What if we told you that sustainability has become a high priority in e-commerce? In fact, it affects the entire value chain for merchants, from sourcing to checkout.
But will it really impact my business? And is there a way I can benefit from these sustainability trends for e-commerce merchants?
Before we dive in...
Let’s clear the term sustainability. Sustainability is defined by the United Nations as "meeting the needs of the present without compromising the ability of future generations to meet their own needs." Put simply, this means leaving the environment in a better condition than we found it.
How can e-commerce impact that?
#1 Sustainability Trend for E-Commerce Merchants: Changing Consumer Behaviour Striving for Sustainability
90% of consumers, especially Gen Z, expect brands to address environmental issues.
Awareness on eco-friendly consumption is on a high, especially amongst the younger generation: a survey on consumer spending found that 75% of Gen-Z shoppers considered sustainability to be more important than the brand name when buying products.
A similarly high share, 74% of consumers prefer to use products, instead of owning them. That's a remarkable step towards sustainability as consumers are willing to give up ownership for a more environmentally-friendly way to use and reuse products.
The subscription model that we know from software businesses, such as Spotify or Netflix, is transferred to the hardware sector. That allows consumers to use products as a service. Merchants who are able to provide this can stand out from the competition.
#2 Sustainability Trend for E-Commerce Merchants: Rise of the Circular Economy
We can't argue that the linear consumption cycle of buy-use-throw away generates a massive amount of waste.
For example, in 2022, 59.4 million tonnes of e-waste was generated and only 17% was properly recycled.
This resulted in over 5.3 billion discarded mobile phones and 8 kg of e-waste generated per person.
The circular economy can reverse this waste generation cycle.
The circular economy is centred around producing, consuming, and reusing products. Thereby, reducing excessive waste and the need for raw materials by extending product lifetime value.
You can also read about key drivers of the circular economy and discover more benefits of the circular economy.
Merchants who want to seize this opportunity and be the market leader, need to act quickly. There are options to address this sustainability trend for e-commerce merchants, such as offering circular payment plans like product buybacks.
Product buybacks keep products in use for longer by maximising usage cycles and product lifetime value.
No hassle of resale for consumers, more recurring revenue for merchants.
Product buyback is an agreement between the merchant and consumer upon the moment of purchase. It means that the product will be bought back from the consumer after the usage period. That returned product is refurbished and finds a new owner, or is recycled. Hence, product lifetime value is extended.
Did you know that product lifetime value can be extended through shorter product usage cycles? Product buyback solution serves this exact purpose.
In fact, many renowned brands are already implementing circular strategies:
home products giant Ikea has pledged to become fully circular by 2030 by facilitating product buyback and resale, and producing furniture from waste material or sold products;
the fashion brand Zara has introduced demand planning to predict the demand for seasonal items more accurately and reduce waste.
#3 Sustainability Trend for E-Commerce Merchants: Reducing Carbon Footprint Through Product Reuse
The main concern in tackling carbon emissions is production.
Production can make up 95% of a product’s carbon footprint.
That's why materials' and product reuse is key in reducing the environmental impact. This sustainability trend for e-commerce merchants can be best achieved in cooperation between manufacturers, retailers, and consumers.
An accessible way to reduce carbon footprint is circular offerings through product buybacks.
Product buyback is a payment plan that encourages product reuse and can bring a lot of value.
Merchants get recurring sales and more loyal customers through repetitive product usage cycles. Consumers are financially incentivised to keep using this payment plan by upgrading products according to predefined usage cycles. These predictable loops help plan sales and marketing more accurately. Merchants can generate additional revenue by reselling products returned by consumers.
Consumers get lower monthly price points, access to the latest products, and peace of mind that their old products are taken care of. Guarantee that the product is bought back at a fair price. No hassle with product resale.
Banks who finance this payment plan get infinite interest payments as consumers are willing to pay for staying in a binding relationship. That is inherent in the product buyback solution.
The environment is cared for. Fewer resources are needed to produce new products as old ones are kept in circulation or recycled properly.
#4 Sustainability Trend for E-Commerce Merchants: Innovative Payment Technologies to Endorse Sustainability
Efficient use of technology can fuel sustainability. For instance, it's estimated that AI could reduce worldwide greenhouse gas emissions by 4% in 2030.
What if there's a simple solution? What if you could become more sustainable by changing the way consumers buy products?
This sustainability trend for e-commerce merchants can be achieved by implementing circular payment plans that pave the way for responsible consumption.
That's also what our product buyback solution is designed for. It works as a three-way partnership:
Fairown provides the payment platform and manages product renewal cycles;
the local bank provides product financing;
the merchant sells products.
Fairown orchestrates this model making sure that merchants get paid 100% upfront and banks finance the purchases, eliminating the risks for merchants. Consumers never pay the full retail price if they continue using this payment plan and renew their products.
Merchants get a turn-key platform, where all is figured out, from A to Z. No need to build complex systems on your own. No experimentation with trials and errors. It's easy to embed into your customer journey, which saves you time and money.
If you want to get recurring sales and loyal customers, product buyback solution is the key. Get in touch!