Why E-commerce is Ripe for an Ethical Reckoning in 2022

By Ben Crudo

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[vc_row][vc_column][vc_column_text]Last year was a rough one for the platforms everyone loves to hate. From harmful marketing to dubious data management practices, several titans of social media came under increased scrutiny from all corners in 2021. But while Big Tech is taking the heat for poor practices, the truth is, many have been complicit – including my own industry, e-commerce. Retailers have leveraged these platforms to do business without asking too many questions about the ethics of the tools.

Here’s a wake-up call: it’s time for e-commerce to demand better and do better for our customers. There are three particular areas that retailers should align with consumer ethics before the reckoning comes for them.

Be customer conscious

Algorithms dictate so much of our lives — everything from finding our next favourite song to telling us which route to take home from work. Consequently, awareness is growing around just how much data one person can produce and how that can be exploited.

Consider this – a 2021 study found that 86% of consumers were growing concerned about their data privacy. With the rapid onset of the digital revolution, many companies seem to have forgotten that customers are VIPs. Simply put, the way we collect data must change.

In some jurisdictions, it’s becoming the law. New privacy rules in California give consumers the right to object to analytics being used on the data they produce, and the European Union has enacted the world’s toughest privacy and security law. These measures are important steps to empowering customers with some ownership over their data.

But they’re also a signal to retailers that the “don’t ask, don’t tell” approach isn’t an acceptable practice anymore. Now, more than ever, it will be on merchants to be proactive and preempt their customers’ questions about how their data are being used. Take IKEA, for example. The Swedish giant gives its app users the ability to edit and manage their data at any time. They’ve discovered when customers trust their information is safe, they provide better data, resulting in a more personalized shopping experience.

Indeed, there will be a competitive advantage for the businesses that treat their customers’ data with the same respect they treat their customers as people.

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Market mindfully

Historically, the biggest marketing consideration was whether the product arrived as advertised. But now, from fake reviews to inauthentic product photos, buying things online has opened a whole new can of ethical worms.

For some companies, the ethics of marketing goes beyond arguments of real vs. fake. Now, even spending ad dollars on Facebook can be an ethical choice. After hate speech on the social platform reached a fever pitch, outerwear giant Patagonia led a boycott, taking its advertising elsewhere and proving it was willing to walk the talk. That bold stance paid off, becoming central to the brand’s marketing success.

While Patagonia’s approach is admirable, it’s not possible for every business. For many, if not most, it’s not feasible to take a stand against the behemoth by taking ad dollars elsewhere. But it’s not always necessary to take an all-or-nothing approach to ethics. 

Rather, it’s paramount that companies be mindful about how their marketing works. Is the advertisement transparent, or misleading? Can consumers opt-out of being targeted if they aren’t interested? Will the behaviour or product being marketed actually improve the consumer’s wellbeing or is it not actually in their interests? Know your market, and know what they’ll respect. 

Ultimately, it’s up to companies to draw their own lines in the sand. But retailers have the power to choose strategies they’re proud of — and history shows us it often pays off.

Products you can get behind

Lastly, to avoid ethical reckoning, brands need to see the products they sell as an opportunity to reflect their values. It pays to be up-front about things like product origin, materials, and manufacturing. E-commerce has made these things so easy to hide, but customers catch on quickly, and they respect transparency.

Take Canadian-based Pelacase, for example. They sell compostable phone cases and actually break down the data on how many resources were used in the making of their product. That’s a refreshing contrast to major players like Shien, whose customers have only learned of shady labour practices and toxic materials thanks to probing journalists.

Not everything is going to be eco-friendly and sustainable, but value-driven customers want to be able to evaluate their options. Particularly in an increasingly online environment, it’s critical that companies be open, not only about where their products come from, but where they’ll end up. 

As the condition of the world changes, we are starting to develop new ethical concerns. Concerned citizens and lawmakers have come for Big Tech. Our industry should look within to see what we can do to get better before the world demands we be better.

Sure, there’s a cost for companies to steer themselves in a more ethical direction, but in the end, it’s far more costly not to take a stand for more ethical e-commerce.

Ben Crudo is CEO of Diff Agency. A retailer turned technologist, Ben is an e-commerce expert helping retailers win today and tomorrow.[/vc_column_text][/vc_column][/vc_row]