Making Ecommerce More Sustainable
This week,Ā Damian Estrada, the Founder and CEO ofĀ Mandatum, discussed what he is working on. Mandatum is turning e-commerce’s unsustainable inefficiencies into money for the Amazon Rainforests, savings for shoppers, and profits for brands. Below are the key takeaways from the conversation.
Why does this matter?
- The Amazon rainforest accounts for more than half of the entire world’s remaining rainforests. It is also referred to as the āLungs of the Planet’ because it produces more than 20% of the world’s oxygen. It plays a critical role in maintaining climate function regionally and globally, a contribution which everyone depends on.
- In Colombia, where 10% of the Amazon Rainforest resides and covers 46% of the country, there is deforestation, which causes wildfires, impacts the biodiversity, and displaces natives, generating extreme poverty, unemployment, illnesses, and violence.
- Despite all the effort to resolve these problems, The Natural Conservancy confirmed that there is a $700B nature financing gap (per year) on top of the $140B spent in 2019.
- 99.9% of today’s shopping is made in an unsustainable way. Sustainable shopping is not only about what you shop, but also about the way you shop for anything.
- Shopping trend makers like Amazon and Walmart continue pushing for value-added services that encourage the need for “immediacy,” like 2-hour delivery, 1-day free shipping, and same-day store pick-up. There is no such thing as a free lunch, so it makes products more expensive for shoppers and less profitable for brands. It also demands more resources, like additional inventory (one day of inventory in the USA accounts for $12 billion in resources), non-optimal packaging, and non-optimal last mile.
- There are inefficiencies in the value chain process that can be turned into resources. Specifically, for every $100 spent on durable goods, up to $50 go to immediacy.
- Mandatumās My Planet Accountā¢ helps people to understand the fight against climate change, the problem, the solutions at hand, and measure how their actions impact the environment.
Whatās next?
- We could close the nature conservation gap with the money we spend on immediacy when shopping for durable goods.
- The solution helps commerce to transition gradually to a sustainable way of shopping while generating an immediate impact in the climate change fight by making monetary donations to protect our planet.
- Shoppers use Mandatum to build a discount in seconds, pay for their climate actions, and make commerce more sustainable. Consumers and brands save money and pay for their climate actions at no cost to them, including making donations to protect forests and oceans and offsetting their carbon footprint. In exchange, shoppers wait longer for their deliveries.
- The 2020s is the decade of the fight against climate change with 73% of Americans willing to change shopping habits to help the environment and 79% of Americans supporting the Endangered Species Act.
- As soon as the sustainable mainstream starts to realize that the current way to shop for any product is not sustainable, they will look for a sustainable alternative way to shop.
- Everyone ā rich or poor ā will contribute with monetary donations to protect rainforests and oceans at no cost to them.
Future Outlook
We will have zero-inventory virtual and brick and mortar showrooms for durable goods, where shoppers will decide the products they want and place the build-to-order order on their cell phones or in-store screens. Brand creators will delivery direct to the consumer. Marketplaces and retailers will continue having the immediacy approach mostly for fast-moving consumer goods, and the right amount of inventory to serve durable goods orders that will demand immediate delivery. The catch is that those products will have a high premium when compared to the prices available via Mandatum.
About The Author
Daniel currently works at Lawrence Livermore National Laboratory. His original assignment was to maintain and update facility safety documentation for all facilities on-site, and perform risk analysis. Over time, his role has expanded to leading continuous improvement efforts through product management.
Concurrently, Daniel volunteers with Techstars, helping organize startup weekends, and with the American Institute of Chemical Engineers, organizing events on the local and national levels of the organization. He also volunteers with One World, and previously with Powerhouse Ventures, to source and screen startups for potential investment.
Daniel holds a BS in Chemical Engineering from UC Davis, and recently completed coursework in energy innovation from Stanford. His passion is at the intersection of sustainability, innovation, and business.