Unilever: How to make eCommerce a force for good
There is a unique opportunity to rewrite the nascent rules of eCommerce to ensure that online retail and delivery systems embrace the sustainability agenda, writes Unilever’s Joe Comiskey.
The global retail landscape is undergoing a sea change. An ever-increasing range of products and services to cater to a growing global consumer base puts strain on the planet’s resources and regional economies, while consumer preferences are shifting towards brands that contribute towards a better standard of life globally, through their business practices as much as their products or services.
These two trends represent a long-term challenge that confronts all retailers and, for brands such as Unilever, an opportunity to galvanise a radically different future for global commerce.
One of the most immediate effects of this balancing act is that sustainability and the development of ethical business models are no longer seen as a business being charitable. Instead, retailers are expected to demonstrate their positive eco-intent if they are to achieve lasting business success. The race is on not only to prioritise sustainable business practices, but to then prove it to customers.
A key area to build on with this in mind is with eCommerce. The market is still young, and growing at speed, which means there is opportunity to drive change in this field for the better. This year the UK is set to reach £52.3 billion in eCommerce sales, increasing by a total of 16.2% year-on-year from £44.97 billion in 2014. Moreover, it will constitute 15.2% of the entire UK retail market. ECommerce is big business and will continue to grow significantly in years to come.
However, the extent to which eCommerce is capable of achieving sustainability across the retail sector as a whole is perhaps underestimated. When it comes to carbon footprint, in-store shopping exudes much higher levels of CO2 per transaction than making purchases online.
One study looking at the “last mile delivery“, the final trip a product makes between the retailer and the customer’s home, found that consumers who travel to the shop by car have to buy 24 items in that one trip to reduce their carbon footprint to the size of just one item bought online.
On a social level, online platforms that enable peer-to-peer business models and boutique e-retailers are already stoking a valuable new breed of sharing economies, powered by technology, which contribute positively to the lives and livelihoods of people all around the world. The benefits appear endless.
Promising as it is, there is much more work to do in this area. ECommerce currently offers significant value to the consumer in convenience, while for businesses it has clear economic and sustainability benefits. These advantages do not come easily though, and leaders will need to rethink their organisations’ ways of working to achieve the lofty projections of eCommerce value for businesses and for the planet.
However, we needn’t go it alone. What if companies collaborated on their sustainability efforts in order to transform the entire supply chain into a force for good?
Unilever is currently driving a sustainability initiative designed to unify retailers in making sustainable living commonplace, which involves leveraging eCommerce and burgeoning technologies to transform the industry.
As well as acting on a new, more conscientious consumer mentality, fundamental to the programme is understanding that big businesses ignore sustainability to their absolute detriment. Consider the potential value for businesses to remain distinct in the eyes of consumers, retailers and suppliers for their innovative approaches to these crucial industry issues.
As part of tackling the challenges of innovation together, large companies should understand the value of start-ups to bring disruptive new ways of thinking, which companies are in a great position to implement.
Tech start-ups which are agile, creative and bursting with new ideas, are primed to inject a new perspective to existing markets and make a valuable contribution to sustainability in the process. ECommerce is no different.
When Warby Parker, for instance, launched its online eyewear service four years ago, it demonstrated the impact start-ups can have. The brand offers a “Home Try-On” business model, whereby customers can order up to five pairs of glasses to try on at home for as many as five days without charge.
Warby Parker showed consumers that eCommerce could be an attractive alternative to the traditional brick-and-mortar set-up, and that the model could succeed commercially while contributing to sustainable practices. Plus, for every pair of glasses Warby Parker sells, the company donates a pair to a person in need.
Retail corporations and tech start-ups often share the same goals but, due to their different approaches, they could seem like an incongruous alliance. However, as the need for bigger, bolder solutions to the sustainability challenge looms larger in the global community, corporations and start-ups must find a mutually beneficial way to work together, in order to capitalise on each other’s considerable expertise and talent.
Unilever’s ReHack 2015 event demonstrates this ethos in action. On June 25-26, the Unilever Foundry – Unilever’s initiative to match business needs with an array of start-up talent – will bring tech start-ups together with global retailers, tech giants and specialists.
This time, the hackathon is run with the ambition to build initiatives that could revolutionise businesses’ eCommerce and sustainability strategies on a major scale. For businesses of all kinds to drive this industry sea change, the key will be collaboration through shared goals – we’re all in this together, after all.
Joe Comiskey is UK eCommerce capability, innovation and strategy team leader at Unilever