Green commerce and the rise of the conscious consumer

The commerce landscape is always evolving, as businesses adapt to changes in consumer needs (and wants) and other forces like changes in legislation impacting their industry. As we know from experience, some of these changes are short term, whereas some become more embedded in our new norm. Green commerce falls into the latter category.

Past generations generally followed a principle of only buying what was needed. Generations of “make do and mend” helped increase the longevity of items. But several factors, including growing product availability, influencers, and advertisers promoting new trends fueled consumer demand for the latest “must have” item.

However, this behavior is changing as consumers become aware of its long-term, environmental and socio-economic impacts. Today, conscious consumers are driving growth of rental and recommerce models.

Staggering stats reveal ugly impact

1. In 2019, research showed that approximately one garbage truck of clothing was burned or landfilled every second, (approximately 2,625kg of clothing). In one year, that would be enough to fill Sydney Harbour.
2. Another stunning report indicates that in the UK alone, the average consumer will accumulate a value of £32,000 (approximately $37,745) of unworn clothing during their lifetime.
3. The environmental impact isn’t limited to apparel. It can be seen across all industries. For example, reports indicate that each year, Europeans produce on average more than 16 kg of electrical waste per person from broken household appliances.

There’s a plethora of information available at the click of a button for us, as consumers, to become more and more aware of these issues and their impact.

A recent survey found that a growing proportion of consumers want to adopt a more sustainable lifestyle. Some have stopped buying some products due to ethical or sustainability concerns.

Generation Z is leading the green commerce charge by reducing how much they buy and reflecting on what they consume.

Green commerce: Conscious consumers drive change

As consumer awareness continues to grow, so are their expectations for brand transparency around sustainability. Consumers are increasingly researching the sustainability commitments of organizations, with particular interest in how they’re reducing packaging,  sourcing their materials, and managing their manufacturing.

Consumers are looking to reduce their environmental impact and want green commerce options to help them purchase less, for example through rental, recycling, and repair services.

It’s not only consumer behaviors that are helping to bring about this change – changes in legislation are also a factor. For example, the “Right to Repair” policy, which came into effect in Europe in 2021 requires that electronic goods sold to consumers, such as hairdryers and televisions, be repairable for 10 years.

So it’s no surprise that the term circular economy is becoming more prevalent in the everyday world of commerce, as momentum moves towards more sustainable models emerge alongside, or replace traditional, linear models.

Closing the loop: Reuse, rent, resell

While neither are new concepts, recommerce and rental commerce are gaining traction as more industries introduce these green commerce models alongside their traditional approaches.

At a high level, rental commerce provides consumers with access to goods, without full ownership. They enjoy a variety of new products, but support sustainability by recycling the items back into the market for others to enjoy. Recommerce gives consumers the option to buy pre-owned products, extending their use and keeping them out of the landfill.

There are many rental and re-commerce services appearing on the e-commerce scene, from seasonal “pop-up” shops selling pre-owned items, to one-off rentals and rental subscriptions allowing consumers to select several items at predetermined intervals. New apps help consumers rent items between themselves, often promoted via their social media profiles.

Green commerce business benefits & logistics

In addition to all the environmental benefits, rental and recommerce provide, both also can help brands expand into a new revenue channel. Green commerce models like these can help retailers boost customer engagement and expand their customer base by building a sense of community in how items are consumed.

• Managing inventory and logistics; for example, having items available when a consumer wishes to rent them
• Ensuring that items are returned on time and not damaged
• Making sure that item are authentic and in a good resell condition

However, much like there are various ways rentals can be offered as a service to consumers, there are also a range of technology platforms to help coordinate and manage the logistics, behind the scenes.

One way organizations can get started in the rental and recommerce business is by offering a small selection of items across the product range or running a seasonal recommerce pop-up-shop.

Rental and recommerce both require a change in how we think about material goods. But with data showing that eco-conscious commerce will only grow, businesses would do well to begin adapting today if they haven’t already.