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What Makes An E-Commerce Business Ethical?

Diversity and  Sustainability in E-Commerce

The following guest blog was written by Karolyn Gore.

Consumers in the new millennium care deeply about ethics and brand purpose, as found in Accenture Strategy’s Global Consumer Pulse Research. Consumers under the age of 30 (millennials and Gen-Z’ers) feel particularly strong about this issue, backing retailers that aim to achieve something more than profit. Ethical values, authenticity and sustainability are just a few values driving the purchasing decisions of younger buyers, many of whom are choosing online stores in lieu of brick and mortar shops for everything from technology to fashion. The e-commerce industry is subjected to the same scrutiny as physical shops, so businesses selling products and services online should work to meet customer demands.

The Pillars Of Ethical E-Commerce

In his thesis, Business Ethics in E-commerce, K Nguyen describes the four key pillars required by ethical e-commerce organizations. They are accountability, responsibility, liability, and due process. Accountability is centered on having specific people accountable for the consequences of the actions of team members, teams, or the whole organization. Responsibility involves accepting duties, obligations, and costs of decisions that are made. Liability extends the consequences of accountability and responsibility to the legal sphere. Finally, due process is, as defined by A Richardson, “the means by which ethical constraints are placed on administrative decision-making.” 

Prioritizing Ethics In E-Commerce

The above pillars need to be clear and well-defined in order to deal with the many issues that can arise during e-commerce transactions. Some of the most common problems faced by companies involve e-commerce security (e.g. utilizing data obtained in an ethical manner), diversity, and sustainability (ensuring a company aims to deliver quality goods and services while adopting practices that lower its carbon footprint). When it comes to customer information, companies should have robust cybersecurity strategies set up, covering everything from identity theft to fraud. New technologies such as A.I. should be used to identify potentially fraudulent activity and to glean information on the stage of the customer journey that is most under threat. Leaders should ensure that employees are well versed on roles, goals, and procedures. They should clearly define how customer issues are dealt with, and choose solutions that are not only ethical, but also more likely to work in the long-term.

Authentic Diversity Is Crucial E-Commerce

Since many organizations target clients from a plethora of different backgrounds and geographical locations, building a truly diverse organization should be a key value for companies wishing to achieve success. A recent study by the Boston Consultancy Group found that companies with a diverse leadership team enjoyed a 19% higher revenue. Diversity spans racial, ethnic, socioeconomic, geographic, academic, religious, political, sexual, and other categories. It is a goal that involves everything from hiring a diverse leadership team, right through to choosing diverse models to showcase products sold. It should also target sales ads on different platforms, depending on respective target markets. Nielsen highlights, for instance, that Asian Americans are more likely than any other group to have internet-connected TVs; black consumers are more likely to interact with brands on social media; and Instagram’s audience mainly comprises women. All these facts should be taken into account when deciding what platforms to invest time and money in.

Sustainability And E-Commerce

There are many steps involved in building a sustainable e-commerce company that online buyers can identify with. These include the manufacture and sale of sustainable items made from recycled and recyclable products, the publication of efforts made to use renewable energy and reduce water waste, and of course, packaging. Instead of using plastics, for instance, companies can package their items in cardboard, paper, or bio-based polybags, which are home compostable. Smart design can also lead to the design of smaller packages, which lower shipping costs since they enable more items to be fitted into transport.

Building a reputation as an ethical e-commerce business is vital for online organizations wishing to survive in competitive markets. An ethical workplace can be achieved by defining key roles and responsibilities, and by ensuring that decision makers form a diverse team. Diversity and sustainability should be demonstrated and published, with social media channels and targeted ads being an important way to communicate one’s values and goals to clients.

You can contact Karolyn at: [email protected].

Posted by Steven Mintz, aka Ethics Sage, on November 25, 2020. Dr. Mintz is the author of Beyond Happiness and Meaning: Transforming Your Life Through Ethical Behavior that is available on Amazon. You can sign up for his newsletter and learn more about his activities at: https://www.stevenmintzethics.com/. Follow him on Facebook at: https://www.facebook.com/StevenMintzEthics.