By Zohar Gilad, Fast Simon
The internet currently creates one billion tons of greenhouse gas emissions every year. Online commerce contributes to this due to demand for goods production, packaging, and the added dependency on the supply chain. As consumers, we are responsible for taking care of our earth. The eCommerce industry also can play a pivotal role in sustainability and reducing our climate footprint.
Here are four solutions to help make eCommerce more eco-friendly.
Optimize Inventory with AI
As the demand for products increases, so does the complexity of inventory management. From an ecological perspective, having a strategic inventory management system can be the difference between wasting inventory by overproducing and running out altogether.
Some brands create or print products on demand to avoid waste and keep products personalized, but this isn’t realistic for big consumer brands. An effective way to address inventory concerns is understanding what will or won’t sell. Access to trends and historical data helps merchandisers assess this. Using AI can alleviate the heavy lift of adjusting collections and pushing products with high inventory. By leaning on technology to automate and inform, merchants become more efficient and produce less waste.
Returns cause additional packaging, plastic usage, and gas emissions from shipping, impacting the ecosystem. The best way to avoid returns is by making the eCommerce shopping experience as accurate as possible. What does that mean? eCommerce retailers have acknowledged that not being able to try items on or see them in place is an issue for consumers, so they have started implementing AI and 3-D modeling to increase accuracy and minimize returns. A 3-D modeling technology, like True Fit, which is used in most online fashion-sites, allows the consumer to get an accurate picture of the correct garment fit. Additionally, brands like IKEA and Warby Parker have implemented AI solutions to allow consumers to place furniture virtually in rooms or try on eyeglasses before committing to their purchases.
Look Local for Inventory-based Merchandising
Over the past few years, the retail industry has faced many inventory concerns, forcing it to evolve its supply chain processes. The supply chain has a massive impact on our environment and elicits numerous questions: How green is my supply chain? My suppliers? My production methods? Transportation methods and distances?
Order management and responsible shipping are some of the best ways to make a change. Having more than one warehouse to localize inventory-based merchandising can help reduce delivery truck emissions, expedite shipping, and improve convenience for shoppers. Merchants also can find local suppliers, eliminating the costs and emissions of flying things overseas. Some stores also have begun blending the physical and digital shopping experience by using brick-and-mortar stores as additional warehouses with “buy online and pick up in store” filters. Localizing inventory is convenient for the consumer and can significantly minimize a brand's climate footprint.
Communicate With Customers
A survey by The Economist found that consumers often consider a company’s environmental footprint before purchasing products. So, retailers must be transparent about what they are doing to combat climate change and help educate consumers on how their purchasing decisions are playing in the ecosystem. Transparency builds brand trust and loyalty and goes a long way toward building a partnership for an eco-friendly world.
The past two years have reshaped the eCommerce industry. New challenges and trends will continuously test merchants’ resilience and motivate them to adapt to new norms to meet the demands of the growing digital economy. Creating a road map toward a sustainable business may soon be compulsory, so getting ahead of the curve is a positive move. Investing in green commerce practices leads to a long-term payback in brand image, value, and customer loyalty for years to come.
About The Author
Zohar Gilad is an experienced technology entrepreneur and executive. In 2013, he cofounded Fast Simon, Inc. (formerly InstantSearch+), leveraging his experience to bring state-of-the-art shopping optimization to eCommerce brands. Throughout his career, Zohar has been the driving force behind more than 20 software products that have since been used by millions of users worldwide.