Sustainability is more than just a buzzword – it’s a crucial factor that can make or break your online retail business. Why? Your customers care about the environmental impact of their purchases, and they expect you to do the same. 72% of customers are willing to pay more for sustainable products and are more likely to buy from stores that are committed to sustainability.
How do you know how sustainable your eCommerce store is? Let’s take a look at some sustainability metrics that can help you find out.
8 Sustainability Metrics to Track in eCommerce
Sustainability metrics are indicators that help you track and evaluate your eCommerce store’s environmental impact. They can help you identify areas for improvement, set goals and targets, and communicate your progress to your customers.
Here are some sustainability metrics to track:
1. Carbon Footprint
Carbon footprint is the amount of greenhouse gas emissions generated by your eCommerce business, such as sourcing, production, packaging, shipping, and returns. It’s one of the most important sustainability metrics because it indicates how you impact climate change, one of the world’s most pressing issues.
To calculate your carbon footprint, use the following formula:
Total CO2 emissions = (energy consumption x emission factor) + (transportation emissions) + (packaging emissions).
By regularly measuring and monitoring your carbon footprint, you can identify areas for improvement, implement energy-efficient practices, and offset your emissions through carbon offset projects.
When you use ReturnGO to manage returns, ReturnGO shows you how much CO2 emissions you have been able to reduce.
2. Energy Consumption
Energy consumption is the amount of energy used by your store, including things like electricity, gas, and fuel. Keeping track of your energy consumption is important because it impacts your operating costs and carbon footprint.
To measure your energy consumption, you use the following formula:
Total energy consumption = (sum of electricity usage in kWh) + (sum of fuel usage in liters or cubic feet).
By monitoring and reducing your energy consumption, you can lower your operational costs, decrease your carbon footprint, and contribute to a more sustainable business model.
3. Waste Generation
Waste generation is the amount of waste produced by your eCommerce business, such as packaging waste, product waste, and return waste. As a sustainability indicator, it measures how efficient your resources are and how much impact you have on landfills and oceans.
To track your waste generation, measure the weight and volume of each product and order that ends up as waste.
To measure your waste generation, use the following formula:
Total waste generation = (weight of packaging materials) + (weight of discarded products) + (weight of returned products waste).
By implementing waste reduction strategies like using eco-friendly packaging materials, promoting recycling, and minimizing product waste, you can reduce your environmental impact and make your business more sustainable.
4. Recycling Rate
Recycling rate is the percentage of waste that your business recycles or reuses instead of sending to landfill. This includes things such as packaging materials, returned products, and unsold inventory.
Tracking your recycling rate is essential for seeing how well you’re managing your waste and reducing your environmental impact.
To calculate your recycling rate, use the following formula:
Recycling rate = (weight of recycled materials) / (total weight of waste generated).
By improving your recycling rate through implementing recycling programs, partnering with recycling facilities, and educating customers about proper disposal, you can minimize landfill waste and conserve valuable resources.
5. Return Rate
Return rate is the percentage of orders that are returned by customers. It’s an essential sustainability metric because it affects your customer satisfaction, revenue, and environmental impact.
To measure your return rate, use the following formula:
Return rate = (number of returned products) / (total number of products sold) x 100.
Monitoring your return rate helps you identify product quality issues, customer satisfaction trends, and areas for improvement in your eCommerce supply chain and returns management.
6. Return Costs
Return costs are the expenses associated with processing and managing product returns, including shipping, restocking, refurbishing, and disposal costs.
To calculate your return costs, add up all the expenses associated with returns, including shipping costs, labor costs, and any additional costs for repairing or disposing of returned items.
Understanding and minimizing return costs can help optimize your eCommerce store’s operations, improve the customer experience, and reduce waste generation.
7. Social Responsibility
Social responsibility measures the extent to which your eCommerce store engages in ethical and sustainable practices, such as fair labor conditions, community involvement, and support for charitable causes.
Evaluating social responsibility is qualitative and involves assessing your store’s policies, supplier practices, employee welfare, and philanthropic initiatives.
By promoting fair trade, using responsibly sourced materials, and reducing environmental impacts, you can demonstrate your commitment to sustainability and social responsibility.
8. Product Lifecycle
Product lifecycle is the average lifespan of your products before they become obsolete or unusable, which indicates how long-lasting and reliable your products are.
Measuring the length of your product lifecycle can give you insights into the amount of waste you generate.
To measure your product lifecycle, you need to evaluate the environmental impacts at each stage, such as resource depletion, energy consumption, emissions, and waste generation.
By considering the entire lifecycle of your products, you can identify opportunities for improvement, implement sustainable design and manufacturing practices, and promote circular economy principles such as recycling and product reuse.
How to Improve eCommerce Sustainability
Now that you know how to track these sustainability metrics, how can you improve them?
Here are some tips to help you make your eCommerce store more sustainable:
Identify Areas for Improvement
The first step is to assess your current sustainability metrics and identify areas for improvement.
You can use a SWOT analysis (strengths, weaknesses, opportunities, threats) or a gap analysis (current state, desired state, gap) to determine where there’s room for improvement in your business’ sustainable practices.
Reduce Your Carbon Footprint
Implement strategies to reduce your carbon footprint, such as optimizing shipping routes, using eco-friendly packaging materials, and exploring renewable energy options.
You can also offset your carbon emissions by investing in carbon credits or projects that reduce greenhouse gas emissions.
Reduce the amount of waste you produce by implementing waste reduction measures, promoting recycling, and optimizing inventory management to minimize excess stock.
Likewise, you can improve product quality and durability to extend the product lifecycle and reduce the need for frequent replacements.
Encourage Responsible Consumption
Encourage your customers to make responsible choices by promoting sustainable products and educating customers about their environmental impact.
Offer incentives for customers to buy less, buy better, or buy circular (products that are designed for reuse or recycling).
Boost Your eCommerce Store’s Sustainability
By tracking these sustainability metrics, you can measure and improve your sustainability and gain a competitive advantage in the eCommerce market.
With ReturnGO, you can track your return rates, return costs, and carbon footprint to improve your sustainability levels and improve efficiency.
Ready to start tracking sustainability metrics for your eCommerce store? Try ReturnGO today and see how it can help you achieve eCommerce sustainability.