Written by Ben Labay
Global events have led many individuals to re-examine what’s important to them. The Covid-19 pandemic, war, high-profile social justice issues, and active climate change campaigns are a few contributing factors that recently changed consumer behavior.
Individuals now seek out conscientious businesses more than ever before, and it’s a trend that’s only going to get bigger.
In the latest PWC survey, fifty-two percent of respondents said they are more eco-friendly than six months ago, and about half of respondents consciously consider factors related to sustainability when making purchase decisions.
Unscrupulous business practices, greenwashing, and brands that remain silent on important matters are feeling the consequence of consumers voting with their feet. Seventy-six percent of consumers told PWC they would discontinue relations with companies that treat employees, communities, and the environment poorly.
Why conscientious practices need your attention
Putting personal morals aside, regulatory requirements and the need to mitigate reputational risks provide good impetus for businesses to adopt ethical and sustainable practices. But what's more, there's a financial incentive beyond just capitalizing on increased demand.
Many businesses view conscientious practices as a cost, but researchers found a positive relationship between ESG (Environmental, Social, and Governance) focused companies and financial performance in 58% of the businesses studied. Only 8% of companies in the study showed a negative relationship between the two. Focusing on a triple bottom line (people, planet, and profit) can help measure and focus leaders on these profit-positive strategies.
While leadership buy-in is necessary to see movement on ESG initiatives, experimentation and customer experience teams can help in a big way. Applying the experimentation methodology across business units can help inform the direction of potential initiatives, drive innovation, and validate ideas.
Discover what matters most to your customers
While most ecommerce models have prominent environmental, social, and governance dimensions they can impact–such as ethical supply chains and environmentally friendly products/packaging–there are 100s of nuanced issues brands could pick. It’s therefore wise to spend time understanding what’s most important to the different customer segments you serve.
The opportunity for experimentation teams is to provide the data and insights that leadership needs to move forward with ESG initiatives (alongside other business/market analysis.)
For example, analysis of customer reviews, social listening, or user research throughout the customer journey can pinpoint customer concerns or questions at different stages of the experience. You might discover that users browsing your website often want to know the source of specific products or materials. When customers receive their product, they might be disappointed by the amount of packaging.
Experimentation can not only help to inform the what and where of ESG initiatives but the how. A/B testing can be used to understanding which psychological principles yield behavioral changes in consumers. There’s even a UK-based global social purpose organization–the Behavioural Insights Team (BIT), that focuses on applying behavioral insights to inform policy and improve public services, following nudge theory.
Experimentation teams can help uncover:
- What are customers' views and emotions toward different conscientious topics?
- What questions or concerns arise throughout the user journey around ESG topics?
- What tradeoffs are customers willing to make?
- What barriers stop customers from choosing products that promote ESG efforts?
- What expectations do customers have around ESG programs?
- How can you narrow the “intention-action gap? E.g., what makes someone go from saying they care about the environment to making environmentally friendly purchases.
Inspire business model and product innovations
An experimental mindset and scientific methodology can be applied not only to website experiences but also;
- Back-office operations
- Product development
- Offline elements of the customer journey
New ideas can often fail to get off the ground, especially significant changes around new business models or product development (think: changing ecommerce operations from selling items to renting items). Companies often languish in indecision or discount ideas completely.
This is where experimentation can help guide decisions and provide direction on potential strategies the business wants to employ.
For example, Homie, a Dutch pay-per-use home appliance company, used Business Experimentation for Sustainability (BES), a framework for testing sustainability-focused changes. Homie used experimentation to settle on a pay-per-use business model after they discovered it had the potential to stimulate sustainable consumption patterns versus other business models.
Marketing and digital optimization for good
If the Internet were a country, it would be the 7th largest polluter.
Experimentation teams and their work to optimize experiences can contribute to environmental efforts while improving things for customers.
“The average website produces 1.76g of CO2 for every page view, so a site with 100,000 page views per month emits 2,112kg of CO2 every year. The more complex a website is, the more energy it requires to load – and the greater its climate impact.” Wired
Improving overall page speed, reducing the size of images, or reducing the volume of marketing emails can all impact your carbon footprint. While efforts in this area might feel negligible, it’s an area that most experimentation teams can influence directly. Plus, it’s often a win-win; many of the carbon-reducing concepts are also good practices from a user experience perspective.
How does this all apply to your business?
This is the fourth installment in our nine-part ecommerce optimization series. Keep reading to help inform your organization about the latest challenges in Ecommerce experimentation. If you'd like to learn more about optimizing your customer experience and how we can help build the processes and methodologies alongside your ecommerce team, contact me.
Look out for the 5th installment of the nine-part series next week.