Reconciling innovation and respect for the environment in e-commerce
According to a study carried out by Fevad in February 2021, 89% of e-tailers consider eco-responsibility to be a priority. They, therefore, wish to meet the expectations of consumers who are increasingly attentive to this type of approach. In fact, 31% of e-buyers say that they prefer merchant sites that implement favorable initiatives for the environment.
Everyone agrees on the principle, but in concrete terms, is it possible to reconcile the reduction of the carbon impact of e-commerce with its economic development via new technologies. Known to be energy-consuming, such as artificial intelligence?
The carbon footprint of e-commerce is a more divisive issue than it seems. On the one hand, the great defenders of online sales claim that e-commerce is a more ecological way of consuming than physical commerce since it avoids individual car journeys to the shop. On the other hand, studies show that, on the contrary, e-commerce is a source of multiple pollutions and that its expansion is becoming problematic for the planet.
The environmental issues of e-commerce
Looking at the reality, it is true that e-commerce belongs to a wider sector, the digital sector. Whose impact on the environment is now obvious. Indeed, the digital industry generates 3.8% of the world’s GHG emissions (the equivalent of the footprint of three countries like France); 10% of the electricity produced is consumed by this sector and there were 53 million tonnes of electrical waste in 2019. According to our estimates, for each transaction, people consult an average of fifteen web pages to search for product information, identify themselves and pay. In total, this represents 9,900 tonnes of greenhouse gases in one year.
Apart from the energy consumption caused by the very use of an e-commerce site. There is the construction of massive warehouses that artificially alter the soil and deprive us of natural carbon sinks. Obviously, there are all the logistics behind the site: the increase in deliveries, and international transport of goods (with e-commerce anyone can bring a product from the other side of the world). Or the multiplication of polluting packaging (plastic bubble wrap, polystyrene…); and the sending of empty packages with oversized boxes causing more frequent deliveries.
E-retailers, therefore, have many challenges to meet in order to move towards carbon neutrality. They will have to carry out three projects in parallel: eco-responsibility, innovation, and profitability, three parameters that should no longer be in conflict with each other but on the contrary should be in synergy.
Innovation to survive and stand out
The years 2020 and 2021, marked by a succession of lockdown and restrictions caused by the health crisis, have literally made online sales explode. The closure of physical shops has triggered the decision of many retailers to focus on the online market. They decided to bet on omnichannel and launch their merchant site. All these new outsiders have arrived in an already very competitive market; with large brands such as Amazon or C-discount leaving little room for small e-tailers with more modest financial means. To survive in this jungle of online sales, innovating to stand out is quite simply essential.
By definition, an e-tailer must do everything possible to sell. First of all, his site must be well referenced on search engines. Then when the Internet user arrives at it, the aim is obviously to encourage the act of buying. Artificial intelligence methods are gradually becoming essential solutions for solving the new problems facing e-tailers.
AI and respect for the environment: a possible combination
Artificial intelligence is now powerful enough to process the volume of data collected by e-tailers, on customers, products, stocks, orders, etc. It will be able to interpret complex behaviors for which traditional programming methods are outdated. The e-commerce giants are already using artificial intelligence at practically every level of their value chain. Small or large structures, will have to jump into the breach. If they do not want to be swallowed up by the leaders. The applications of artificial intelligence are gradually being democratized, and are no longer reserved for a small elite of e-tailers. Nevertheless, AI is still a way to differentiate oneself from the competition. It is no longer time to study this possibility. It is, therefore, necessary to prepare now so as not to miss the start and fall behind irretrievably.
However, the question of investing in technologies known to be energy-intensive such as AI (storage of larger data in data centers, training of AI models with large computing power, etc.) may arise. When e-tailers also aim to decarbonize their activity. If at first sight, technological innovation and environmental protection seem to be paradoxical. It is nevertheless possible to combine these two dimensions.
Innovating responsibly
In January 2021, the Institute for Responsible Digital Science created a working group on responsible AI. Mobilizing expert contributors who are working on two axes: AI and the environment and AI and ethics. The results of this research for a greener AI will soon be delivered and should help find solutions for a more environmentally friendly use of artificial intelligence.
Application development
From the point of view of the development of applications integrating AI bricks, good eco-design practices can already be applied. For example, favoring existing technologies, and open-source AI models allows not to spend energy training an algorithm to redo what has been done before. To develop these existing technologies, the R&T phases will always require energy. However, scientific research is essential to innovate and find new solutions that are environmentally friendly (taking care to avoid rebound effects).
