Opinion | Tuesday, 23rd February 2021

Consumers want sustainability - how can retailers meet the demand?

Ethical practices are a key factor for the modern consumer, says Dr Amna Khan

By Dr Amna Khan, Senior Lecturer in Retail and Consumer Behaviour at Manchester Metropolitan University.

From product design and supply chains to consumption cycles, sustainability is now at the forefront of consumers’ minds when it comes to retail.

Consumer interest in sustainability was gaining momentum prior to the lockdown restrictions imposed as a result of the COVID-19 pandemic. The disruption caused by the pandemic has only strengthened these interests and the desire to protect the planet through sustainable consumption.

The heightened interest in sustainability issues results in more accountability for everyday purchasing habits. Consumers now question how and where the products they purchase are sourced. According to Accenture, a global services and consulting firm, ‘49% of UK consumers said they were planning to make more environmentally friendly, sustainable or ethical purchases over Christmas’. 

This consumer desire, coupled with the British Retail Consortium’s recent announcement on its climate action roadmap, is no doubt going to lead to retailers having to up their game.

Retailers will need to consider sustainable initiatives in all parts of their offerings, from the supply chain to the product and services.

Retailers have a unique role in the drive for sustainability. As the Norwegian academic Bjarne E. Ytterhus has explained, they act like a gatekeeper between producers and consumers, which gives them purchasing power over suppliers, producers and supply chains, as well as playing the part of key motivators and influencers when it comes to consumer purchasing behaviour.

Ultimately, this position gives retailers an unrivalled opportunity to make tangible differences to sustainability initiatives.

Retailers as influencers

Retailers have two significant forms of influence over the producers of goods: purchasing power and direct access to consumers.

Producers are often competing for shelf space to ensure their goods are placed in prime picking position. Retailers can use this as bargaining power to improve product sustainability by requiring producers to embed more sustainable practices in product specifications, packaging and transportation.

According to Retail Weekly, in grocery retailing ‘plastic packaging remains a problem for many retailers’ . In this instance, retailers could use their overwhelming purchasing power to select suppliers who offer more sustainable products with less plastic packaging.

This would, by default, encourage and in some cases compel producers to consider sustainability in the product design stages, encompassing product and packaging sustainability issues from the outset.

If retailers set a high benchmark for sustainability issues, as they do with other supplier performance metrics, the move to embed and achieve sustainability goals is not only achievable but will gain great traction.

Multinational retailer Marks and Spencer has recently unveiled its own sustainability standards for denim, a staple item in consumer wardrobes. They have collaborated with a sustainable denim organisation, Jeanologia, to reduce the amount of water used in wash processes by 86% compared to the industry average as well as switching indigo dyes to sustainable alternatives.

As we look to the future, governments will seek to achieve their own sustainability targets. Those organisations that have innovated and incorporated sustainable practices within their business models should be well placed to benefit from potential government-led sustainability incentives.

One possible incentive to reward this sustainable behaviour could be to remove VAT on resold stock and upcycled items. This will help to future-proof businesses as customers, industry bodies and governments demand more sustainable practices.

Consumption practices

Retailers can focus on motivating and enhancing consumers’ sustainability practices by developing, offering and promoting sustainable products, services and disposal processes.  

One way to enhance sustainability is through waste reduction. Through their garment collecting initiative, high street retailer H&M ‘collected 29,005 tonnes of textiles for reuse and recycling— equivalent to about 145 million T-shirts’. These garments are sorted into three categories (re-wear, re-use or recycling), which ultimately reduces textile waste that would otherwise end up in landfill.

By offering a more sustainable process and providing a financial incentive, through a £5 H&M voucher in exchange for a bag of clothing, consumers are motivated to engage with the sustainable practices and consider waste reduction strategies, thus making sustainability a more desirable option.

Furniture retailer IKEA is also encouraging consumers to repair, upcycle and donate their furniture items, increasing usage and the lifecycle of products. IKEA accepts their used furniture in exchange for an agreed value for their items to be resold in their bargain section.

Not only does this encourage consumers to recycle, but it also encourages them to purchase with IKEA, thus increasing brand desirability.

Retailers need to look at the afterlife of a product and encourage a number of life cycles, which should be considered at product design stages. The implementation of sustainable processes can result in shifts in consumers’ thinking, where people will actively seek purchases that that reward sustainable behaviour.

A golden opportunity

The COVID-19 pandemic has strengthened the desire for sustainability as consumers seek to integrate sustainable consumption into their identity. Retailers have been handed a golden opportunity to deliver creative and unique solutions that match consumers’ heightened sustainable identity.

The shift to online shopping seen during the pandemic is one change that will support this as research has shown how less CO2 emissions are transmitted from online consumption in comparison to bricks and mortars.

Beyond the pandemic, retailers may want to focus more on promoting online shopping or suggest to consumers that they combine shopping trips and avoid travelling for single item purchases.

In a post-COVID world, retailers that embody sustainability and encourage sustainable consumption and disposal are likely to be clear winners. Consumer behaviour may show a preference for the responsible retailer who works with supply chain partners, consumers and government bodies to create and deliver sustainable solutions.