Does the Future of Retail lie in Sustainability?

According to a Nielsen survey from 2018, 73% of global consumers said they would definitely change their consumption habits to reduce environmental impact.

In the same study, almost half of the respondents (49%) said they would pay higher-than-average prices for products with high-quality and safety standards.

And despite the events and economic uncertainty of 2020, these trends look set to continue. 

In fact, an IBM study from the beginning of the year, found that consumer shopping habits have fundamentally changed, as people increasingly embrace social causes and seek out brands that align with their values. 

CapGemini’s study from July reiterates this, reporting that 79% are changing their purchase preferences based on sustainability.

These are trends that organisations across the globe – both public and private sector – are taking notice of as consumer habits change and demand grows for more sustainable ways of buying, consuming and recycling products and services.


The rise of sustainable retail

It’s a trend that’s nowhere more keenly felt that in the retail sector – and unfortunately just ‘going online’ in an effort to reduce environmental impact isn’t going to cut it.

Indeed, even e-commerce has taken a battering in recent months and years as its rapid growth has actually pointed to an increase in environmental impact – be that because of the rise in packaging now used to deliver goods, or the supply chains that support e-commerce negatively impacting certain countries around the globe.

Consumers are paying more and more attention to what they’re buying online too.

Shipping needs to be environmentally friendly. 

Packaging needs to be recyclable. 

Employee workplaces need to be socially responsible. 

And the goods themselves need to be longer-lasting – ‘fast fashion’ even looks to be on its way out.


Future proofing your sustainable retail business

So how should retailers and e-commerce companies approach sustainability?

What can they do to embed sustainability in their working practices and then communicate these properly to the end consumer?

Because if they don’t, it’s pretty clear what will happen – consumers will go elsewhere!

The first step that companies need to take is to understand that this is not simply a case of a PR campaign or a bunch of short term tactics. It’s a strategic vision that needs to be embedded in the company ethos and that needs to thread through every internal process and external communication in your business.

That said, there are some easy places to start.


1. Review your brand values

If you’ve already got an established brand with history and equity, then you’ll need to find a balance here between coming up with something new and retaining what you’ve already got with your customers.

However, starting with your internal values and assessing whether or not they reflect changes in consumer behaviour is a good starting point. Then think about how you need to echo those changes in your external brand:

  • Is it a subtle change that can be done gradually over time? 
  • Or is it a bigger adjustment that you need to communicate externally


2. Consider your business operations

Sustainability doesn’t have to be something that’s 100% public-facing. It could mean changes to your business operations. For example, implementing sustainable shipping policies, reviewing your supply chain and suppliers for their sustainable practices, even reducing energy waste in your offices through smart tech. 

Sustainable values should be considered from every angle, and every employee within your organisation – no matter how small – should be held accountable and responsible for sustainable practices.

So yes, that means ensuring everyone is following the office recycling rules, that new suppliers are vetted based on their own sustainability policies, and that new products or services you’re developing support longer-term sustainability goals. 


3. Implement sustainable innovation

The lifeblood for many retail and e-commerce businesses is in innovation – developing new products, launching new online campaigns and, of course, winning new customers.

But being serious about sustainability means building it into your innovation processes too. This could mean how you research and develop new products – everything from the materials used to the packaging you create. Or it could mean supporting the resale of your used merchandise – either through a reseller marketplace or by ‘buying back’ old goods in exchange for new ones.

Sustainable innovation is all around us already so if you’re looking for inspiration, just remember the products and goods that you’re a customer of!


In the business of food? Then take note…

If you’re a grocery retailer, then you might be surprised to know that you already have access to a wide range of options when it comes to more sustainable business practices.


Just take a look at your sales figures, your current stock levels and your warehousing capacity, i.e. your data!

This data is a rich source of information when it comes to working out how to drive more sustainable processes. In fact, many retailers are already taking advantage of more advanced capabilities in Data Analytics and Machine Learning to understand behaviours across their entire supply chain, and are using that intelligence to order the right amount of produce, or price goods according to their expiry dates. It’s a very sophisticated but effective way of basically reducing food waste – and one that keeps your finance teams happy too by saving money!


The businesses already blazing a trail

But if you think this is just for the big corporates, then think again.

In fact, you’d be better to look at startups and scaleups for inspiration. And given they’re often operating within tighter budgets and more ambitious sales goals, there’s no excuse not to steal some of their ideas!

Take Olio as an example. A mobile app launched in 2015, their mission is to reduce food waste. They do this by connecting households with surplus food and other items, to those in their local neighbourhoods and communities who need these same items.

Or Oddbox, who ‘rescue’ odd and surplus fruit and veg, and then deliver it straight to your doorstep.

Then there are the fashion brands adopting more sustainable practices, such as Hurr for renting items of clothing instead of buying them, and Onloan, where you rent clothes via a monthly subscription.

And then there are the less obvious ones.

Gousto for example, whose sustainability practices cover everything from their packaging to their plastic pledge.

Gymshark, who track their carbon footprint and work in collaboration with The Better Cotton Initiative.

And the darlings of Scotland, BrewDog, who really are the ones to watch when it comes to sustainable production methods – from wind power to biogas, and even a transportation partnership with another trailblazing UK company, Arrival.

Finally, if consumer demand and inspiring business stories aren’t enough, then take a look at recent government initiatives. In the midst of everything else that the UK government has had to deal with in 2020, they are still 100% committed to sustainability goals and green programmes. 

Earlier this year, they announced a huge drive to ‘build back better’ in 2021, ensuring that the economic recovery from Covid would proactively support Climate Action and the Sustainable Development Goals. Not only that, but they’ve more recently announced a huge £80 million fund towards green jobs and national parks. 

Our educated guess is that any retail or e-commerce business looking to create sustainable operations in both the short and long term needs to sit up and take notice before it’s too late!


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