The future reimagined

The Five Ways eCommerce Equals Equality

Future of Growth

Ecommerce is growing at an incredible pace – and with anything that moves fast and grows quickly, some of the outcomes are great, others not-so-great. There is, however one huge positive force that comes with the expansion of ecommerce. Can you guess what it is? Hint: it’s a word you can’t spell without “quality.”

Did you know, that by the year 2022, every fifth sale in retail will be done online? Also, can you believe that retail ecommerce has been growing at a pace of well over 20% per year, reaching 3.5 trillion dollars in sales for 2019? Yeah, that’s kind of a big deal, and at this rate ecommerce is changing the way we shop and perceive retail as a whole. 

While all of this growth in volume and revenue spells out great news for ecommerce and related businesses such as online stores, payment service providers and logistics partners, the rising culture of buying online has also gotten its share of criticism. The more pessimistic discussions revolve around many different themes, such as how packaging materials pose a waste problem, online shopping may have its security issues and sometimes, just sometimes, consumers feel like they are being growth-hacked (i.e. duped) into buying things they don’t actually need.

While no system is perfect, we at Posti have noticed that there is one very strong positive theme that ecommerce does not get credit for – at least not as much as it should. And that theme is, in one word equality. Believe it or not, equality is a positive force that ecommerce is boosting in our world, and there are many examples of how equality factors into ecommerce – or vice versa. Here are five ways how ecommerce is bringing more equality into the world:

1. Ecommerce brings everything closer

Online shopping brings the whole world even to secluded areas. For example, one of the most sparsely populated areas in the world is Lapland in Northern Finland, but ecommerce has enabled the Lappish population to connect with the world in new ways.

The proof is in the data; as Posti’s Arttu Hollmérus, VP of Large Domestic Customers, Parcel & Ecommerce states: “While about 85% of packages we deliver go to larger metropolitan areas, the remaining 15% of orders come from areas where people actually order much more frequently. For example, people in far-away Lapland order 25% more often than people in the most populated areas in Finland."

2. Logistics in ecommerce are sustainably produced

According to Posti’s Hollmérus, the biggest environmental impact in ecommerce is not how products are delivered, but the products that consumers have bought. “We are constantly thinking about ‘The Three P’s: People, Profit and Planet, and we think a lot about our Planet when we design and develop new ways to make ecommerce deliveries more efficient.

”As concrete examples, Hollmérus notes that Posti has been carbon neutral for quite some time, and has been investing in a package locker network that enables smoother pick-up and drop-off for consumers’ packages. “In ecommerce logistics, the delivery of products is relatively eco-efficient already, but the product returns from consumers back to online retailers cause unnecessary back-and-forth movement where no one really wins: not the retailer, not the consumer nor the logistics provider.”

3. When food trends meet ecommerce, everyone gets more free time

One big movement especially in metropolitan areas is related to food. Not just what we eat, but how we get food or groceries delivered to us. Now that food delivery services and online grocery shopping are more accessible than ever, consumers can access more free time and, for example, share domestic work more evenly.

“When people can order larger quantities of groceries straight to the house, just to give an example, we can save lots of time with shopping online and getting the goods delivered to us instead of having to go to the shops. At the same time, we can order larger quantities at once and save a lot of money as well as time”, Arttu Hollmérus elaborates. This is one approach to how just one area of ecommerce is freeing up more free time and money and providing basically everyone with more free time regardless of social status.

4. Ecommerce enables better peer-to-peer trade than ever

P2P commerce, or peer-to-peer trade, or in layman’s terms, 2nd hand shopping is going through a renaissance of sorts, with online marketplaces enabling consumers to get their hands on the same shopping and sales channels that online retailers have.

We spoke to Timo Huhtamäki, Marketplace Director at Tori.fi, Finland’s leading ‘Customer-to-Customer Marketplace’ about how better P2P trade brings about more equality. “When we enable people to access a huge selection of used goods, we can provide consumers with more affordable options to match their needs. For example furnishing a 1-bedroom apartment for a student can cost up to 10,000€ if you buy everything new, when the 2nd hand marketplace could offer the same goods for 1,500€.” In essence, a well-performing ecommerce ecosystem opens up new opportunities to shop sustainably and save money towards a better future.

5. C2C markets free up unknown amounts of capital

Another fantastic effect of peer-to-peer online shopping is that it gives consumers a good view into how much their existing belongings are worth. As Tori.fi’s Huhtamäki states “The  linear economic growth model is built on the idea of selling new goods – this is one reason why there is no data on ‘the balance sheet of things’ in our economies. What this balance sheet would illustrate is the 2nd hand market value of goods we already own. The fact is, that when consumers buy good quality products from brands that keep their value, these products can be turned into cold cash in P2P trade. Basically, if someone owns a Louis Vuitton handbag, they can easily sell it 2nd hand and receive money back that is not kept track of in our current economic model – so there is plenty of financial potential sitting at consumers’ homes at all times.”

Opening up the online shopping channels to consumers, we find ourselves in a world where everyone has access to new streams of wealth. On one hand we can make money from what we own in case hard times come around, and on the other, knowing that better quality products fetch higher prices on the 2nd hand market, even low-income households can purchase better quality products. “The liquidity of the products we own is an important aspect in P2P trade; when we buy better quality products, they may be more expensive at face value, but they usually are easier to sell on the 2nd hand market with most of the original value intact. Retail stores could actually communicate the potential resale values of the new products they sell to enable consumers to make smarter, more sustainable decisions.”

With all of these viewpoints into how ecommerce is bringing about a higher level of equality in terms of location, well-being and personal finance, we here at Posti are really excited to be part of the positive change that ecommerce will enable in the near future. With that, we welcome all of our colleagues throughout the online shopping value chain to be part of this positive change, and hope to keep up the discussion going forward, so feel free to get in touch here.

If you are interested in finding out more about ecommerce and sustainability, check out our latest research on these topics (and more), here (and here).

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