'Eco-commerce' sites urge Americans to go green

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March 31, 2000
Web posted at: 8:21 a.m. EST (1321 GMT)

by Jennifer Couzin

(IDG) -- On Paris runways, chic may be leather shirts and pleated skirts, but on the Internet, the avant-garde look this spring is green.

Four new environmental sites selling everything from recycled plastic furniture to eco-friendly Post-it notes are ready for launch around Earth Day, April 22. Although their business strategies and target audiences differ, Green Home, ShopEco.com, Verde and WholePeople.com all plan to capitalize on America's growing ecological awareness.

The four players are stepping into a sparsely populated arena. Dominated so far by vitamin and organic food retailers like MotherNature.com and WholeFoods.com (soon to be replaced by WholePeople), the online "eco" market has attracted little attention compared with other retail specialties. But some entrepreneurs are saying, and hoping, it'll catch fire.

"Imagine walking into Target or Wal-Mart, only every product on the shelf has been selected for environmentally friendly qualities," says Lawrence Comras, CEO of San Francisco-based Green Home. "Over half of Americans indicate in one way or another that they would prefer to buy nontoxic, less wasteful, recycled versions of what they're already buying."

Comras, working out of his garage with 15 employees (five full-time), previously was a software designer -- an environmentally conscious one, he says. After working with some Internet startups, he recognized eco products as an untapped market online. The GreenHome.com site, slated to launch this spring, plans to sell environmentally friendly products, like cleaning supplies, and clothing made of organic cotton or hemp. Comras says the site will cater to mainstream America, a broader market than that of hard-core "green" types.

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Then there's ShopEco.com, founded by Mona Lisa Wallace, formerly an environmental attorney. Like Comras, she envisions her site as a green Wal-Mart. At launch, scheduled for April 22, ShopEco will offer household and office products, as well as clothes and food. Among the products she has tracked down are recycled computer disks and organic coffee. The company has signed contracts with more than 40 suppliers, including a company that makes electric cars and a one-woman soap business in Santa Cruz, Calif.

These two fledgling startups, along with Verde -- a site founded by Ted Turner's son-in-law Peek Garlington III that will provide broad eco content and environmentally friendly products -- are up against stiff competition from WholePeople.com. A spinoff of upscale market Whole Foods, WholePeople launches in March with $35 million in backing from Oak Investment Partners, Invesco, Private Capital, North Capital Partners and Essex Woodland Health Centers. The site has the benefit of the Whole Foods brand name and its 108 brick-and-mortar stores; Whole Foods controls 78 percent of the new company, with venture capitalists owning the rest. WholePeople also has a 16 percent stake in RealGoods.com, which sells a range of eco products.

Those running the eco sites -- an earnest, dedicated group that hopes to "lighten the footprint of humanity on the planet," as ShopEco's Wallace puts it -- are convinced that the online eco space will have no trouble attracting consumers. But the VCs, for a change, are holding onto their money. While WholePeople found funding and Verde enjoys Turner's backing, Green Home and ShopEco garnered only about $300,000 each, all in angel money. Both say they are in talks with VCs and expect to announce additional funding soon.

Online retailers, which for the most part believe the eco space is still in its infancy, generally welcome the competition. But while hastily acknowledging that eco-site executives have their hearts in the right place, some lose that warm-fuzzy tone when they size up the newcomers. At MotherNature.com, which sells organic foods and vitamins, Marketing VP Sharon Rice notes the business-to-consumer sector is stagnant, adding that she's surprised new sites are launching (though MotherNature is working to expand, adding more home products).

Tom Kay, who founded EcoMall.com in late 1994, is more blunt. "Johnny-come-latelies think that they can just throw stuff up there," he says. "This is a lifestyle type of commitment." Underlying Kay's fervor is a message: Don't even think of building an eco site if you're not 1,000 percent about saving the environment.

What that commitment entails is up for debate. One of the greatest challenges for any eco-commerce site lies in its definition of a "green product." Must a shirt be organic cotton, hemp or both? Can plastic products be sold, if they've been recycled? What value, if any, should be placed on the labor practices of a company the Net firm might buy from -- does it test on animals or use child labor? Finally, how should these factors be weighted to evaluate eco-friendliness?

"It's not a simple formula," says Arthur Weissman, president and CEO of Green Seal, a nonprofit organization in Washington that sets standards for environmentally friendly products. The new Web sites recognize that their success hinges, in part, on building consumer trust in their "greenness," or authenticity. In response, the two with the shallowest pockets -- Green Home and ShopEco -- are planning an elaborate approval system in which advisers screen products before they can be sold on the site. ShopEco rejects products with certain ingredients out of hand, while Green Home takes a more nuanced approach. ShopEco will not sell paint with fungicide, for example, while Green Home will sell it to residents in the South, where humidity causes paint-destroying fungus growth.

Green Home says it's erring on the side of inclusion. In addition to its expert panel, Green Home, like many sites, provides customers with detailed information about most products -- like the latest research on the product, what it is made of, how it was made and how it can be disposed of. WholePeople, meanwhile, has no formal screening process; it avoids certain ingredients and selects products that claim to be eco-friendly. WholePeople will, in the words of CEO John Mackey, "let our customers tell us what they want."

Consumer choice may be bedrock in other retail areas, but it can be problematic in the eco space. For one thing, the volume of product information may be overwhelming, especially to customers uneducated in environmental science. For another, it assumes that the consumer's choice is also the right choice for their environment. "To put all this ... information in front of [consumers] and expect them to understand it, I think that's disingenuous," says Weissman.

Balancing the need to run a successful business with the desire to lighten humanity's impact involves some compromise. Whether buyers in drought-stricken states should choose disposable diapers over cloth, because it hurts less to fill the landfills there than run the washing machine, is a dilemma no eco site is prepared to handle. The newly minted CEOs of fledgling eco Web sites are convinced, though, that business demands won't get in their way.

What may be more of a challenge is convincing people to opt for green in the first place. "People don't wake up in the morning and think, 'I want to buy an eco-friendly toaster,'" says John Savage, VP of e-commerce for GreenMountain.com, which sells sun- and wind-generated electricity.

Some taking on the challenge have a different tack: Convincing businesses to go green before worrying about individuals. Closing in on the b-to-c eco sites are those offering business-to-business solutions. Rona Fried launched SustainableBusiness.com over a year ago. She plans to add a b-to-b area that will sell green power, alongside a jobs database and content. Fried expects to see the number of eco b-to-b sites mushroom this year. Looks like there might not be empty eco space online much longer.

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