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sustainable business

What does it take to be a sustainable business?

The COVID-19 pandemic has forced consumers to adopt new habits, with a PwC report suggesting these are set to become permanent, representing a ‘historic and dramatic shift in consumer behaviour’. The report concluded that consumers had evolved to be more digital and eco-friendly, while also reporting they had become more price-conscious, healthy, and data aware. Following on from COP26 and in light of the latest IPCC report declaring the climate emergency as a ‘code red situation for humanity’, it has never been so vital for businesses to focus on their sustainability strategy.  

The distribution, packaging, and returns of online goods is a major contributor to carbon emissions – it’s therefore of paramount importance to make this process more sustainable. Consumers are increasingly looking for steps to actively reduce their carbon footprint, and businesses need to adapt and promote sustainable practices to align with these customer values. Climate change and sustainability have now become an unavoidable topic and many consumers are ready to make the changes necessary to reduce their emissions and overall environmental impact. Sadly, too few companies are giving them that option at this moment in time.  

The failure to uphold promises on sustainability 

Research conducted by parcelLab analysed the performance of the UK’s top 50 Direct to Consumer (DTC) brands and analysed their offerings on sustainability. The findings showed a comprehensive failure to offer customers choice in reducing their negative impact on the environment. This is surprising, as according to a recent IBM report, nearly 6 in 10 consumers said they were willing to change their shopping habits to reduce their environmental impact. 

The DTC report revealed that just 4% of retailers offered a carbon neutral delivery option, and only 6% offered an option for the customer to request less packaging at checkout. On top of this, 30% of retailers still include plastic packaging in the parcel, and 52% included a branded insert. Furthermore, the findings revealed that not one of the retailers offered any form of sustainability messaging in their communications. Despite many retailers claiming to be making efforts to become carbon neutral, the reality is that during the delivery process DTC brands are generally falling well short.  

Empowering the customer through choice 

Our research highlights one simple conclusion:  DTC brands are not providing their customers with eco-friendly solutions and offsetting alternatives at the checkout.  

The fact that 94% of brands did not offer the customer a choice to use less packaging is an area where clearly there needs to be improvement. Businesses could also offer the customer a choice whether to use branded or recycled packaging, while also having the option to not include any single-use plastic within the package. Additionally, while many carriers now offer carbon neutral delivery options this choice is not being given to the customer during checkout. Businesses could go further and add an option for the customer to offset the carbon footprint of the entire order, with the potential to reward customers who make this choice with loyalty schemes or discounts. 

Businesses have a responsibility to offer more sustainable options to their customers, but also to educate them on the simple steps that can be taken to reduce environmental impact. For instance, if businesses were to highlight the carbon footprint of an individual order at the checkout, and offer some alternative offsetting measures consumers can invest in, this would demonstrate a genuine effort to reduce their environmental impact. This is not necessarily about forcing each and every customer to take drastic steps, though of course some will. It is about empowering every customer to make choices which align with their environmental concerns, as opposed to leaving them with little to no choice on the matter as is the case across the majority of e-commerce platforms.  

Educating the consumer through effective delivery communications: 

Information also plays a central role in reducing the environmental damage of eCommerce. It can come in simple steps such as signalling to the customer what can and cannot be recycled either through instructions on the package or through delivery communications. Marketing material could also be included within delivery communications, eliminating the need to produce branded inserts in the package which are so often disposed of immediately. Accurate and immediate communication with the customer also maximises the chances of a successful first delivery attempt, resulting in carriers having to make less repeated and wasteful journeys along with happier customers. 

The returns process is also an exercise often fraught with pain whilst being a large contributor to emissions – approximately 30% of all online retail sales are returned with ‘serial returners’ overordering only to return the vast majority of the order. This huge volume of returns is highly damaging to the environment and extremely wasteful, and with only 45% of brands offering paperless returns more should be done to make this process as environmentally friendly as possible. Brands should consider carrying the focus on sustainability throughout the return and refund experience; continuing to educate the customer on the environmental effects involved in returning the package. 

Combatting ‘greenwashing’: 

Finally, greenwashing is an accusation often thrown at fashion and retail giaants, and it is often not unfounded. It refers to attempts by businesses to make people believe thata a company is doing more to protect the environment than it really is. With the Chancellor recently announcing that UK firms will have to begin to disclose their environmental impact in order to combat greenwashing, it is vital that businesses become more transparent and honest about their sustainability plans rather than creating misleading information. This will help to embed trust in consumers and encourage them to take seriously the environmental initiatives provided by businesses.  

The DTC report highlights the plain fact that online retailers need to change if they are to become more sustainable. While it is unrealistic to assume this change will happen overnight, implementing a sustainability strategy should be of the highest priority for businesses. Businesses that do prioritise this are more likely to be successful as customers increasingly search for eco-friendly retailers to shop with. 

By Dora Birna, Vice President Global Marketing & Growth at parcelLab

Dora Birna