Brands in Europe Are Making Sustainability Standard Practice
As environmental consciousness and social responsibility gain a greater share of public awareness, sustainability is becoming a desirable option for retailers in all segments. Though there's no "one size fits all" approach that can suit all organizations, there are several routes that a brand can take, and there are compelling reasons for retailers to adopt sustainability best practices of one kind or another.
Consumers Are Demanding Sustainability
With catastrophic earthquakes and devastating brush fires making the news in the same season that climate activist Greta Thunberg was named as Time Magazine's person of the year, more people than ever are now aware of environmental and social issues. These same people expect the brands they interact with to share their concerns. As recently as 2018, a study by Nielsen and The Conference Board found that 81% of global respondents feel strongly that companies should help improve the environment.
As Millennials and Generation Z increase their spending power, a massive population of young, environmentally conscious people are emerging as potential consumers. In Western Europe, it's reckoned that 14.3% of the population are "eco-conscious" consumers, and this awareness spans buyers of all ages and incomes. Both consumers and governments are putting pressure on businesses to operate in a more sustainable manner.
Sustainable Practices Make Good Business Sense
In truth, this pressure is something that organizations should welcome. As well as creating a cleaner and safer environment, embracing sustainability can help unlock new markets and prospects for businesses, generate cost savings, and create highly skilled jobs in dynamic new industries.
For example, in addition to providing benefits to retailers who adopt innovative and sustainable techniques or technologies, the UK government estimates that green growth initiatives could create up to two-million "green-collar" jobs, employing new skills for a low-carbon economy. This job growth could lead to exports totaling PS170 billion (around $200 billion) a year by 2030.
Astute brands are buying into this new area of opportunity and looking to build sustainability into their business models for the future.
Looking Beyond Recycling
For many organizations, sustainability has up to now been treated as synonymous with recycling. This year, for example, Colgate-Palmolive will unveil a recyclable toothpaste container under its Tom's of Maine brand, with plans to convert all of its products to 100% recyclable packaging by 2025.
However, by that time, some analysts predict that the focus of corporate sustainability will have shifted, particularly with the ongoing collapse of the global recycling market in response to pressures from trade disputes and the exchange rate between the US and China.
Future sustainability practices will have to look beyond the simple use of recyclable materials, to the creation of more holistic and circular business strategies.
Legal and Tactical Frameworks Are Giving Guidelines to Brands
In December 2015, the European Commission approved the Circular Economy Action Plan, outlining circular paths for production and setting Europe on a path "toward a climate-neutral, circular economy where pressure on natural and freshwater resources as well as ecosystems is minimized."
The European Strategy for Plastics was approved in January 2018, aiming for all plastic packaging in the European Union to become recyclable or reusable by 2030. And the EU Platform on Food Losses and Food Waste (active since 2016) looks to halve the amount of food waste per person in the retail and consumer sectors by 2030 while minimizing waste throughout the supply chain.
Initiatives like these provide a legal framework for sustainability. For practical purposes, analysts have developed sustainability strategies based on a number of key elements, which include receiving, recycling, repair, refilling, renting and reselling.
Sustainable Initiatives Through Various Channels
As part of its receiving strategy, UK grocer Sainsbury's is planning to accept milk and glass soda bottles back from consumers, in an attempt at halving the amount of plastic packaging it uses over the next six years.
Receiving goods and packaging in-store assumes that shoppers will actually bring the items with them the next time they visit. In order to jog their memories, some brands are offering incentives. For example, Adidas in the UK has a new system called Infinite Play which lets consumers return any branded products they bought within the past five years, in exchange for a gift card and loyalty points.
Swedish "fast fashion" house H&M is committed to becoming 100% circular by 2030. The brand hosts a recycling scheme where they up clothing and shoes in over 60 countries and sell some of the materials back to the companies that originally made the clothes.
At a newly refurbished store in Stockholm, H&M is also offering its first clothing rental service, enabling the short-term loan of items which can then be reused by different consumers.
In the UK, luxury store Harvey Nichols now offers an after-care repair service called The Restory that can repair and restore premium items, or "reimagine" them as new products in a different form.
On the resale front, UK department store Selfridges has been working in association with third parties to create "shops in shops" for reselling apparel brought in by consumers. This kind of activity isn't just about sustainability. A research report from thredUP suggests that the total secondhand apparel market will reach $51 billion in the next five years and will be larger than Fast Fashion within ten years.
The UK grocer Waitrose has been assessing customer reactions to its new Unpacked system, which encourages shoppers to bring reusable shopping bags and their own containers for filling up with the products they buy. Reusable bags and containers are also available for purchase in-store.
Mobile Is Giving Brands New Opportunities for Sustainability
A truly holistic strategy for sustainability needs to take in all channels and touchpoints. In this regard, a number of brands have been using mobile to complement their in-store and supply chain efforts.
Retailers have been working in partnership with tech companies to harness the power of mobile apps to minimize food waste. For example, Too Good To Go, an app that launched in London in 2016, sells surplus food from restaurants and retailers at a discount. The app is currently available in nine countries, with 21,000 partners, and 8.3 million downloads.
With customers driving a push for true sustainability, retailers must now think circular, and embed sustainability into their business models in ways that avoid waste, find new purposes for materials, and satisfy the consumer.
Sustainability, best practices, and the changing nature of consumer demand are all set to be hot topics at eTail Europe 2020, which takes place from 23 - 24 June 2020, at the Queen Elizabeth II Conference Centre, London.
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