Saturday, 16 October 2021

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How the World of Ecommerce Is Affecting the Environment

Electronic commerce, commonly known as E-commerce or e-commerce, is the trading of products or services conducted on computer networks such as the Internet. It is the buying and selling of goods or services on the internet. It includes an extensive variety of data, systems, and tools for online buyers and sellers, including mobile shopping and online payments. E-commerce has evolved in many ways since its start and it is changing the way customers live, shop, and do business. Electronic commerce draws on technologies such as mobile commerce, electronic funds transfer, supply chain management, internet marketing, online transaction processing, electronic data interchange (EDI), inventory management systems, and automated data collection systems. E-commerce was introduced about 40 years ago and has created a huge impact in the retail industry. Changes in technology have certainly driven ecommerce growth, along with a global expansion. The effects of E-commerce have been beneficial for consumers, but it has caused a huge impact on small companies and the environment. Many companies right now are realizing how much harm they have made on the environment and are working on reducing the pollution and incorporating biodegradable packaging to avoid ruining the environment for future generations.

The growth of e-commerce has helped brands tremendously, but for retailers who have been slow to embrace the online marketplace, the impact has been different. For some small businesses, e-commerce conversion has been a slow process and has been difficult for them to adapt to. However, others have had great success and plentiful opportunities with discovering ecommerce. Small business owners are launching e-commerce stores and expanding their selections and reaching more customers and satisfying customers who prefer online shopping. Before the pandemic hit, small businesses were thinking on expanding their e-commerce presence to gain more territory in the retail industry.

Today, 23% of small business owners feel that they will have to strengthen their e-commerce competency in order to survive during and after the pandemic. Another 23% of small business owners have created a website or updated their existing one since COVID-19 lockdowns began, which have helped them gain some customers that they lost due to the pandemic. Thanks to e-commerce, millions of people can shop online every day with a significant portion making purchases more than once a week. They do not have to go to the actual store and buy it anymore. They have done it because it saves them time and there are more options online. This has led to lucrative business opportunities that did not exist before the internet. Some e-commerce marketplaces that have been on the rise around the world since the mid-1990s are Amazon, Alibaba, and eBay. These companies have been excelling, but they are forgetting about the negative impacts that they have created and will create in the future.

The rapid growth of e-commerce has positive as well as negative impacts. Scientists or policy makers still do not have clear statements about the relationship between e-commerce and the environment, but they have acknowledged the good and bad impacts e-commerce has towards the environment. Companies that are providing a quick and convenient way of exchanging goods and services both regionally and globally have caused e-commerce to explode. With the extensive and rapid development of e-commerce, companies and businesses are paying attention to the production of low-cost products. They are also focusing on developing efficient methods and practices which increases productivity while minimizing efforts and costs. They are not aware or concerned about the adverse environmental implications. The internet has now been introduced to almost every part of the world and now is the time to start taking action to reduce pollution and the excess of plastic and cardboard. E-commerce has some negative effects like air pollution, harmful radiation, paper waste, packaging, transportation emission, and more.

The 2011 International Conference on Environmental Science and Engineering study states that, “although the potentials of the Internet to save material and energy cannot be denied, it is too early to conclude that e-commerce has only positive impacts on the environment. It is also seen how, “ Transportation is responsible for a large number of harmful emissions/pollution, and by reducing your organization’s reliance on it, you can reduce your carbon footprint.”(Collins). We can understand that with e-commerce, companies are sending numerous packages constantly and polluting the air. They are also using more boxes or plastic to send the goods to the customer instead of boxing items all together. It is even worse when there is a return and new packaging is needed and more transportation will be needed as well to complete the product return process. The consequences to the environment when returns are made are that they involve double transportation and may require disposal rather than resale. One example of a company like that is Amazon. We have seen throughout the years how they have steered away from this issue and have started to become eco-friendly in order to create a good image and attract customers who are supporting eco-friendly businesses.

