Oct 25, 2021

Online marketplaces are a major retail sales channel, but can they also help with the industry’s sustainability ambitions?

How to Sell Sustainable Products in an Online Marketplace | Sustainable commerce consulting & advisory

There’s no denying it. E-commerce marketplaces are big business.

Reportedly, 50% of all global e-commerce sales are made through marketplaces.

Last year, a report by Wunderman Thompson Commerce found that 63% of consumers in major e-commerce markets have started their online buying journeys on Amazon’s marketplace alone, and that’s just the tip of the iceberg.

It’s clear that customers are turning more and more to marketplaces to find what they want when shopping online.

There are a number of reasons for this, including efficiency, convenience, and discovery. The strong SEO authority of marketplaces also means they often rank at the top of product search results, so somebody searching for, say, a blender in Google will often find a marketplace at the top of the results.

But increasingly another major consideration is impacting customer spending choices. And it’s one that online marketplaces may be well positioned to support.

Can E-Commerce Marketplaces Drive the Shift to Sustainability?

One of the biggest recent shifts in consumer buying behavior is the demand for sustainability and eco-friendly products and packaging. A major study by IBM found 57% of consumers are willing to change their purchasing habits to help reduce negative environmental impact, creating more demand for sustainable commerce consulting & advisory to help companies change their practices.

Almost eight in 10 respondents indicated that sustainability is important to them, which means we could see even more shoppers searching for sustainable options as millennials become older and wealthier–Gartner reported that 73% of that age group prioritize sustainability over price, which is a major shift in focus from even just a few decades ago.

However, shopping sustainably, whether it’s for second-hand products or for environmentally friendly new items, can be difficult for consumers.

Typically, finding suitable products involves more work on the part of the shopper as sustainable brands aren’t always prominently displayed or readily available. They may not be highly ranked in search engine results or as prominently advertised through social media. This is where marketplaces can play a key role.

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How Can Marketplace Operators Sell More Sustainable Products?

As a marketplace operator, you have the power to work with brands and manufacturers to introduce more sustainable products to your range without having to create them yourself. By putting products where customers are already starting their shopping journeys, you can make it easier for them to shop sustainably.

One way is to create a section or a filter dedicated to sustainable products to make it easier for customers to find them. Online marketplaces have a major advantage over other forms of retail in their capacity for crafting a guided shopping experience that can lead customers where you want them to go.

Also, as a marketplace operator, you can quickly respond to what customers are looking for by using customer behavioral data which is available to you by nature of your platform. Sustainable commerce consulting & advisory can help businesses to understand this customer behavioral data, as well as turning that data into actionable insights.

By adding more sustainable products to your marketplace, you are growing your business. You haveminimal risk, anddon’t need to take on additional manufacturing, supply chain and warehouse space.

Online marketplaces

Understanding the Business Models

Online marketplaces connect buyers and sellers at a global scale and are growing faster than we have ever seen businesses grow. What is the business model for selling products on an online marketplace?

Remember, every product listed on a marketplace comes with its own environmental footprint, even if the operator isn’t bearing that weight directly. This is where curation and a ‘less is more’ approach to product range can build customer favor.

As an extra bonus, marketplaces that are known for their sustainable product options may also see sales of other products boosted as customers prioritize shopping with trusted retailers. Sustainable commerce consulting & advisory can help to refine and hone this more-limited selection of products to optimize sustainability and profitability.

When you create a category within your marketplace dedicated to sustainable products, create strict criteria that sellers have to meet in order to be featured. This will give consumers confidence that what you’re selling is truly sustainable.

What Can Retailers and Brands Do to Improve Sustainability?

If you are a retailer or brand, you can use marketplaces to get your sustainable items in front of a larger audience, which can increase your sales and brand awareness. If you don’t already have an online store, it’s both faster and cheaper to start selling through a marketplace compared to launching your own e-commerce operation. Sustainable commerce consulting & advisory can help select the correct platform for maximum returns on your investments while helping to curate the selection of products available.

There may also be an opportunity for retailers in a certain niche to create their own sustainable marketplace. By curating great products and sellers, you can become the go-to option for customers seeking sustainable alternatives, and we can help you build a marketplace from scratch in a way that focuses on getting you to market as quickly as possible.

