We’re running a series of pieces exploring predictions for how multichannel and ecommerce retail might change over the coming year. Today we consider sustainability. This has moved into the spotlight over the past year as the fast rise of climate activism has put environmental issues firmly onto the retail agenda
The growth of sustainability
“Sustainability will be a growing concern for both retailers and consumers in 2020. For retailers, the aim will be both ethical and practical – as more sustainable operations will also be more efficient. For example, many stores have to leave lights on overnight for cleaning and maintenance staff. Connected sensors in stores can automatically turn off lighting in areas where it isn’t needed – reducing energy use without leaving staff in the dark – and activate alarms to ensure unauthorised personnel do not enter. Machine learning can automate and optimise supply chains to make them as efficient as possible – for instance by identifying routes that use more energy for no gain. And immersive technologies such as Augmented Reality can remove the need to create and transport sample goods, instead allowing buyers to examine them in a virtual showroom.
“Consumers are also demanding more proof that goods they buy are sustainable and ethically sourced. Retailers can use technology such as the blockchain to create a full, audited history of specific products, from where the raw materials are gathered to the final package on the shelf – including evidence that its supply chain is 100 percent sustainable and ethical. QR codes on packaging can then combine with mobile apps to give customers access to that history, and the proof they demand.”
Jose Manuel Benedetti, principal architect at Insight UK
Sustainability as a selling point
This year we have seen the growth of Extinction Rebellion, the rise of the extraordinary Greta Thunberg, and public opinion turn firmly against single-use plastics. Many brands have responded with ambitious sustainability pledges, while retailers such as Waitrose have launched packaging-free initiatives to great fanfare. Sustainability will be an equally hot focus for brands in 2020 – and given that 87% of shoppers say they would purchase a product because the selling company promoted a cause they cared about, who can blame them?
One organisation to watch is Terracycle, and its service Loop, a remarkable, first-of-its-kind circular economy scheme. Customers can purchase branded products online through the Loop Store or partner retailers, paying a deposit for reusable containers. Goods are shipped to consumers in a reusable tote bag, which they refill with the empty packaging after use. The totes are then collected by a courier, which returns the packaging so it can be refilled, and the cycle can begin again.
One important thing is that Loop doesn’t compromise on customer experience with its packaging choices, which brands are already finding highly appealing. And what Loop is doing is just the tip of the iceberg for new sustainability drives. Retailers’ back office and operational sustainability efforts are sure to become yet more comprehensive next year, and these efforts will be used in consumer-facing comms and marketing, too.
Ian Scott, retail innovation manager, Tag
Responding to consumer demand
“I don’t think retailers have any choice but to respond to this, because consumer opinion can make or break a brand. I personally believe retailers making climate change-alleviation a key part of their business strategy will win greater loyalty of consumers as long as the products or services aren’t compromised.”
Matt West, chief executive, Feefo
“Transparency will become more of watchword for retailers, as they use customer feedback to gauge where they are getting it right or wrong. The UK supermarket chain Iceland used feedback from thousands of customers to change to bagless deliveries. This matched the environmental sensitivities of a large proportion of the customer-base which were revealed through profiling of the company’s performance.”
Neil McIlroy, head of product innovations at Feefo
Sustainability in the supply chain
“One of the most obvious changes retailers can still make is to reduce the packaging used for their products, both to market and to customers. Although we’ve seen movement in this area with the introduction of single use plastic bags, really that’s just the tip of the iceberg. We can therefore certainly expect to see some strong transitions to environmentally friendly and decomposable products in next 12 months.
“Responsibility for the delivery of items in a sustainable manner also means shipping companies need to be more aware and take greater ownership for how they distribute consumer goods. There’s lots of work retailers specifically can do to ensure the amount of plastic they use is reduced per order, without this detrimentally impacting the condition of consumers’ purchases.
“However, in order to make real progress in this area, the onus isn’t solely on retailers, but rather the retail industry collectively during every stage of the process – right through from the factory floor to the hands of consumers. In 2020, I expect to see organisations across the supply chain really begin to embrace sustainability.”
Alex Rohloff, co-founder, Laybuy