Returns are an all round nightmare ...

• For the planet - since returned products have two delivery legs plus extra packaging
• For your profits - because reverse logistics (i.e. the process of receiving a product then quality checking and preparing it for resale) often costs somewhere between three to six times as much as sending a product to a customer
• For your customers - as they need to take time to repackage products to be returned and drop them off

The best way of reducing returns is to avoid dispatching the wrong products in the first place. Doing so will drastically reduce your return rate which will increase your profitability and reduce your environmental impact.

For that reason, you should provide the customer with more information before they make a purchase to make it more likely that they will choose the right product for them (for example the right colour, size, style or fit).

This might take the form of more relevant reviews posted by customers who are similar to the current customer, or perhaps it might take the form of educating the customer about the environmental impact of return. Many merchants are also experimenting with removing free returns to help the customer to consider the impact of returns and to reduce wardrobing.

Finally, merchants are starting to use emerging technology such as detailed 3D models and accurate customer sizing to ensure that the product will fit the customer perfectly. You may even want to consider custom building products to the customer’s exact size.

Overview​

John Doerr is a partner at Kleiner Perkins and has been making climate related investments since 2006, way ahead of the curve. He outlines a very detailed plan for getting to net zero using OKRs (Objectives & Key Results), a technique popularised by Google and widely used in the tech space.

In many respects it's similar to billg’s book but it's a lot more prescriptive and probably benefits from Bill’s book being published first. There are interviews with a lot of climate luminaries - the book was written in the run up to COP26 and so there are lots of positive looking statements which unfortunately weren’t backed up by commitments from all countries in Glasgow.

The book contains Lots of great investing war stories and interviews with entrepreneurs & policy makers. My favourite of these was the time that he passed on investing in Tesla and backed Fisker (who? Exactly).

In summary, this is the best of the "climate plan" books that I've seen. Ultimately it relies upon substantial public policy changes which have been slow in coming.

A few things I learned​

• The current global energy mix includes ...
  • 16% hydro
  • 6% wind
  • 4% solar
• ... the hydro figure is a lot higher than I'd expected
• If the worlds 1 billion cows were a country they’d rank third in greenhouse gas emissions (after US & China) - primarily down to their methane emissions.
• A two thirds vegan diet, including one serving of meat a day, reduces livestock emissions by 60%.
• Beyond Meat are aiming for price parity with beef burgers by 2024.

eCommerce has experienced rapid growth in recent years and particularly it has accelerated during the COVID pandemic. This pace of change is expected to continue with estimates of eCommerce penetration doubling in the next decade. The next decade is the key decade for making substantial changes to meet our global 2030 carbon targets. Clearly, eCommerce businesses must make changes to become more sustainable as they continue to grow. However, sustainability is complex and it's difficult to know where to start.

The sustainability map​

• Defining your business strategy
• Sourcing or manufacturing your products
• Considering your digital presence
• Adopting product circularity
• Optimising your logistics activities

Defining your business strategy​

When thinking about your journey to becoming a more sustainable business, a clear sustainability strategy is essential. It’s important to first understand the current state of your business, so a carbon footprint analysis may be useful at this stage. You can then think about adapting your business model towards sustainability and how your stakeholders and partners can play a part.

You may also want to consider working towards one of the many different forms of certification which are now available, such as attaining b-corporation status. You may then want to set targets - This might be reducing your carbon emission each quarter, or aiming for net zero by a particular year. Defining and setting targets will help you to progress on your journey. Carbon offsets may also play a part here but we feel that they should be considered after looking at all other ways to reduce impact.

Sourcing or manufacturing your products​

The second area to focus on is your products and how you either source or manufacture them. There are many factors here, for example, when selecting materials you may want to consider recycled materials or materials which are easier to recycle at the end of their lifecycle. You should look to design processes to reduce pre-consumer waste and look to recycle the waste which is created.

You should think about designing products for a longer useful life and may want to consider product labelling to help consumers understand the journey the product has gone through to reach them. You should look look to reduce water and energy use during the manufacturing process.

Considering your digital presence​

We often think about the digital sphere as creating less of an environmental impact but in fact taking action on the digital side of your business can also help to reduce the impact your business has on the environment. Starting with your eCommerce website you can take actions to reduce the carbon weight of your website - this will also improve the performance of your site. You can also host your site on a company using renewable energy.

Through your website you can also encourage consumers to make more careful buying decisions and promote positive consumption. For example, free delivery and next-day delivery options being made more readily available take a significant toll on the environment in a multitude of ways. Making changes on your website, such as offering a ‘green’ delivery option and being more thoughtful around marketing campaigns can all make a difference.

Optimising Logistics​

For many businesses a majority of their carbon emissions come from getting products to consumers. There’s a lot that you can do here from looking at recycled or reusable packaging materials, reducing the size of packaging and amount of material needed to securely ship a product.

Further, there are many things you can do to reduce the impact of the last mile delivery of your products. You could incentivise customers to make greener decisions in regards to shopping. For example, you could encourage them to collect parcels from local shops/distribution centres, or, on your website, you could reduce free delivery options. Other options include using electric or pedal power for delivery and using local fulfilment centres.

Adopting product circularity​

The final step to consider in developing your sustainability roadmap is increasing product circularity which we see as spanning the digital and logistics domains. Making your business more circular is a pertinent way to significantly reduce its impact.

You can help customers to select the right product and size first time, and therefore reduce returns, by providing detailed sizing information and consumer reviews as well using AR to let consumers virtually “try on” a product. You could offer the ability for consumers to resell their products to another shopper - this increases the lifecycle of a product as well as making your products more accessible to a new class of value focused consumers.

You could also offer shoppers a way to easily repair products or where that’s not possible recycle products at the end of their useful life.

As you can see there are many different potential ways to make your eCommerce business more sustainable.