Recently I had the pleasure of speaking on a panel at the IMRG Fashion Connect event where many of the UK’s fashion retailers attended to talk about all things eCommerce.
And top of mind for Global fashion retailers is sustainability, coming on the back of the COP26 conference and company pledges to get to a net zero carbon footprint.
At VML Commerce we have recently launched our Sustainable Commerce Practice in partnership with our Carbon Measurement platform partner Vaayu. We’re supporting brands and retailers to measure, monitor and find ways to tangibly reduce the carbon footprint from their eCommerce operations.
At the conference I was asked by Andy Mulcahy of IMRG what are the main factors that are driving this focus on sustainability. We see two major ones:
1. The Rise of the Conscious Shopper
2. Current and impending legislation forcing brands and retailers to take this seriously
The Rise of the Conscious Shopper
VML Commerce runs an annual consumer survey entitled “Future Shopper”. We survey 28,000 online shoppers across 17 markets to find out what’s important to them when shopping online and spot some emerging trends. The survey has been running for 6 years now and we have begun to see the emergence of the “Conscious shopper”. These are online buyers that want to shop with brands whose values and ethics mirror their own. And sustainable shopping is a big part of this.
Sustainability is no longer a buzzword when it comes to shopping online. The fashion search engine Lyst has seen searches with sustainability-related keywords rise by over 75% as consumers become more proactive in who they shop with and what they buy. They are much more aware of:
• The environmental cost of producing a product
• The environmental cost of selling and shipping a product
These shoppers are actively seeking and choosing brands that are not only reducing these costs but providing them with transparency and information across they key elements of the transaction be it the product, the supply chain, packaging, delivery, etc.
However, this does lead to a dichotomy: even though our 2021 survey found that 71% of consumers globally said they wish brands and retailers had better environmental practices and would buy more from the brands that do, in their own shopping behaviours, they are not always practicing what they preach – especially with regards to online delivery options. When it comes to delivery, 3 out of 10 said within 24 hours; when asked for the one thing they would change about delivery, 50% said “Get me my delivery faster”.
Impending Legislation
The fashion industry accounts for somewhere between 4-8% of global greenhouse gas emissions. The big retailers with huge supply chains have all pledged to lower their carbon footprint but now the legislators are forcing the issue.
In the US the New York Fashion Sustainability Act requires all fashion companies that do business (sell their products) in New York and generate more than $100 million in revenues to map at least 50% of their supply chains and disclose impacts such as greenhouse gas emissions, water footprint and chemical use, shipping impact, etc. Brands would also be required to reduce their impacts, including by setting and meeting Science Based Targets for their greenhouse gas emissions.
Ahead of this the California Climate Corporate Accountability Act will require corporations with more than $1 billion in annual revenue to report all scopes of their greenhouse gas (GHG) emissions to the California secretary of state.
These are two big pieces of legislation that directly impact the fashion industry, and legislators across the pond in the UK and EU must be looking to see how much an impact these will have and whether they themselves impose similar requirements in their territories.
Taking Action from an eCommerce perspective
In the short term, what can brands and retailers do to mitigate impending legislation and capitalise on the rise of new shopping habits?
Firstly, we need to shift the concept of sustainability as an overhead and cost to business to something that can truly differentiate one brand over another.
The online retailer Zalando is certainly a pioneer in sustainable practices. They believe there’s a clear link between sustainability and continued commercial success. They found that 60% of the company’s greenhouse gas emissions were as a result of deliveries and returns, so Zalando has put in practices to offer consumers delivery options that are more environmentally friendly and better product descriptions to reduce return rates.
In our sustainable commerce practice we are focusing on eCommerce operations and all the elements that surround how a product is sold online. We are looking to find the biggest levers that can have the strongest impact on carbon footprint reduction.
We have worked with Furniture manufacturer DFS to implement AI technology into their delivery scheduling to optimise their delivery routes. The result is an 18% reduction in fuel consumption for the company, which is not only a direct saving but it also reduces the carbon footprint of the delivery to the consumer. For other clients, we are focusing on packaging – especially, secondary packaging that can be eliminated or optimised.
Our partnership with the pioneering sustainability platform Vaayu means that, for the first time ever, brands and retailers can measure the carbon footprint right down to product level and in real time. They can track how their sustainability practices are having an impact order by order and have a feedback loop that informs future action.
This, we believe is the real differentiator. With real time data at order level, retailers can use clever online UX and UI to show the conscious shoppers not only the impact of their choices but options that reduce their carbon footprint. By being transparent and giving customers choice and even rewarding sustainable options, we are seeing greater customer loyalty.
We all know personally that Sustainability is massively important to the Earth and our wellbeing. We all must act now to make eCommerce operations as sustainable as possible.
