Top 5 Positive Impacts of eCommerce on the Environment and Economy
The eCommerce industry continues to grow at a breakneck pace. For anyone with ambitions to start their own businesses, eCommerce offers ample opportunities to turn their dreams into cash.
Even better news: eCommerce isn’t just good for the individual.
It’s also good for the environment and the economy. So eCommerce entrepreneurs cannot only feel good about the money in their bank accounts. They can also feel good that their brands are more environmentally-friendly than traditional retail and can also help their local communities.
In this article, we’ll discuss eCommerce's top positive impacts on the environment, the economy, and the individual.
The environment, economy, and eCommerce: Current stats
eCommerce has been around since the 1990s when the internet debuted to the average Joe and Jane with the means to afford it. Nowadays, internet use and online shopping, by extension, are far more widespread.
In 2020, there were over two billion online shoppers, which has only grown in the last two years. Overall, eCommerce is driving massive job growth in related industries, mainly:
- Customer service
- IT support
Despite the economic gains, eCommerce growth isn’t necessarily bad for the environment. In fact, eCommerce is 17 percent more carbon efficient than traditional retail. eCommerce is also helping to raise people out of poverty.
eCommerce vs. Poverty: The stats
Starting an eCommerce business has lifted many out of poverty and alleviated financial stress during the Covid-19 Pandemic. eCommerce gave people who lost their jobs during the pandemic a way to earn an income safely. In some cases, those people didn’t return to payrolled work once lockdowns and stay-at-home mandates were lifted.
The 2020 pandemic upheaval was as good a time as any to launch an eCommerce brand. Sales surged with the closure of traditional retail stores. The ease and convenience of online shopping also mean that many of these customers will remain loyal to their newfound eCommerce brands.
Also, many large eCommerce retailers are alleviating poverty across the globe. For example, Amazon donates $40 for every $1000 in sales to charitable initiatives. In addition, JD.com, one of the largest eCommerce retailers in China, has helped to increase over 100,000 impoverished households' income from 2,000 to 3,000 yuan.
Compared to traditional retail, eCommerce has much lower barriers to entry. This makes it an attractive option to explore for people with an excellent idea for sales but not a lot of capital for launch.
Top 5 eCommerce positive impacts
The world is moving toward a much more digitized future, and eCommerce is leading the charge. But is eCommerce really sustainable?
Let’s break down the top 5 positive impacts of eCommerce on the environment, touch on the downsides, and what we can do to alleviate the negatives when building an online brand.
#1. Fewer greenhouse gas emissions
Greenhouse gas emissions contribute to climate change because they trap heat in the environment. Additionally, greenhouse gasses increase smog and pollution, which triggers and worsens respiratory issues in people and animals.
Online shopping emits up to 2.9 times fewer greenhouse gas emissions than in-person shopping. This reduction is because eCommerce requires less land use than traditional retail. Storage, parking lots, and consumer vehicle traffic numbers are significantly reduced with eCommerce.
#2. Reduced transportation-related pollution
Traffic is a big contributor to environmental pollution. eCommerce can help alleviate this ecological problem on two fronts. For one thing, online shopping reduces traffic since people don't have to drive to get to a store and make a purchase.
Also, eCommerce opens up opportunities for people to work from home. eCommerce companies that allow flexible working arrangements can drastically reduce their carbon footprint with work-from-home employees.
#3. Reduced paper waste
Too much paperwork is terrible for mental health and the environment too. The paper industry is the third largest industrial polluter of air, water, and land. It is the fifth largest energy consumer. In addition, paper mills contribute to deforestation, which reduces biodiversity and makes the planet less stable and hospitable for everyone — humans, plants, and animals.
Reducing our reliance on physical paper can have a tremendous net positive impact on the environment. One way to do this? To start and patronize an eCommerce business. eCommerce brands heavily rely on digital records and thus, have less demand for paper.
