eCommerce Through the Social Impact Lens
eCommerce is dominating contemporary business activities. The concept is ubiquitously expanding and does not promise to stop anytime soon–if ever. From the most influential global eCommerce companies to new startups found in developing countries, every company’s goal is to avoid death by constantly innovating.
The process of innovating does not only keep eCommerce companies afloat–it’s the key to their long-term success. The results keep them relevant and attractive to both the global market and local communities for whom they are making life and business transactions more efficient and convenient. This is also true for my company, HiConversion. As I introduced in my previous blog of this series, I cannot be more grateful to be leading this new exploration.
The Growth of E-Commerce
Since my relocation to the U.S. about two years ago, I can count the number of times I have been to brick and mortar stores to purchase items I need. Even if I ended up going, my first reaction to my thought of purchasing an item is to impulsively check online stores for suppliers, prices, ratings, and purchasing options. This is not only the case for me, but one of about 300 million online shoppers that will be in the U.S alone by 2023. Globally, the global market size for online shopping is projected to hit 4 trillion this year.
Already, China’s National Bureau of Statistics of China puts the country’s eCommerce growth at 24%, accounting for about 18.4% of national consumer retail sales. In the same year, Digital Commerce 360 reported a 15% eCommerce growth in the United States. As the rate of the Corona Virus increases in the coming weeks and months (hopefully intervention actions can mitigate the spread and curb the virus), several federal and state regulatory actions are being put in place. I am predicting a popular opinion that eCommerce sales will significantly increase due to the current trends.
Is eCommerce Growth Sustainable?
Sustainability has become a buzzword in the business world. All across various sectors and industries, you may apply it differently. Investopedia defines it simply as “focusing on meeting the needs of the present without compromising the ability of future generations to meet their needs.” In whatever way we apply this and other definitions, sustainability has three components, or the triple bottom line: social, environmental, and economic. Simply, the positive and negative decision of the company on the people, planet, and profits.
eCommerce growth may be economically sustainable, but it has extreme social and environmental impact, particularly from its human operations and packaging: plastic packing puffs and card boxes, which eventually affect our landfills and oceans. Several eCommerce companies, especially retail, have been putting measures in place to reduce their environmental footprints.
Amazon plans to reach net zero carbon emission across their operations by 2040. Walmart has been implementing sourcing 100 percent sustainable fibers and reducing manufacturing impact. The retail giant also seeks to achieve 100 percent recyclable, reusable or industrially compostable packaging for its private brand packaging by 2025.
Various companies are taking on similar initiatives. While these companies may be able to measure their direct environmental impact due to their products and services, there are other eCommerce companies like HiConversion that are strictly digital. There is a plethora of information available online about the science and arts of sustainable practices and their impact by eCommerce companies.
In this blog, I want to talk about my experience with the purchasing trends of millennials and GenZs, and what informs their purchasing decisions, particularly with eCommerce. Additionally, I will share how we have been discussing and planning internally about the ways in which HiConversion, as a digital company, is tapping into the potential of this movement to institute sustainable practices.
The Sustainable Purchase
There is a growing concern from consumers, particularly millennials and Gen Zs, that all businesses should embrace sustainable practices–most importantly concerning the environment. In a recent survey, 81% of respondents globally, across various ages and genders, reported that they believe companies should implement environmental programs. This rating ranked extremely high in importance for these groups of consumers.
About a week ago, a work colleague asked me about the headphones I was wearing. I assume he expected it to be a popular brand. No, it was not, but I chose to purchase them, for the second time, due to the company’s sustainable practices and ongoing educational program support to school kids across some African countries. This is my way of supporting what I care most about: education opportunities for young people. I have seen this purchasing trend for many of my millennial and Gen Z friends, and I believe this is the same for much of the population (the main target of most eCommerce companies now and in the future).
Sustainable Practices for eCommerce Companies Offering Digital Products
Yes, digital eCommerce companies also need to execute sustainable practices. HiConversion only sells digital products–software merchants use to improve their customer experiences. During the past few weeks, my team has been exploring sustainability practices for our company. We have focused our conversations around integrating sustainability as part of our corporate culture and ethical structure, rather than an external Corporate Social Responsibility practice.
With full support of our VP of Marketing and Product, Ben, my marketing teammates and I have agreed that sustainability should be a guiding principle to inform all or most of our business decisions. This process may be a gradual and radical, but we believe that the end results will contribute to the betterment of the world.
Among many things, we have been exploring the development of a social impact statement for our company and defining our purpose beyond addressing customers’ tech needs, sales and profits. Additionally, we considered how we as a company, and together as individuals, can ascribe social impact to our portfolios.
A major highlight for me is having to be leading the development of an additional eCommerce portfolio for the company, dedicated to supporting social impact works locally, and possibly internationally. In my next blog, I will share more about our plans to advance this initiative and what particular decisions we will make.
I want to note, importantly, that beyond the initiatives I have mentioned, there are several other ways eCommerce companies can adopt sustainable or social impact practices–specifically tailored to sectors, industries and even companies. This process could involve companies requiring their suppliers to source only sustainably made products and catering to employees’ welfare. This week, our COO asked that everyone works from home to observe the current COVID-19 situation.
In an additional note, he mentioned that this is a period for family, health, children, parents, friends, and coworkers, and anyone who needs flexibility should inform the team. He did not mention work–I was truly impressed.
Sustainability is a Safe, but Difficult Bet
I am often reminded by a saying: “If it were easy, everyone would do it.”
Sustainability is not yet a common practice because it is not a simple and easy process. But the long-term prospects definitely pay off. It requires strict regulations, integrated corporate structures and ethical practices, not to mention resources, time, and effort. It’s about doing good, and a company must do well to do good.
It can be both costly and complex for companies to adopt sustainability. Most of the decisions are based on longer timelines and intense strategies, which may affect short-term gains. It requires a company to focus less on short-term profiteering and consider long-term public good, which when achieved, also have the potential to attract huge revenues.
As we continue to explore social impact for HiConversion, we are committing to a big task of transitioning from “me and now” to “us and later,” shifting our focus from shareholders to stakeholders (people and planet). We are reminded of our fiduciary duties as a company, to be careful, to be loyal, and to be candid. With this in mind, we are taking on a bold and audacious plan of converting tech to a tool for social good as I will further discuss in my next blog.