Awareness of the environment
The environmental awareness of digital players is still very recent. But the new generations of tech, sensitive to ecological issues; will have their cards to play to initiate the ecological transformation of the digital sector.
Already, some of the big names in the digital sector are beginning to question their own environmental credentials. Facebook, for example, is now using green energy for its research. In any case, if these digital giants want to continue to create a business; they will have to innovate in a way that respects our environment.
In view of the imminent shortage of materials (rare earth elements, precious metals, etc.) essential to the production of digital objects; it is high time to find new solutions to continue to benefit from digital services. Such as online shopping!
A 360° vision of the reduction of its carbon footprint
For e-tailers who wish to both drive their energy transition and move towards innovative technologies such as AI; a global reflection on the carbon footprint of their entire business must be conducted. They can start by applying the principles of “digital responsibility”. By using the precepts of eco-design as part of a redesign or improvement of their site; e-tailers can significantly reduce the weight of their page. But also the number of requests they generate and thus reduce the carbon footprint of their online shop.
Apart from the purely digital aspect, like any company, an e-commerce business must carry out a complete carbon assessment to detect and measure the sources of its emissions. The objective will then be to find solutions to reduce them as much as possible. And finally, take into account the non-reducible emissions by starting a voluntary carbon compensation process (acquisition of carbon credits in order to counterbalance the emissions that are difficult to reduce).
E-tailers can also make strategic choices to use AI sparingly. In particular, they should focus on including technologies that add real value to their customers or to the management of their business. This notion of usefulness is fundamental to targeting needs and not spending energy on AI modules that are gimmicky or ill-suited to their structure.
When AI is no longer the problem, but the solution!
We should also not forget that if AI causes ecological problems, it also solves many of them. In the case of e-commerce, AI can be a great help to decarbonize its value chain. In logistics, AI applications are able to calculate the shortest delivery routes. But also to optimize parcel sizes to avoid sending empty parcels, etc. AI can be a powerful tool for the respect of the environment.
We could also imagine other decision-making tools. Such as a search engine that locates the most environmentally friendly suppliers and other commercial partners. An algorithm that is capable of auditing e-commerce to indicate the carbon reduction actions to be taken…
An e-tailer can also integrate AI to analyze the causes of its returns and determine solutions to avoid them. By reducing the number of returns, delivery routes will also be reduced. With AI tools, e-commerce will also be able to predict its sales more accurately and therefore manage its stock in just time. This would allow rationalizing its supplier orders (reduction of the number of journeys there too). As well as the manufacturing of products, source of carbon emissions, and energy expenses.
The potential of AI is therefore an opportunity to develop its business but also to find solutions to reduce its carbon footprint. And by ricochet effect to achieve productivity gains.
Government action for sustainable e-commerce
Government report
In February 2021, a government report “For a sustainable development of online sales” revealed a number of measures envisaged to mitigate the impact on the environment of e-commerce. Amongst this catalog of measures to be followed is the idea of a “sustainable e-commerce” label. This would allow customers to clearly identify the “most responsible market players”. This label would go further than the current regulation and would include environmental, social, and economic criteria, typical of CSR (Corporate Social Responsibility).
The report also talks about promoting the omnichannel nature of French VSEs/SMEs, with the aim of revitalizing local trade and therefore the short circuit. Giving the means to small structures to develop and open up to online sales would also be a good way to compete with the global web giants.
The actions of the heavyweights of e-commerce in France
The heavyweights of French e-commerce have also initiated actions to move towards greater respect for the environment. Some fifteen brands (Cdiscount, La Redoute, Veepee, Fnac-Darty, etc.) signed a charter in July 2021. In front of the government represented by the Minister for Ecological Transition, Barbara Pompili, and the Secretary of State for Digital, Cédric O. This charter commits its signatories to reduce their carbon footprint by making concrete efforts on three factors:
- reducing the volume of packaging
- the transition to low-emission delivery vehicles
- more visible communication with solutions offered to their customers so that they can make their purchases in a more responsible manner.
Finally
It is undeniable that e-commerce, and more broadly the digital sector, must undergo reforms to continue to develop without disastrous consequences for the planet. From the smallest e-tailer to the web giants, via digital service companies and public authorities. Each player can contribute to this renewal at its own level. This search for greener solutions is a formidable driving force for committing to innovations that are both useful to the company and to the society of tomorrow. Respect for the environment in e-commerce is a challenge that starts now.
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