In addition, digital records are a major contributor to customer satisfaction. Business owners can quickly transfer information about a product on product pages, downloadables, videos, and other digital means. This drastically reduces the reliance on the paper industry and lowers a brand's carbon footprint.
Bottom line? Reducing paper and going digital saves money, time, and the earth.
#4. Digital storage reduces land use
Did you know that there are giant warehouses all over the globe whose sole purpose is to store paper records? It’s a massive use of land and, in today's digital age, a waste of it. The same goes for warehouses that manufacture physical products.
No matter how you slice it, warehouses consume large quantities of land. They require freight trucks to move products which creates pollution, traffic safety issues, noise, and pavement and road damage. eCommerce can help alleviate these particular environmental strains in a few different ways.
For starters, the digital transfer of information can drastically reduce the need to store paper records in a warehouse somewhere to collect dust.
Creating on-demand digital products and selling them through an eCommerce platform also lowers warehousing costs and needs. Finally, Internet transactions also reduce the waste of perishable goods.
#5. Environmental opportunities for sellers
Another significant benefit that eCommerce offers the environment is that the rise of online shopping has created many opportunities for earth-friendly sellers.
Today’s consumers are becoming increasingly aware of the environment's fragility and what they can do to be more environmentally friendly. As a result, consumers are calling on brands to offer earth-friendly products and conduct earth-friendly business practices. Overall, today’s shoppers prefer to purchase from eco-friendly brands.
It’s a competitive marketplace, and brand loyalty is not guaranteed. But sustainable products and programs are an effective way for eCommerce businesses to increase their market share and differentiate from competitors.
Earth-friendly differentiation: Making eCommerce greener
There’s a downside to everything, and eCommerce is no exception. The good news is that eCommerce is in its infancy, and we have time to work out the kinks and make online shopping faster, greener, and more sustainable in the immediate and long-term future.
The biggest environmental downsides to eCommerce are:
- Supply chains
Changing these downsides can help you build a more sustainable and popular eCommerce brand.
Up next: Our quick tips.
Investing in innovative packaging solutions is necessary if you want to build a more sustainable eCommerce brand that makes today’s savvy consumers happy. However, it’s equally critical to know what the packaging is made of and how it’s shipped.
Reducing packaging size and using sustainable packaging solutions, such as compostable packaging or biofilms, are great ways to do this.
Shoppers want things shipped and delivered yesterday. The demand for immediate shipping and delivery is at an all-time high with no signs of coming down — at least anytime soon.
So for eCommerce business owners, you must come up with creative solutions to reduce the environmental impacts of shipping.
Here are some of our pro tips:
- Paperless invoicing
- Item consolidation
- Sustainable packaging
- Supply chain integration
Item consolidation, in particular, is a great way to reduce shipping costs. It eliminates the number of trips needed to get items to a customer’s home and reduces the number of boxes required.
Supply chain integration
Through smarter digital integration, it’s possible to reduce supply chain waste and inefficiencies for eCommerce brands. One way to do this is to connect all stakeholders, information sources, and inputs into a unified ERP system. Empowering stakeholders with more efficient decision-making capabilities is an excellent way to obtain a leaner, more earth-friendly supply chain.
Business logistics and data management are beneficial for the customer. But they’re also helpful for the business and the environment too. Better communication and coordination through digital technology can lead to more sustainable eCommerce business operations worldwide.
Positive impacts of eCommerce: Key takeaways
eCommerce offers a wealth of benefits for the environment, the economy, and individual entrepreneurs. While eCommerce isn’t totally environmentally friendly yet, the keyword is yet.
Through savvier supply chain management, eco-conscious packaging solutions, and more thorough digitization, it’s possible to build a much leaner, greener, and sustainable eCommerce economy now and into the future.
Are you ready to embark on your eCommerce journey?
Get in touch with the experts at Lingble today. We build sustainable eCommerce brands through omni-channel reach, marketing support, and greater customer satisfaction.