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PREDICTIONS How the sustainability agenda looks set to develop for retailers and brands

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Each year, InternetRetailing looks ahead to the coming year in a series of predictions. Today’s predictions explore what a range of industry members are thinking about sustainability and how that will develop in 2023

The importance of reflecting customer values will grow

Olivier Buffon, head of international at Faire, says: “2023 will see shoppers increasingly stress the importance of value alignment, marrying their purchasing decisions with wider social and political outlooks. Through this framework consumers will judge which brands to purchase products or services from – asking do they share my values or not? One of the biggest value trends we’re seeing is sustainability—in a survey conducted by the Institute for Business Value in early 2022, 49% of consumers said they’ve paid a premium for sustainable or socially responsible brands. 

“This not only applies to in person shopping experiences, where it’s easier to highlight sustainability credentials, but ecommerce too. We are likely to see perceptions of digital consumers influenced by brands that are and aren’t providing easy access to information online regarding their sustainability initiatives, giving customers the reassurance that their shopping aligns with their principles.

“This continued shift toward sustainable, values-based brands has been apparent over the last year on Faire. In 2022, Eco-Friendly and Small Batch were two of the top five categories Faire retailers shopped for, purchasing 1.5 million eco-friendly products and almost 2m small-batch products. In the year to come, we expect this behaviour will continue to prevail.”

Moving up the agenda

Jack Richards, brand and consumer intelligence expert at Talkwalker says “In 2023, sustainability, ESG and CSR topics will come to the fore even more than we have already seen. They’ll no longer be an added bonus or an afterthought, but instead come to the front of consumers’ minds in a way that makes sustainability strategy an absolute necessity for brands and other organisations.

“Consumers will want businesses and their brands to take action with 82% wanting companies to put people and the planet before profit. It’s clear – consumers don’t want to hear buzzwords like sustainability, green, or net zero. We’re in an era of demanding authenticity from brands, where their actions meet their words in an authentic way, and a genuine difference is made.

“The coming year will see disruptor brands focused on sustainability take a larger share of the market. And, we’ll see savvier consumers interrogate environmental claims, leading to more backlash against potentially inauthentic approaches or, worse, greenwashing.’

Legislation set to increase 

Namrata Sandhu, CEO and co-founder of Vaayu, says: “In 2023, we’re going to see regulators in the UK and internationally continue to introduce legislation on the sustainability claims of businesses, particularly across the retail sector. As carbon emissions continue to rise, there is an urgent need for businesses to truly understand their carbon impact so meaningful reduction measures can be made.

“In order for these measures to be implemented quickly and at scale, retailers and businesses need more granular real-time insights into the carbon emissions across their entire supply chain or operations. This driver is powering the growth of the carbon calculations market, as demand increases for better sustainability data and analytics – its value is set to surpass $13.7bn by 2028 (exhibiting a CAGR of 6.1% during the forecast period 2022-2028). In the case of the UK, a recent report, published during Cop 27, has highlighted the scale of the growth potential, suggesting that £175bn in revenue is up for grabs by 2030, with 40,000 new small companies likely to be formed, alongside 260,000 new jobs, as we strive to narrow the gap between sustainability rhetoric and sustainable action.

“As the dust settles on further pledges being made at Cop 27, it’s clear that investment in sustainability goals will not waver in 2023, even as retailers face operational pressures, such as  soaring costs, global supply chain issues, inflation and a developing recession. The climate crisis isn’t going away; those who prioritise and invest in their sustainability efforts now, will benefit in the long-run, reputationally and financially heading into next year.”

Circularity comes to the fore

Tony Mannix, chief executive of Clipper Logistics, says: “The growth in pre-loved inventory being directly marketed by retailers and brands is here to stay. More and more brands, especially premium and luxury ones, are increasingly offering customers repair services and other ways to prolong the product lifecycle. Such programmes enhance brand loyalty while minimising the use of raw materials, the associated energy and water consumption, and reduce waste and landfill. 

“Third party players need to be able to support brands and retailers with their ESG strategies and goals. ethical and sustainable supply chains are an imperative for all. The monitoring and auditing of supply chains will be a necessity as retails and brands seek to validate their credentials and avoid the negative impacts of getting it wrong. Segura – the software-as-a-service solution for supply chain visualisation – is an example of what retailers and brands can use to enhance the transparency of their supply chains.”

Sustainable beauty 

Kristof Neirynck, global chief marketing officer at Avon, says: “Beauty brands cannot ignoreenvironmental and societal concerns, with the industry primed to start making significant inroads in providing a more sustainable offering that also has a positive impact on society as a whole. Only brands that successfully combine commerce with purpose will survive on the long term.”

Avoiding over-consumption

Sarah McVittie, co-founder of Dressipi, says: “A huge win for sustainability will be getting retailers to understand the link between supply and demand and stop a lot of the over-consumption at the source. There is so much wastage in the fashion industry that can be eliminated through better predictive retailing models within each retailer. We can expect to see more of this over the next 12 months from the forward-thinking retailers.

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