Regarding energy consumption, fast delivery requirements create a problem since trucks are moving half empty. This is not only for trucks, but for all modes of transportation like ships, airplanes, and trains. Due to customers demanding their product quickly, some companies are now starting to send their containers half full. E-commerce also tends to favor faster transportation modes, which can increase fuel consumption exponentially. It has been seen that, “Burning fossil fuels like gasoline and diesel releases carbon dioxide, a greenhouse gas, into the atmosphere. The buildup of carbon dioxide (CO2) and other greenhouse gases like methane (CH4), nitrous oxide (N2O), and hydrofluorocarbons (HFCs) is causing the Earth’s atmosphere to warm, resulting in changes to the climate we are already starting to see today.” (“Carbon Pollution from Transportation”). When customers opt for trucks instead of boats or rail, energy use goes up by a large factor. Moving the same package by air again increases the energy use dramatically.

When many people started ordering more from Amazon since the delivery time was 1-2 days and convenient, the use of plastic and boxes increased. Since companies like Amazon were going to start using more shipping boxes due to high demand of online products, the cardboard companies started preparing for a boost in the cardboard markets. Amazon then showed how they were trying to fix their error when they were sending huge boxes when the product only needed a small box. They started reducing packaging materials with the program they rolled out about being rewarded for bundling purchases and sending them in fewer boxes. We now have seen how carbon emissions that are released, the warehousing and production processes, shipping, making a product reusable, and other aspects are associated with sustainability, environment, and e-commerce.

Packaging decision-makers believe biodegradable packaging will be the ultimate solution to sustainable packaging. It makes consumers think how sustainable packaging can help the environment and how everyone can contribute to keep Earth a great place for future generations. With biodegradable packaging, customers can feel less guilty about being part of the pollution cycle and companies can gain a great reputation for taking initiatives to keep the environment clean for future generations. It is also suggested that customers do their part and be considerate and start recycling and think about bundling their products rather than purchasing separately. Some companies are now punishing customers by charging a separate fee for individual packaging. If both the company and customer do their part, then the pollution rates go down. It is not a one-person project to take the initiative and reduce the pollution on an e-commerce transaction but a worldwide one.

This will require everyone to take part in recycling their cardboard boxes, plastics, paper, and more and be educated in how they can recycle or even reuse their packaging. It has been seen how, “Many e-commerce packages are sent in materials that are harmful to the environment, but a new wave of companies is setting out to create more sustainable packaging solutions.” (Morgan). Organizations need to create packaging solutions as well because they should not keep on damaging the Earth with harmful materials.

The packages contain materials that are difficult to recycle as well and as online sales are expected to double in the next decade, companies need to start finding packaging solutions quickly. What a package is made from is equally important to how it is made and the way it is shipped. It has been suggested that, “Customers can reduce packaging size, find different sustainable packaging options online like compostable boxes, or even take an e-commerce packaging essentials class offered by the Sustainable Packaging Coalition to help design your own.” (Collins). This is a great idea and aside from just working on the packaging they can also create different shipping options for customers ordering multiple items like item consolidation. This will help by reducing the number of trips to the customer’s house and the number of boxes used to ship the customers’ orders.

Companies and customers are rethinking their shopping now according to recent studies. Studies have shown how, “Concern for the future of our planet and efforts to combat the impacts of global warming are on the rise. The Yale Program on Climate Change Communication found that between 2014 and 2019, the number of Americans alarmed about global climate change nearly tripled”(Meyer). It has been seen that while shoppers generally select the quickest delivery methods at the lowest price point, some recent studies showed in a new report that customers aware of delivery options with a lower environmental burden are choosing that method instead. This is a great thing to see because it shows how customers are realizing the impact their decisions can have. It has also been known that, “Leading E-Commerce merchants such as Amazon, Alibaba, and Zalando are making efforts to decrease the burden their businesses create on the environment through such things as logistics efficiencies, delivery with electric vehicles and use of recycled packaging materials” (The Environmental Impact of E-Commerce 2020). We are seeing these leading companies take an initiative not just in packaging but transportation as well. Customers, investors, and employees are demanding bold leadership from companies to act on climate change. The pressure is increasing on companies to address product sourcing, manufacturing, transportation, use and disposal. Companies that are not worrying about climate impacts are losing market share, investor confidence, and are facing bigger hurdles to secure insurance or low-interest loans. At the same time, climate change impacts are already causing supply chain disruptions from extreme weather events, and impairing companies’ ability to manufacture, transport and/or sell products.

