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The world of ecommerce and sustainability have more in common than meets the eye. By aligning your goals with sustainability practices, you can increase customer loyalty and trust while saving money. From utilizing renewable-energy sources to investing in eco-friendly packaging solutions, there are numerous ways your company can make operations more sustainable while still staying true to your ecommerce objectives.
You might be surprised at how easily sustainability in ecommerce can align itself to your company's broader strategic objectives, whether that's cross-border ecommerce or further sustainability goals such as reduced energy consumption. For example, brand messaging can be leveraged to emphasize your company's values and commitment to e-commerce sustainability to customers and employees.
Additionally, sustainability practices can also help cut costs by allowing your business to get grants from the government. These grants can be used for solar panels or for eco-friendly and recyclable packaging, which can help you pay fewer taxes, reduce waste, and save the planet while bolstering your bottom line.
What sustainability initiatives do ecommerce customers expect?
Brand messaging is key for any company, regardless of its target audience. For example, Pew Research Center has found that Gen Z and Millenials are highly aware of and engaged with environmental topics, while older people may not be as invested. Additionally, there are 8 billion people worldwide, so there are numerous cultures and expectations to take into account when planning a sustainable ecommerce strategy.
That being said, global brands typically have an audience that cares about the environment. Customers often expect to see meaningful improvements in sustainability practices such as zero emissions, zero impact, and zero carbon footprint. Customers are more likely to favor companies that are actively making these improvements to the environment, and it is becoming increasingly clear that this is a requirement for successful businesses selling worldwide.
When you think of global brands who are doing a good job handling sustainability, Patagonia often comes to mind. Not only does Patagonia practice sustainability with durable products, but they also donate their profits to national parks, charities, and other foundations.
Similarly, The North Face is a brand focusing on sustainable fashion by developing a polymer jacket that is almost entirely recyclable. Customers can even return their jackets and receive credit toward buying a new one.
Lastly, luxury brand Prada contributes to sustainability in ecommerce by offering eco-friendly shoes and fashion apparel. Fashion is one of the most difficult industries to create sustainable e-commerce strategies due to the shipping, logistics, and waste that comes with exporting resources from all over the world. Yet these examples are proof that effective businesses can combine sustainability and e-commerce to create even more success, even when it comes to international ecommerce shipping.
Incorporate sustainability in your ecommerce operations now
In the modern age, reputation and brand sentiment are everything. This means that to remain competitive in the ecommerce industry, business must consider all stakeholders, not just the customer. This includes employees, investors, and shareholders. The risks of not taking adequate care of all business stakeholders may include financial loss and reputational damage.
Investors may find more attractive investments elsewhere, employees may seek work with other companies who uphold their values, and customers may look elsewhere for products that better suit their needs. The same applies to customers who may choose not to go with your brand due to lack of sustainability or other criteria they prioritize. As sustainability is becoming more and more important, businesses have the potential to lose their competitive edge if they do not meet these standards.
These issues are not only related to sustainability, but also ethics and societal well-being. Such complications can be prevented by implementing improvements in the supply chain. The same is true for sustainability; it's essential to act before something truly dire happens and affects your bottom line in a way that is irreversible.
Remember, 95% of emissions come from logistics, so to reduce your carbon footprint, focus on reducing logistic emissions. You can work with companies like DHL and FedEx that offer a "Go Green" option which offsets emissions, thereby creating a zero-carbon footprint and boosting your brand's reputation for sustainability.
You can also select green options for shipments and consider solar panels for warehouse roofs. After all, you must have sustainability policies in place to improve your carbon footprint before being allowed ecommerce access to some countries in Europe, for example. As such, it's imperative to start early and begin showing records of your ecommerce sustainability efforts to investors and customers.
Implement sustainability into international shipping strategies
Solutions that focus on sustainable practices — from logistics and packaging to returns — are essential to help your brand stand apart from the rest, maintain positive customer sentiment and boost your yearly revenue. If you're unsure where to begin, you can start by following the five simple solutions below to get your business on the track to success.
1. Balance shipments with carbon offsets.
The first step should be to invest in carbon-offset programs for international ecommerce shipping. Using these programs will help significantly reduce your emissions and are easy ways to put your business at the forefront of climate solutions.
2. Reduce packaging and improve efficiency.
There are three methods for reducing packaging: diminishing the packaging for each item, maximizing the effectiveness of the package itself, and eliminating excess air from the container. All of these solutions help your business maintain sustainable ecommerce standards, meet customer expectations and help reduce costs.
3. Use recyclable or biodegradable materials for packaging.
Material that is recyclable or compostable could be a much more sustainable choice compared to conventional packaging materials. Choosing these sustainable options means even the packaging used for your shipments and returns would be green, further boosting your sustainability efforts.
4. Localize warehouses to reduce the number of shipments.
Offering returns domestically and providing lockers for shipment pickups can help to save money and improve the last mile of delivery. Couriers can also be sent to one place where lockers are instead of spending a full day making deliveries.
5. Choose sustainable suppliers.
Pick suppliers for your raw materials who clearly demonstrate their own set of sustainable ecommerce values, such as using warehouses powered by solar panels. This ensures that your business is not only meeting your own sustainability goals, but you're also contributing to a more sustainable environment for further cross-border ecommerce operations.
