Retail Recovery Will be Green as Consumers Demand More Sustainable Stores
Retail is picking up again, slowly but surely. This is a look at how retailers need to adapt to consumers’ demand for a more sustainable shopping experience.
Footfall is still down on pre-pandemic levels, by 20% in February, but it is a marked improvement, showing the high street and shopping centers are starting to attract the public after nearly two years of intermittent restrictions.
However, for stores that expect things to go back to some kind of ‘normal’, there is a big surprise – previous loyalty can no longer be relied on.
During the pandemic McKinsey research shows that 60% of consumers around the world shifted to new brands and retailers to ensure they could get what they needed at a price that was right. This figure rises to 71% in the UK, (59% in France) underlining that although it might sound like a cliché, retailers really do have to adapt to a new normal.
This not only means a strong online offering that blends with physical stores – so called ‘phygital’ – so consumers have consistent omnichannel experiences. The new reality of retail is that consumers are more fickle than before and the pandemic has heightened their awareness of rewarding brands who share their sense of purpose.
Combine these two trends of purpose and brand switching and you have consumers who are willing to try new retailers and brands, particularly those who share their view that companies should do all they can to minimise their impact on the environment.
According to a Mood Media survey, 67% of consumers worldwide reveal it is important the brands they shop for are committed to being environmentally friendly. Very nearly the same proportion, 66%, agree the shops where they buy those brands need to be environmentally friendly.
Consumers aged between 35 and 44 feel especially strongly about brands and shops sharing their sustainability values. Interestingly, a 2020 survey by IBM found that not only were 6 in 10 shoppers willing to change their shopping habits to reduce their environmental impact, 70% of those wanting to make the change would pay a 35% price premium.
Clearly, shoppers want to do their bit for the environment and they will reward brands and retailers who align with their values.
Making the Right Moves
Packing is a huge area where retailers can make a lot of impact. According to research from Deloitte, nearly two in three shoppers, 64%, want companies to take a lead in reducing packaging. This is certainly what Tesco is doing through a trial in which shoppers can choose to do away with excess wrapping and containers.
In ten stores in England shoppers can opt for reusable packaging which can be returned on a future visit so it can be cleaned and used by another shopper. Customers pay an extra 20p to opt for a reusable container with the fee being reimbursed once it is returned.
So far 88 products have been part of the trial, including washing powder, dry condiments and cosmetics. In just these ten stores along, the retailer estimates its new packaging option could be used two and a half million times.
Another project retailers might seek inspiration from is at Primark. It is seeking to reconcile low cost clothing with impressive sustainability by moving towards synthetic fibers. A quarter of its garments are currently made from recycled synthetic fibers with an ambition to reach 100% by 2030. To further empathise its environmental credentials, the store no longer uses plastic hangers.
Embracing purpose has also prompted the retailer to commit to a promise that by 2030 all workers throughout its supply chain will earn a living wage with access to additional benefits, such as social security and employment protection.
This combination of being both environmentally aware and focusing on employee care is a huge area for consumers. Although price and value drove shoppers to change brands during the pandemic, McKinsey research shows that a fifth (a quarter in France) of UK shoppers switched behaviour to reward brands who looked after their employees well during the pandemic.
Accessing the Right Partners
No company can do this on their own, different partners will specialise in improving environmental performance in different areas. It means working with advisors who have a network of professionals they can rely on is hugely important.
Some consultancies like Design Conformity are doing just that, advising on how retailers could reduce their carbon footprint reduction by working on environmentally friendly retail designs.
A store’s fixture can account for 20% of its interior carbon footprint and for stores that use electricity, perhaps for digital displays and lighting, that can rise to 70%. The good news is that recent digital signage, music and messaging in-store systems are now able to consume less than 10 watts of power. They are also designed to have a long service life, thanks to partnerships with selected manufacturers.
This ensures components last longer, reducing the environmental impact of having to replace equipment. When kit does need to be replaced, partnering with industrial assets management companies to ensure kits can be recycled, further reduces the installation environmental impact.
Stores can start making a difference right now by looking at these areas of energy consumption and recycling equipment, as well as investigating how to stock more environmentally-friendly products.
Then, by selling items with minimal packaging, with a recycling option, retailers can build on the excellent customer service they strive to achieve by showing consumers how their desire to be kind to the planet is shared by a retailer that is going the extra mile to reduce their environmental impact.
For retail to recover, stores simply cannot ignore this heartfelt desire among consumers to reward the companies that are going beyond soothing words on sustainability and taking effective action in their outlets.