top of page

What Are 4 Major Sustainability Trends for E-Commerce Merchants?

Updated: Nov 27

Sustainability has become a high priority in e-commerce, affecting the entire value chain for merchants. What are the major sustainability trends for e-commerce merchants?

  1. Consumer behaviour that strives for sustainability.

  2. The rise of the circular economy.

  3. Reducing the carbon footprint through product offerings.

  4. Innovative technologies that endorse sustainability.

Hendrik Roosna, CEO and Founder at Fairown
Hendrik Roosna, CEO and Founder at Fairown

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 does e-commerce relate to that?

#1 Sustainability Trend for E-Commerce Merchants: 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.

Photo of people and smartphone

A similarly high share, 74% of consumers prefer to use products, instead of owning. This is a remarkable step towards sustainability as consumers are willing to give up ownership and pile up less products in their homes. Merchants that are able to provide this, can offer unique value.

Merchants who want to seize this opportunity and lead the market, need to act quickly. There are many innovative and sustainable options to address this sustainability trend for e-commerce merchants, such as using innovative technologies like product-as-a-service payment plans.

Product-as-a-service payment plan keeps products in use for longer by maximising usage cycles and product lifetime value.

Customers are incentivised to keep using this payment plan by upgrading their products according to predefined product usage cycles. Returned products are refurbished and resold on the secondary market, or recycled.

Find out, why shorter product usage cycles are better for the environment.

#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. If we take just electronic waste as an 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 mobile phones being thrown away by consumers.

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 products’ lifetime value.
Circular economy explanation

That’s why this sustainability trend for e-commerce merchants is so important.

There are accessible ways for e-commerce merchants to introduce circular product offerings. Product-as-a-service payment plans can bring a lot of value as keeping products in use for longer allows to extract more value out of the same product. Less new products can be produced, and less old products end up in landfills.

Did you know?

Many renowned merchants 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.

You can also read about key drivers of the circular economy. And discover more benefits of the circular economy.

#3 Sustainability Trend for E-Commerce Merchants: Reducing the Carbon Footprint Through Product Offerings

The main concern in tackling carbon emissions is production that can make up 95% of a product’s carbon footprint. Alongside manufacturers and consumers, every brand and retailer plays a part in this sustainability trend for e-commerce merchants.

A good way to reduce the carbon footprint is by introducing circular offerings through product-as-a-service payment plans. By encouraging reuse and recycling of materials and products, these payment plans can bring a lot of value to different stakeholders:

  • merchants get recurring sales and more loyal customers through repetitive product usage and sales cycles. These predictable loops help plan sales and marketing cycles more accurately. Additional revenue can be generated by reselling returned products;

  • consumers get lower price points, access to the latest products, and peace of mind that their old products are reused;

  • banks who finance this payment plan get infinite interests and payments as consumers are willing to pay for staying in a binding relationship, which is inherent in the product-as-a-service model;

  • the environment is cared for and fewer resources are needed to produce new products since old ones are kept in circulation or recycled properly.

Benefits of circular economy

#4 Sustainability Trend for E-Commerce Merchants: Innovative Technologies That Endorse Sustainability

Efficient use of technology fuels sustainability. For instance, it's estimated that AI could reduce worldwide greenhouse gas emissions by 4% in 2030. Yet, high-level systems tend to be an option for merchants that have more resources on their hands.

So, what can I do to embrace this sustainability trend for e-commerce merchants?

In fact, there are accessible ways to embrace technology. A positive environmental impact comes from using technologies that help merchants launch sustainable product-as-a-service payment plans.

That's also what our payment platform is built for. It relies on 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 purchases, eliminating the risks for merchants. Customers never pay the full retail price, if they continue using this payment plan and return their used products.

Curious about how you can maximise the benefits of product-as-a-service model? Contact us already today!

bottom of page