Companies have the responsibility to take care of the environment and to not just focus only on profiting from customers. They need to be accountable and take responsibility for their actions. Sustainability is an issue that all customers and brands should get behind no matter the size of the business. Brands both big and small are starting to capitalize on the call for more green initiatives and rolling out their own plans to make their businesses more sustainable. Whether the company starts small or wants to become more sustainable, here are a few steps they can take to start making their business more sustainable: update the brand ethos, implement sustainable shipping, reduce packaging, create recycling policies, reduce energy waste, add products that support sustainability, and create an offset service charge at checkout, and consider an ecommerce marketplace to resell your used merchandise. These are some steps companies can use to avoid hurting the environment even more.

There are advantages and disadvantages to e-commerce, but the future has many opportunities for even greater expansion. Sustainability and the future of Earth is an issue that is affecting everyone around the world and in the end future generations will face the consequences for our actions. By taking small steps toward creating a more sustainable product, supply-chain, or shipping methods, companies may be able to achieve both creating a more sustainable future and helping to differentiate their brand in a vast list of competitors in the retail industry. Many companies right now are realizing how much damage they have caused to the environment and are working on reducing the pollution and incorporating biodegradable packaging to avoid ruining the environment for future generations. Companies need to work on fixing the negative effects like air pollution, harmful radiation, paper waste, packaging, transportation emission, and more. That way they will achieve success by reevaluating their packaging methods, transportation, biodegradable content, and the reusability of the product. These actions can help e-commerce be more efficient and eco-friendlier and customers can be satisfied that they are contributing to a better future for the planet.

References

“As Online Shopping Surges, E-Commerce Retailers Face Major Risks From the Climate Impact and Toxicity of Their Products.” Environmental Defense Fund, 29 July 2020, www.edf.org/media/online-shopping-surges-e-commerce-retailers-face-major-risks-climate-impact-and-toxicity.

“Carbon Pollution from Transportation.” EPA, Environmental Protection Agency, 1 Apr. 2021,www.epa.gov/transportation-air-pollution-and-climate-change/carbon-pollution-transportation.

“Impact of E-Commerce on the Environment.” Sana Commerce, www.sana-commerce.com/blog/impact-of-ecommerce-on-the-environment/. Le Peg, lepeg.com/.

Morgan, Blake. “Does E-Commerce Care About Sustainability?” Forbes, Forbes Magazine, 9Feb.2021,www.forbes.com/sites/blakemorgan/2019/11/05/does-e-commerce-care-about-sustainability/?sh=68f157e012c8.

“Sustainability in Ecommerce + Steps for Becoming Eco-Friendly (2021).” The BigCommerce Blog, 14 Jan. 2021, www.bigcommerce.com/blog/ecommerce-sustainability/.

“The Environmental Impact of E-Commerce 2020 - Special Sales like Black Friday & Cyber Monday Burden the Environment Due to the Intense Amount of Packaging, Shipping & Delivery - ResearchAndMarkets.com.” AP NEWS, Associated Press, 27 Jan. 2020, apnews.com/press-release/pr-businesswire/9580310f040a4f468c51ce31ffc28f80.

“The Roadmap to Sustainable e-Commerce.” EDF+Business, 8 Sept. 2020, business.edf.org/insights/the-roadmap-to-sustainable-e-commerce/.

“11 Ecommerce Trends to Watch for in 2021: Net Solutions.” Insights - Web and Mobile Development Services and Solutions, 26 Apr. 2021, www.netsolutions.com/insights/top-ecommerce-trends/.

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