So again, the emphasis online is more about product reviews and can be about the concentration and the quality of the product rather than the size of the packaging. So I mean, I was just really compelled by these ideas and I’m excited to see them in motion.
In physical retail, there’s the illusion that the packaging shows how much you’re going to get. Online that doesn’t work.
Nicole: I like that a lot. It reminds me, I recently purchased a swimsuit online, and it came in an envelope that looked like a letter from a friend, you know? Just a small little envelope. Unfortunately, the suit didn’t quite work out and I returned it, and I just was able, they told me to just return it in that same small envelope.
Nicole: I think there’s things like this, like encouraging customers to send back returns in the same packaging, which is what I just experienced, or maybe providing a discount on waiving the option to return it at all. So you get rid of that impact of a return altogether. That could be an option too. So there’s just all sorts of creative ways to start merging environmental sustainability and ecommerce together.
Sara: Absolutely. I can tell that our creative juices are going, but we should probably take a break and come back and shift into the next segment.
Nicole: Okay, great.
Interlude: You are listening to Recommerce, a podcast for ecommerce wearable brands navigating technical complexity and change, brought to you by Command C, a development team that saves ecommerce retailers from outdated tech and ineffective operations, with a strong focus on Magento and Shopify Plus. You can learn more about how we help at Commandc.com.
Sara: All righty. Shifting our conversation away from shipping and packaging, let’s talk about other kinds of merchant-specific or product-specific innovations.
Nicole: That sounds great. Yes, I’d like to talk about some themes around the idea of product recycling. One of the latest developments is a very cool innovation from one of our clients, Tom Bihn. Tom Bihn makes really beautiful bags out of Seattle, Washington, and they have a massive following. I mean, people love their bags.
So they have a page on their site that they just added recently, it’s for DIY enthusiasts, so people who are making, crafting their own projects at home, and the page is where you can send them an email and ask for free scraps from their bags. They have a pretty iconic print on it, people who know the bags love the bags. So it’s just a really cool simple way to reuse the waste, and it’s like I said, it’s very simple. You just send in the email. It’s funny, they have a Q&A and it says, the very first question is yes, or, “Will you send these to us for free?” And they’re like, “Yes, we are sending you these scraps for free.” So it goes to show how sought-after they are.
Sara: Yeah. Cool. That reminds me of Patagonia. Don’t they have an initiative called like Worn Wear or something?
Patagonia’s Worn Wear initiative not only extends the lifespan of their products, it increases customer loyalty, too.
Nicole: Yes, exactly. So Patagonia is doing a super cool thing where they have a whole segment of their site that is essentially a Patagonia reseller. So it is used Patagonia clothing that’s been repaired and it’s available for a little bit of a discount on the Patagonia site. They also, they’ve really developed a whole culture around Worn Wear. They have events around the world where people get together and repair their Patagonia gear and this kind of thing. So I think that’s a really great example of customer loyalty through an environmental initiative.
Nicole: They’re just doing a great job on that.
Sara: It also reminds me of kind of what you were talking about for the first segment about being a successful business and being able to leverage that success towards these really cool sustainability efforts.
Nicole: Exactly. The other thing I love about it that is just this idea of technology is making all this possible. A whole segment of this website, the Patagonia website is dedicated to Worn Wear, and it has all the mechanisms of a great ecommerce site. So it’s just using the technology we have to really solve some big problems. So I’m just really excited about this whole aspect of ecommerce.
Now we can use technology to solve some really big problems.
Nicole: Thinking also about the technology side of things, there’s a company called Cuyana, and they have what they call the Lean Closet. With the Lean Closet, what you do is you go to the Cuyana website and you activate a shipping label, and then you print out that shipping label, you fill a box full of clothes in good condition. So these are clothes that like, ah, it didn’t really ever fit, or the color is not right, or something like that, but it’s clothes in good condition.
Sara: Clothes from your closet.
Nicole: Clothes from your closet, exactly.
Sara: Got it.
Nicole: I would send in stuff from my closet. I dare say I’ve got a few pieces that, yeah, they could go into this, they just … I hang on to them, who only knows why, but they should go somewhere. Then I send them in and the box gets processed by Cuyana, and they process the box. They have partnered with another site called thredUP, and thredUP, some of our listeners may know it. It’s a really popular online thrift store. So when Cuyana processes my clothes let’s say, they then give me a thredUP credit. So that thredUP credit is good in the Cuyana store for me to buy more clothes from their store, and then it’s also, they add 15% to that. So let’s say they look at my box and I get $100 let’s say, well then I would be getting another $15. So now I have a $115 credit to the Cuyana store. So pretty cool.
(NOTE: In the podcast, Nicole gave $50 as the example here. She meant to say $100 as the example. The math as stated is incorrect.)
Sara: There’s also this idea of made-to-order, where merchants are being mindful of creating just the right amount of a product. I know Fame and Partners is an example of this.
Nicole: They’re just my favorites. Yes, I just love Fame and Partners. So they are a clothing retailer. They have collections very much in the traditional sense, like a new collection, collection of dresses, a collection of suits and pants, or whatever that may be, but they have extensive customization for each product on their site. I’d also really like to point out, the UX of their site, it’s really easy to customize. If it’s a gown, for example, maybe you want it to have, it has spaghetti straps and you want it to have a wider strap, or maybe it has a slit down the middle and you’re like, maybe I’ll close that slit. You can do all that kind of things. You can play with hem lengths and this kind of thing. So it’s a really fun site to navigate.
Fame and Partners sells made-to-order clothing online. Their approach reduces excess inventory.
I really recommend people check out fameandpartners.com, and the thing that’s cool about it too is that, so you’re getting a garment, it’s been customized to your liking, there’s also fitting tools and things like that with the site. So you get a garment that’s been really tailored for you. They are making customized made-to-order clothing. So the idea then being that you get it and it’s pretty assured that it’s going to work. They put the work in on the front end to make sure that it works by the time you get it. If for some reason it is a little off, they give you a $50 credit towards alterations. So I think that’s really cool. Then if for some reason it just really doesn’t work and you need to return it, then they charge a $35 zero-waste fee. Their point is just that they’re not doing bulk inventory, they don’t want to have any inventory back in the closets. They’re really, that fee is almost like a little a discouragement from returning. You just want to make sure you do the customizations and the alterations to get it exactly as you want. I just think it’s a great model. I think it’s a really wonderful model for the future, and also like I said, the whole way the site works is just, it really feels like this is the future of fashion.
Sara: Yeah, and then, of course, your companies like ThirdLove and Casper that donate returned items that they otherwise couldn’t resell.
Sara: Again. It’s like I just keep coming back to this idea of using technology and creativity together to make ecommerce more sustainable. I’m so passionate about that whole idea and that topic and would love to keep vibing with you-
Sara: For the rest of the day, but we’re running out of time. So we hope this conversation sparked some ideas that you can take and implement and great chatting with you, Nicole.
Nicole: You too, Sara.
Sara: Talk to you soon.
Nicole: Great. Thank you.