In summary, your company can create a sustainable and successful ecommerce platform by building your value chain, optimizing and improving every process and encouraging your team to think of ways they can reduce emissions. After all, having a team that is aligned on both a policy level and value level makes it easier to make sustainable ecommerce a reality — not to mention achieve cross-border ecommerce success that is both efficient and ecologically conscious.
Trending in Operations
Sortation centers are helping the retailer build on its stores-as-hubs strategy.
Like many retailers, Target undertook a massive digital buildout during the pandemic as ecommerce demand spiked.
The new capabilities proved to be the launchpad for impressive growth. In 2020, store pickup grew 600%. Same-day fulfillment grew 400% from 2019 to 2021. By 2022, the company was ready to double down on digital. It announced plans to invest up to $5 billion to scale operations, with store-based fulfillment capabilities among the big areas that would receive a boost.
It was an example of how the pandemic’s digital shift left a lasting imprint that would change a retailer’s footprint well into the future. But it’s worth remembering that Target already had the strategy that shaped this operational transformation in place well before COVID-19 arrived.
In the mid-2010s, Target adopted a stores-as-hubs strategy that put brick-and-mortar at the center of all operations, including digital. This meant that ecommerce orders would run through the store, just like in-person shopping. This has remained in place, and only grown. In the first quarter of 2023, more than 97% of sales were fulfilled by stores.
Stores-as-hubs was a radical approach at the time it was introduced. CEO Brian Cornell faced criticism that the two channels would cannibalize each other, and was out-of-step with the massive warehouse-based fulfillment network that Amazon was building. But in the end, Cornell was vindicated. The strategy put Target not only in position to capitalize on the pandemic’s digital shift, but to continue to see its stores be a destination when consumers returned to in-person shopping when restrictions were lifted.
At this point, Target’s nearly 2,000 stores are cemented as the center of ecommerce operations. But as it seeks to gain efficiency and speed in delivery, the retailer is bringing additional facilities into the network.
Now, Target sees opportunity to build ecommerce from the inside out.
Scaling with sortation centers
This year, evidence is emerging in the form of Target’s sortation centers. Positioned downstream of stores, these facilities combine technology and process logic to triage packages for last-mile delivery by the Target-owned service Shipt. Orders are still picked and packed at the store, but the sortation centers serve as the staging grounds that get packages out the door for delivery.
On the company’s first-quarter earnings call with investors, Target COO John Mulligan stressed that these centers are not highly automated.
“In fact, it's because of the relative simplicity in the design of these buildings and the efforts of an incredibly innovative and energetic team that we've been able to scale the number of these buildings so quickly,” Mulligan said.
Target is placing a big bet on these facilities. In February, it announced plans for a further investment in the supply chain of $100 million, focused on the sortation centers. It is enabling rapid growth. In 2022, the company had three centers, and now has nine. By 2026, it expects to have 15 centers in place.
These facilities are also serving as testing grounds as Target seeks to scale the delivery network.
A new facility in the Atlanta area is serving as an extension of the sortation center that has enabled Target to reach 3 million customers with next-day delivery.
“With this new facility, online orders that have been packed by Atlanta area stores continue to flow to the sortation center, where they're sorted and delivered via our national carrier partners or a ship driver,” Mulligan said. “However, a portion of local orders falling outside the sortation center's last-mile delivery area can now be transferred to the Smyrna extension, where Shipt drivers can pick them up and serve additional neighborhoods.”
Target and Shipt are also refining the path that packages take to reach customers. Shipt vehicles are being shifted to high-capacity models such as SUVs and minivans. These were used in 65% of last-mile deliveries in the first quarter, compared with zero a year ago. The vans service nearly five times as many packages, and enable route optimization that increases the number of packages delivered per hour.
It all adds up to reduced service costs for Target, and the company is continuing to build and refine processes at the sortation centers.
“Based on the success of these efforts, we're developing plans to begin testing high capacity vans at a larger scale,” Mulligan said. “In addition, we're developing a standardized faster way to load those vans, enabling package containerization and easy identification of the correct packages at delivery. In addition to simplifying the load process for the drivers, this new process will enable us to safely move a larger number of Shipt drivers in and out of our sort centers in a given amount of time, expanding our last-mile delivery capacity in these markets.”
Improving the ecommerce experience
To expand this last-mile capability, Target won’t be building massive fulfillment centers like Amazon. It already has large stores that offer proximity to large swaths of the population. Those can be outfitted to serve the same functions as large warehouses, and sortation centers help to expand them. Add in a delivery network via Shipt, and the pieces are in place to continue expanding and optimizing capabilities.
A scaled logistics network on the backend could also improve Target’s ecommerce experience on the frontend. For instance, increasing fast delivery could also open up more opportunities to deliver items with a shorter shelf life such as groceries, which is an area where Target is looking to expand. As Amazon has shown, consumers are also more likely to buy if they receive items in a convenient manner. Target’s stores have long benefitted from customers associating the shopping experience with their affinity for a retailer, just as much as they do the products they buy. Through fulfillment and delivery, it can extend the Tarjay cachet online, as well.
Ecommerce has always held the promise of being able to bring the store home. Target’s logistics strategy is putting that idea into action in a very literal way.