Photo by Markus Spiske from Pexels
It’ll come as no surprise to many of you that Amazon, now the largest retailer in the world, doesn’t operate its business in a way that honors the rainforest and river it was named after. While the company may publish its goals for improving sustainability, most of its actual operations are based on optimizing profit.
It’s also no secret that we, as a society, are in the midst of a convenience revolution. Fueled by shifts in technology and purchase power, businesses are evolving to keep up with consumer preference—which now includes same-day shipping, subscription boxes, and ordering through smart home assistants. Amazon has arguably contributed to and benefited from this trend the most.
Some call this new demand for nearly-instant gratification the “Amazon Effect,” seeing as the e-commerce behemoth has forced its competitors to adapt by showing that fast and cheap shipping of nearly any product is not just possible, but preferable. Amazon surpassed Walmart as the world’s largest retailer last year. Even during the midst of a global pandemic, Amazon reaped $75.5 billion in sales in the first quarter of 2020 (up $15 billion from last year during the same time). This not only shows consumer demand—but consumer reliance.
With this consumer behavior in mind (aka wanting-a-product-in-my-hands-right-now, or better yet, before-I-even-think-to-order-it), have you thought about why you see certain products at the top of your Amazon search results?
It’s because of the A9 algorithm. Amazon’s algorithm is the system that decides which Amazon product listings will be displayed first. It’s not surprising that products are ranked higher if they match with your keyword search and have a strong sales history with high conversion rate. In other words, the products that are most relevant, have appealing prices, and sell the most appear at the top. What is slightly more surprising is that Amazon allegedly optimized the algorithm last year to boost items from its own brands. And, since these products have the most exposure, they typically stay at the top in this perpetual hamster-wheel of profit.
So, why does this matter? Because the products that are pushed to consumers are not the products that are made of sustainably-sourced materials, with a clean supply chain, and the environment in mind. While it’s not shocking that Amazon is more concerned with making sure its algorithm optimizes profit by balancing sales performance, price, text-match relevancy, and availability of stock—that doesn’t mean that product sustainability couldn’t be added to the mix.
Despite the culture of convenience and same-day shipping that helped Amazon go from a bookseller to its own e-commerce economy, Millennials and Gen Z have another emerging preference: supporting sustainable companies and products.
According to The State of Consumer Spending, Generation Z and Millennials are the most likely generations to buy from sustainable brands and are most willing to pay more for sustainable products. As these generations, especially Gen Z, take over more and more of the market, retailers—even giants like Amazon—will have to start making changes to business models and supply chains to stay relevant.
We’re already seeing this begin, with companies of all sizes publishing sustainability goals, feeling pressure to publicly support social justice organizations, and building marketing campaigns about what they are doing for the planet. Amazon has even created a webpage that details its sustainability goals around operations, packaging, employees, supply chain, community, and governance.
Then, the real question becomes: why does Amazon feel pressure to be net zero carbon by 2040 but not to act through its algorithm to optimize sustainable products today?
I’m sure that the answer to why Amazon hasn’t done something like this involves the copious amount of money it makes by keeping the profit-driven algorithm as it is. But, providing an avenue for sustainably-sourced products to make it to the top of search results actually wouldn’t be too difficult. And, considering consumer preferences of the generations with the most buying power, Amazon might even make more money from it (maybe even enough money to invest in actually going net zero by 2040).
While we, as consumers, don’t have direct access to changing the algorithm, we do have some power here.
(1) We control the algorithm indirectly through our spending power.
When we’re making purchases on Amazon or any retailer, our power lies in voting with our dollars. We, as consumers, show the company that we value products that are good for people and the planet (not just products with low prices) when we do a bit of research and buy sustainably-sourced goods from mission-driven companies, even if the product itself is a little more expensive.
(2) Continue to engage with mission-driven companies or sustainable products that you like.
A lot of the purchases we make from online retailers may be recurring. Once you find a seller or product that aligns with your values and meets your needs as a consumer, buy them again and then see if there are other products that could be a good fit. For example, I slowly transitioned all my household cleaners and soaps to Method products because they are a planet-friendly company that produces natural cleaners (and I know it’s legit because the company has a B Corp certification, like us!). Also, Rockridge furnished its office spaces in a similar fashion (read more about our space here).
(3) Think about sharing these practices with others through sustainable gift-giving or recommendations.
The cool thing about buying power is that companies do pivot to meet the demands of their consumers eventually. Even though the readers of this article only comprise a small piece of Amazon’s consumer-base (unless it goes MEGA viral), a tangible way to scale impact is to share what you know with others. Whenever you’re buying a gift or recommending a product, think about transitioning to greener ways of gifting and recommending by sharing sustainable brands.
Overall, despite a ranking bias against sustainable products in e-commerce algorithms (like Amazon’s) we do still have some power here to demand better (unless you code Amazon’s algorithm, then you could do A LOT). Support brands that track their supply chains and source sustainably. Continue to engage by being a loyal customer of these brands, and make sure to share what you find with others.
About Alexandra Smith
Alexandra “Alex” Smith is a student at Belmont University College of Law and summer law clerk at Think Tennessee. Her awesome thinking started as a 2018-19 graduate fellow at Rockridge Venture Law. (Actually, it started before then, but we like to take as much credit as possible anticipating all the monumental things Alex will do on the other side of law school.)
About RVL®
Rockridge Venture Law®, or RVL®, was launched in 2017 to become the preeminent intellectual property and technology firm across the Appalachian Innovation Corridor. We now have offices in Chattanooga, Durham, and Nashville, and represent clients and interests globally. Our services include all aspects of intellectual property, litigation, M&A, privacy, technology transactions, and ventures.
In 2018 and 2019, we were recognized as B Corp Best for the World for our commitment to triple bottom line business practices. RVL® is also certified by 1% for the Planet for its nonprofit partnerships advancing stewardship and sustainability. RVL’s nonprofit partners in 2020 include Green|Spaces, Living Lands and Waters, Mustard Seed Ranch, and the NC State Lulu Games Social and Environmental Impact Competition.
Our pioneering environmental and social impact programs attract top-notch legal talent and assure our clients of missional Rockridge Venture Law alignment with their corporate values. Rockridge uniquely addresses two modern profit drivers: innovation (uptake and development), and corporate social responsibility. We’re Building Today’s Company for Tomorrow’s Economy® by leading clients through the dizzying array of information controls, by helping them to develop and monetize proprietary assets, and by enabling their impactful products, programs, and principles.
