Sustainability and its importance in retail
It is no secret that sustainability is already one of the top priorities for retail and brands.
The weight it has acquired in consumers’ purchasing decisions is overwhelming, and more importantly, it will grow exponentially in the future. As consumers demand greater commitment from brands, retailers need to rethink the entire value chain and adopt initiatives to deliver on these sustainability goals.
Retailers need to rethink the entire value chain and adopt initiatives to deliver on sustainability goals.
Green’ pillars in the retail world
According to a study by Oney and OpinionWay, the ethical and sustainable behaviour of brands and retailers play a key role in the purchasing decision process and consumer expectations. Thus, 9 out of 10 consumers want more commitment from brands so that they can consume better.
This is something we have talked about before at CAAD. Much more demanding, purchasing decisions, especially among millennials and generation Z, no longer depend only on the amount and quality of the product or service, but also on aspects related to sustainability and ethics.
This is the era of green retail: a way of transforming traditional points of sale (or creating new ones), taking into account the fundamental pillar of being friendly and respectful with the planet.
This paradigm shift offers more sustainable products and processes under the premise of zero waste or carbon dioxide emissions, and entails rethinking the entire value chain, from the production system to the method of distribution, energy expenditure, the cost of window displays and screens, the dissemination of offers and promotions, etc.
How are retail business models reacting? One of the main bets is conscious digitalisation. Many brands and retailers are changing the way they disseminate their promotions towards digital alternatives, with greater traceability and less impact on the environment.
Another basic measure is the second life of products and recycling. Starting with the textile industry, which is one of the most polluting industries, but which surely leads the way in CSR, as well as a technology sector in which the reconditioning of products contributes to reducing technological waste.
Transforming business models, minimising impact, also involves new ways of buying. There is a clear trend towards eco-responsible consumption, which is ultimately a competitive advantage. How can this be achieved? By giving the customer an offer that is more committed to the environment, reducing energy consumption in the shop, improving manufacturing and distribution processes, using reusable materials… The basis, in short, on which today’s retail is changing and growing.
Commitment unchanged despite inflation and rising costs
According to the latest data from Sensormatic Solutions, consumers have not budged one iota in their commitment to sustainability despite the pressure of rising living costs. This has meant that demand for green retail is growing despite rising inflation in recent years and falling purchasing power in our wallets.
In their survey of more than 5000 European shoppers, 1 in 3 European shoppers confirm that they are now more sustainable-minded in the wake of the pandemic. And it is Spanish consumers who have been most concerned about making greener purchases since the start of Covid-19 (40%), closely followed by the British (37%).
The analysis also indicates that we are more “price elastic” when it comes to sustainable products, and that green retail practices continue to drive customer loyalty. So much so that 3 out of 4 consumers say they are willing to pay at least 5% more for sustainable products, a figure that rises to 81% of Italian and Spanish shoppers. In addition, 40% say that local sourcing that reduces supply chain emissions would build loyalty, and 27% say that sustainable delivery options would encourage them to buy more regularly from a brand. Finally, 60% of Europeans would also like the retailers they buy from to reduce waste, including packaging waste, more.
3 out of 4 consumers say they are willing to pay at least 5% more for sustainable products.
How to be a more sustainable retailer?
This is the million-dollar question for many brands and companies in the sector. Sustainable practices” are a whole world in terms of how difficult or difficult they are to implement, the costs they may entail, the profitability or effectiveness of their implementation, and so on.
But it is true that there are numerous actions that retailers can take ‘here and now’ to start becoming more sustainable. Starting with the installation of energy-efficient displays, the use of alternative packaging, participation in recycling programmes, etc.
But there is much more that can be done, by retailers, in the fight against climate change, excessive waste, negligent working conditions, etc. to achieve environmentally sustainable retailing:
- Energy-efficient equipment, lights and appliances: This is the basis of everything, because of its simplicity and the direct savings it brings. Replacing traditional light bulbs and lights with LEDs or CFLs is a must.
- Paper, less and less: The digitisation of the business also involves, although it sounds obvious, minimising the use of paper, opting for digital receipts and invoices, for example.
- Improving waste management: it is no longer just a legal obligation, but consumers around the world are increasingly looking at how businesses and brands dispose of waste. And, of course, how and to what extent they recycle.
- Eco-friendly packaging: The fight to reduce environmental impact also begins with materials, containers and packaging. It is also one of the best branding opportunities.
- Make the world a better place for your customers: It’s no longer just what you do as a retailer, but what you allow and let your customers do to reduce their impact. Consumers want to know that they are reducing their carbon footprint in their purchasing decisions. To do this, it is crucial to inform them about your sustainability policies, how they should change their consumption habits, and why your retailer is helping them to be more environmentally friendly. Not surprisingly, according to Forbes magazine, 88% of consumers want brands to help them reduce their carbon footprint.
Among the sustainable retail initiatives, we can highlight fashion shops such as Kiabi, which has launched a second-hand clothing line; Zara, with its new 100% ecological shop concept; or C&A, which empties its shop windows to show the impact of our actions on climate change. Desigual, under its ‘Love the World’ line, also reports on its reduced environmental impact thanks to the use of sustainable fibres in its products and/or collections made from recycled denim. Even Kiabi itself, Camaïeu, or Zalando offer to rent clothing and accessories to reduce their carbon footprint and encourage recycling.
The textile industry is certainly one of the most polluting industries. It is estimated that in Spain alone, around 990,000 tonnes of textile products end up in landfill every year. Thus, other brands such as H&M, Mango or Inditex already allow customers to bring in their old garments so that they can be recycled.
Among the DIY, home and sports majors, Decathlon has been selling second-hand items for years, both in shops and online, and Ikea and Conforama have joined them.
Another example of this new way of shopping in the retail world can be seen in flagship stores such as Carrefour, which expects to have 500 shops offering 1,000 products with reusable packaging by the end of 2025. Or Aldi, whose sustainability commitments include making its product packaging reusable, recyclable or compostable by 2025, and reducing packaging material across the range by at least 15%.
El e-commerce tiene mucho que decir
El e-commerce continúa creciendo tras la pandemia a pasos agigantados, y se espera que siga haciéndolo en los próximos años, si bien a un ritmo menor que en 2020 y 2021. Y precisamente, la clave de su nuevo reimpulso estará en la RSE y la sostenibilidad. Este modelo de negocio en el que vive inmerso el retail también es ineficiente y no sostenible en demasiados casos.
Lo que el mercado y los consumidores están demostrando es que las organizaciones que apuestan por la sostenibilidad real generan valor y se desmarcan de la competencia.
Para alcanzar un e-commerce con menor impacto ambiental, hay 4 claves fundamentales:
- Disminuir el número de trayectos en los transportes, dar alternativas a la entrega a domicilio y priorizar proveedores de transporte comprometidos con el medio ambiente.
- Ajustar el tamaño del embalaje al producto reduce el consumo de materia prima y optimiza el transporte.
- Desincentivar la compra compulsiva que luego lleva a devoluciones, fomentar la compra de proximidad, duradera o de segunda mano.
- Comunicar y extender el compromiso con la sostenibilidad a toda la cadena de valor, clientes, proveedores y sociedad en general.