Sustainability in the retail sector: trend or reality?
Much more demanding, purchasing decisions, especially between millennials and Generation Z, no longer only depend on the amount and quality of the product or service, aspects related to sustainability and ethics are also valued.
To continue fulfilling consumer demands, all companies in the retail sector and the business world in general, are changing their philosophy and way of doing business to be more sustainable. Because for consumers it not only matters that brands do well, they want them to give the best of themselves and not only worry about economic aspects, but also monitor their social and environmental impact.
To sum up, consumers want companies to be sustainable. In this article we want to reflect on the state of sustainability in the retail sector and whether it is a trend or a reality that is causing the sector to change in favor of responsible and sustainable consumption and to meet the demands of the youngest and most demanding public: Millennials and Gen Z.
The scarcity of resources, the global data on poverty, the increasing presence of plastics in the sea or the consequences of climate change are some of the issues that have put sustainability in the spotlight. For society in general, but especially the younger ones, being sustainable is not an option, it is an imperative if we want the world to improve or, at least, not to get worse. However, is sustainability possible in the retail sector?
Sustainability in the retail sector: a change driven by demanding consumers
Consumer habits vary according to various indicators: age, sex, population, economic level … However, in recent years we have seen that consumers have changed their mind: they no longer search for products at bargain prices regardless of quality. Now the rules of the game in the purchase decision also include factors such as the environment, human rights or the circular economy.
These new consumption habits can be seen more clearly among the youngest people, especially in the generations known as millennials (22-35 years old) and Generation Z (16-21). According to GlobalWebindex data, 6 out of 10 millennials would pay more for ecological and sustainable products. So would 58% of Generation Z (16-21). We are therefore facing a global trend, with a consumer concerned and committed to the planet, not only from an environmental point of view.
6 out of 10 millennials would pay more for ecological and sustainable products
Years ago we were unable to decipher labels but we now analyze them in detail. We want to know the origin of the products, their composition, whether they can be recycled … and, in addition, we are committed to local trade to avoid the reduction in emissions caused by the transport of goods from different cities or even between different countries of the world.
Society claims and requires brands to share their commitment. We also want brands, in addition to meeting our needs, to develop a more civic and environmentally friendly, more social business model…
Sustainability in the retail sector: much more than recycling
Sustainability, like Corporate Social Responsibility, has become a form of business that no sector, not even retail, is turning its back on.
What started by recycling or making donations to third sector entities, without a doubt very good actions, has become over the years a business philosophy where economic aspects are not the only important thing: brands become more critical with themselves and they try to make their activity more sustainable, conscious and responsible, providing added value to their public and to the world in general.
Businesses are integrating sustainability throughout the entire production chain, from raw materials to product preparation or sale. In all these stages of production, work is being done to achieve, for example, being more efficient, reducing energy consumption, etc.
Incorporating sustainability into the business model
Sustainability for many businesses is becoming a “bedside book”, that cornerstone on which the entire business model is based. But … What aspects does a sustainable company take into account?
- Energy saving
- Environmental Protection
- Efficiency in the use of resources and fight against waste
- Equal conditions policies
- Proximity trade
- Support for vulnerable groups
- Business ethics
- Transparent communication with all social actors
These could be just some of the themes to which a company with a sustainable vocation pays attention. Because, as we have explained throughout this article, the sustainability of a brand does not exclusively concern economic or environmental aspects, but also its corporate governance and its impact on society.
To incorporate sustainability into their business model, many companies, especially when we talk about large companies, are taking the Sustainable Development Goals (SDG) as a guide, a total of 17 goals whose purpose is to build a better world by 2030, that is, a world without poverty, fair, that promotes a level playing field, where biodiversity is protected, there is education for all and we are winning the battle against climate change, among other aspects.
Sustainability for many businesses is becoming a “bedside book”, that cornerstone on which the entire business model is based
Sustainability trends in retail
We have already offered in this article an overview to explain changes in consumer habits and what is a sustainable company. Now it’s time to talk about the present and future, talk about sustainability trends in retail.
To reduce their energy consumption, their environmental impact, and therefore their carbon footprint, companies are changing the traditional production model in favor of a circular supply chain. This implies, for example, avoiding waste throughout the entire production chain or reusing packaging.
Sustainable production and consumption
In line with the previous trend, companies not only want the production chain to be more efficient and respectful with the environment, also products must be. For this reason, more and more brands incorporate ecological and sustainable products among their raw materials or work to change their packaging to make them more sustainable. For example, North Face has a clothing line made from damaged and restored items. In Spain, Estrella Damm, a Spanish brand of beers, is introducing biodegradable packaging, thanks to which the plastic rings that connect beer cans are being replaced by a fully biodegradable packaging system.
If society is more aware, responsible and supportive, brands should also be
Technology, a friend to everything
The digitization of companies is already a reality. Thanks to technology, companies can be more sustainable in their day-to-day life and, at the same time, they can have a closer relationship with the customer (through social media, for example) and offer them more exclusive and personalized attention.
This trend is found in any type of company, regardless of whether it belongs to the retail sector or not. We have talked about changes in consumer habits, but we cannot forget that jobs have also changed. Young people will no longer spend 15 years working for the same company, they seek new experiences, grow professionally and share values and principles with the company. A good salary is not enough, we also want an ethical company, concerned about equality of conditions or that facilitates the reconciliation of work and personal life.
In conclusion, we could say that sustainability in the retail sector is a change that has been caused by the change in consumer habits. If society is more aware, responsible and supportive, brands should also be. The road to sustainability is long and has only just begun.