The global growth of e-commerce

Unsurprisingly, the world drastically changed in 2020 with the global outbreak of COVID-19. With entire countries under quarantine, consumers were buying most of their goods online, resulting in a surge of growth in e-commerce. According to Morgan Stanley, in 2019 15% of global retail sales were online, but by the end of 2021 that number rose to 21%. Now, according to Forbes, the global e-commerce market is expected to total up to 6.3 trillion USD by the end of 2023.

Though the e-commerce boom came about out of necessity, consumer behaviour shows that it is here to stay. Brian Nowak, an equity analyst at Morgan Stanley explains, "We believe that the COVID-driven bump will not flatten future e-commerce growth. Across the world we have yet to see a ceiling for e-commerce penetration." While the growth in e-commerce seems to be sustaining itself, consumers are asking more and more, 'how sustainable are the companies that I am buying from?'.

Consumers desire more sustainable options

While consumers increasingly want their fashion options to be available at the click of a cursor, they also want to be supporting companies that are working towards increasingly sustainable solutions. According to a 2019 Lyst report that tracked and analysed data for six million fashion products from over 12,000 online stores, searches with sustainability-related keywords increased 75%. Additionally, their 2021 report found that the searches for plant-dyed products increased 131% and vegan leather products increased 178%.

And not only are consumers searching for more sustainable and ethical ways of dressing, but they are also purchasing accordingly. The paper Green is the New White: How Virtue Motivates Green Product Purchase, published in 2021 in the Journal of Business Ethics found that 70% of consumers want to consume more responsibly, and 66% are willing to pay more for responsible products.

So, with the boom in e-commerce and consumers' desire to support more ethical fashion, how can the industry capitalise on these opportunities?

Someone makes an online purchase on their laptop using a credit card



Radical transparency for ethical fashion e-commerce

Because of consumers' desire to support businesses embracing ethical practices, they are more aware than ever of empty statements and greenwashing efforts. Thus, increasingly, e-commerce consumers do their research and are quick to condemn companies that make misleading claims. Therefore, one path forward for fashion companies to grow with the boom in e-commerce is to embrace radical transparency.

The phrase 'radical transparency' was coined by Ray Dalio of investment banking firm Bridgewater, to describe his business philosophy of a direct, open, and honest culture of decision-making and communications. Now, companies across many industries are taking this approach to gain the trust of consumers in this culture of wariness. Fashion companies aiming to take part in ethical e-commerce then could utilise radical transparency to communicate openly with potential customers about the sustainability challenges associated with order fulfilment. For example, the emissions from last-mile delivery transportation and returns, as well as the material utilised for extra packaging, are all sustainability challenges when selling through e-commerce versus traditional retail stores. Forbes also calls this practice as building a 'glass box brand' in which consumers on the outside can freely look in to observe the business practices, processes, and people that their purchases would support.

In order for fashion companies to grow towards ethical e-commerce, partnering with a logistics provider that can offer radical transparency for the transportation and logistics of the fashion supply chain will be necessary. Technological innovations have enabled logistics companies the possibility to track and report emissions throughout all modes of transportation. These innovations are particularly helpful for companies aiming to capitalise on the growth in e-commerce, as it encourages companies to be mindful of not only their environmental impact in production, but also when delivering products directly to the consumer.

Ethical fashion e-commerce for sustainable growth

While lifestyle companies embrace the boom in e-commerce and bring their fashions directly to their consumers doorsteps, keeping pace with the demand of ethical fashion will be imperative for long-term growth. Luckily, the industry can partner with logistics companies to embrace radical transparency, earning the trust of consumers and encouraging business growth while ensuring environmental and social responsibility.