One of the key elements behind sustainability is efficiency. If we can do more with less… we are bound to be sustainable. The problem is, how much can we stretch our business to achieve this efficiency? How much can we reduce our waste, our carbon footprint, our resource consumption, and the general impact our business creates in our environment and community?
Not so long ago, the answer to this question would have been substantially less ‘efficient’ than our answer today. Why? Well, because now we can harness the power of AI to increase the sustainability of our business in ways impossible without this technology. In fact, AI's impact on sustainability is forecasted to be so powerful that we might even reach zero emissions/zero carbon footprint – something theoretically almost impossible before – thanks to it.
But how? To answer this vital question, we want to share with you some key ideas regarding sustainability presented in the B2B 2024 Digital Trends Report by Intershop that will surely help you achieve a more sustainable e-commerce thanks to AI-driven solutions.
E-commerce sustainability is now a plus for profitability?
Let's start by addressing the elephant in the room. Not so long ago, sustainability was considered an extra social responsibility action that brands and businesses pursued with the intent of looking better, sounding better, and projecting a better image overall.
As such, it was considered more a matter of marketing than an operational issue. Businesses, in fact, did not pursue sustainability as an improvement of their daily operations with the aim of being more profitable, which, at the end of the day, is the main goal of any business, but instead pursue sustainability as part of branding or marketing campaigns.
And don’t get me wrong. Still, sustainability remains important in the eyes of the general public: Following a survey by Savanta and Oracle, 70% of a broad spectrum of consumers and businesses in B2B would consider breaking off their relationship with a company if it did not take sustainability or social issues seriously.
Sustainability has become a major factor in customer loyalty. But it also is much more than just ‘good PR’ for your business. Sustainability is profitability.
Let’s break it down. A more sustainable warehouse management is also a more efficient warehouse management. If you can, for example, optimize your warehouse space to handle more products with fewer square meters of warehouse, you won’t need another physical expansion; thus, you won’t be required to pay another rent or buy another property, or increase your electricity, water, and human costs, just to mention a few obvious results.
In short, if you can do in a 10,000 square meters warehouse the same things another company does need 20,000 or 30,000 square meters, your business will – most likely – a lower operational cost. Because you are more efficient, it is as simple as that.
And still, according to MIT Sloan Management Review/Boston Consulting Group research published in 2017, “60% of companies have a sustainability strategy, but only 25% have developed a clear business case for their sustainability efforts,” and this is something that has not changed much in the last five years.
Businesses understand that sustainability is demanded by the general public, needed by the zeitgeist we are currently living in, and requested by governments all over the world, but many fail to understand that it is also a market demand, a competitive advantage that, in turn, can make you far more profitable.
Profitability is sustainable, and AI is the key
The key component that is making sustainability more achievable and more profitable than ever, is the application of the new AI-driven solutions for e-commerce and B2B platforms.
As explained in the Intershop B2B 2024 Digital Trends Report, AI can be used to improve sustainability and profitability in areas such as:
Supply chain optimization: AI is perfect for handling large amounts of data and analyzing it following sustainability and profitability criteria to optimize supply chain logistics, reducing transportation emissions and minimizing the overall environmental impact of the supply chain.
Implementing order management systems (OMS): OMS are powerful tools for any modern business. In fact, they are slowly becoming a standard if you want to be competitive in selling globally. These solutions, driven by AI, can help orchestrate all ordering and supply chain information to create a single source of information. This, in turn, can allow an AI to follow sustainable criteria in order management.
A criteria that will cut costs by bundling orders or selecting the friendliest, most efficient, and least polluting carrier, among many other things. All this, of course, is done at the speed of light.
Smart replenishment: By using AI and analyzing data related to customer interactions, user behavior, and demographics, businesses can implement smart product replenishment.
This leads to more accurate order forecasting based on the collective insights and preferences of various customer segments, resulting in improved customer loyalty and reduced churn.
Predictive inventory management: Finally, predictive inventory management, based on AI-driven demand forecasting and predictive analytics, can help businesses manage inventory more efficiently, reducing overstocking and minimizing the amount of excess inventory that goes to waste.
Just to mention a few. Overall, efficiency-based sustainability is, and will always be, profitable. The trick is to use the incredible processing power of AI, to constantly optimize operations and resource management to achieve a more efficient solution in each step of your business structure.
This creates a win-win scenario: a cleaner world, a healthier community, a more efficient resource management, less resource waste and consumption, and, of course, a more profitable business. That’s why sustainability is, and will remain, a major trend for B2B commerce in 2024.
But that is just the tip of the iceberg! You can check out more trends for B2B organizations to keep track of during this coming 2024 here!