There may also be an opportunity for retailers in a certain niche to create their own sustainable marketplace.

An increasingly popular phenomenon is marketplaces offering second-hand and excess products. These marketplaces can use significantly lower carbon footprint and reduced waste as Unique Selling Points.

There are many examples of clever marketplaces connecting sellers and buyers of leftover restaurant food, groceries and second hand clothing, electronics and furniture. If your marketplace offers comprehensive product information and an emphasis on convenience, such as quality rating systems and fast deliveries, a customer can enjoy a great buying experience as well as a clean conscience.

As an operator of a marketplace dedicated to selling sustainable products it is also crucial to be strict with the criteria for selling. Define what sustainability means and then stick to that definition when creating guidelines for sellers.

How Important is Transparency?

Sustainability may be something most consumers are asking for, but not every retailer responds in an authentic way. Greenwashing – where a business makes misleading or false claims about their environmental credentials – is unfortunately a common practice.

Last year, the European Union conducted an investigation, in partnership with national consumer protection authorities, into 344 sustainability claims made by e-commerce retailers. It found that 42% of these claims were false or exaggerated and potentially even illegal. The results of the investigation are likely to feed into new EU legislation for sustainability claims.

As such, customers are becoming more discerning about what they buy and who they buy it from. Whether you are a marketplace operator or a seller through marketplaces, you can support the shift to sustainability through transparency. It should be clear to customers which products are sustainable and what makes them so.

42% of these claims were false or exaggerated and potentially even illegal.

One way to avoid greenwashing and false sustainability claims is to make it your policy to always give customers as much information as possible about how a product is manufactured, where it comes from, what it’s made of, and the brand’s business practices. This will benefit your brand in the long run and help you establish credibility in the eyes of the shopper.

Consider Behind-the-Scenes Sustainability as Well

Marketplace retailers also need to consider sustainability from a back-end perspective. It’s not just about the product that the customer is buying, but the entire way that the brand operates. This includes the marketplace operator, as every facet of the transaction must be considered before rightfully referring to something as sustainable.

Earlier this year Amazon commissioned an independent report (published by Oliver Wyman and LAE) into the environmental impact of e-commerce in Europe. It found that e-commerce generated 1.5 to 2.9 times lower the amount of greenhouse gas emissions compared to shopping in physical stores. This shows that choosing to shop through an online marketplace can reduce a customer’s environmental burden.

However, it doesn’t have to stop there. Examine your own sustainable business practices and determine how they can be altered to be more eco-friendly. Maybe it’s even just something like using biodegradable packaging or making use of energy-saving procedures within the office. Then, of course, tell people about it in a press release or in your “About Us” section.

E-commerce generated 1.5 to 2.9 times lower the amount of greenhouse gas emissions compared to shopping in physical stores.

What Else Can Retailers Do For Sustainability?

A lot of this push for sustainability and sustainable products comes down to mindset. You have to really want to make the change to be more sustainable and not just say what you think customers want to hear. Customers are very savvy these days, and they can tell when a fast one is being pulled on them.

One way to do this is to use data to increase efficiency, which in turn reduces the environmental impact of your operations. By gathering and utilizing data, retailers can reduce waste throughout their entire business, particularly in the supply chain. This includes manufacturing, transport, and waste management.

If you aim to increase the sustainable product offering in your marketplace, you have the power to put pressure on your suppliers to improve their sustainability credentials, if they want to keep selling through your marketplace.

You may consider looking into hiring sustainable commerce consulting & advisory services, as their experience in transitioning companies into sustainable practices can help to reduce the headaches that can come with making this change for yourself.

What is End-to-End Sustainability?

As consumer demand for sustainability increases, marketplaces are fulfilling an important role as a destination for sustainable options. It’s vital, though, that retailers and operators aren’t just thinking about front-end sustainability in the form of products, but also their back-end operational sustainability.

The best thing about this is that you don’t have to do it alone.

Working with an online marketplace partner can help you create a platform that is sustainably minded from end-to-end. And this is what will really move the needle on sustainability in retail.

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