The greening of retail

  • The greening of retail: why sustainability is the new frontline, and how tech innovation can help

    February 2020

    Spurred on by movements such as Extinction Rebellion, School Strikes for Climate, veganism, the plastic backlash and biodiversity conservation, consumers have found a compelling new reason to buy. Retailers who fail to adapt to consumers’ rapidly changing priorities risk alienating their customers, especially those from younger demographics, eroding brand equity and profit margins at a time when trading conditions are difficult enough.

    Luckily for retailers there are lots of ways to respond to the growing tide of consumer environmentalism, harnessing technology to ensure the greening of retail boosts profitability as well as sustainability.

    Programmes such as Sir David Attenborough’s Blue Planet II have contributed to rising consumer awareness surrounding the single-use plastics problem. This groundswell has transformed into a consumer outcry for companies to reduce, recycle and replace single-use plastic wherever they can within their operations.

    Supermarkets’ plastic and carbon footprints

    When it comes to supermarkets, Waitrose is leading the field having committed to a total elimination of single-use plastic within the next decade. Since June 2020, customers at its Botley Road store in Oxford, for example, have been filling their own containers with pasta from large jars, beer on tap and pick 'n' mix frozen fruit, doing away with packaging altogether.

    This approach has proved to be such a hit (more than 90% of its customers want it to continue) that Waitrose is rolling out the scheme in Cheltenham, Abingdon and Wallingford with other branches to follow.

    Other steps Waitrose has taken include removing non-recyclable black plastic from its own-brand ranges, allowing customers to bring their own containers to the meat, fish and cheese counters and replacing single-use fruit and veg bags for compostable alternatives.

    Sainsbury’s may currently lag behind Waitrose, but the supermarket also has ambitious plans to slash its carbon emissions as well as single-use plastic. It has pledged to spend £1bn to become a carbon-neutral business by 2040, ten years ahead of the government’s target for a net-zero economy.

    Sainsbury’s ambitious targets

    The supermarket chain said the 20-year programme would include cutting its carbon emissions, food waste, plastic packaging and water usage, while increasing recycling, promoting healthy and sustainable eating, and ensuring that its operations are net positive for biodiversity.

    Measures planned by the retailer include making its fridges more efficient, increasing the use of alternative and low-carbon fuels among its vehicles, as well as halving its use of plastic packaging by 2025. The retailer is piloting a deposit return scheme in five stores where customers receive a 5p coupon for every plastic bottle they recycle.

    Sainsbury’s chief executive, Mike Coupe, is on the record saying the company is making the investment in order to “transform the way we do business and put environmental impact at the forefront of every decision we make”. Sainsburys has already reduced its carbon emissions by 35% over the past 15 years, despite the footprint of its business increasing by over 40%.

    Reducing fashion’s impact

    It’s sobering to learn that the fashion industry is responsible for 10% of the world’s carbon emissions – that’s more than the airline and shipping industries combined. However, fashion brands are using innovative solutions to rise to this challenge.

    Adidas, for example is promising to end plastic waste in its products within the next decade. This will involve using lower-carbon, recycled materials and designing fully recyclable products in the short term. Longer term, the company’s goal is to switch to biodegradable materials. This is an ambitious goal when you consider that the German sports clothing and equipment firm produces 900 million items annually.

    Meanwhile Scandinavian fashion giant H&M is set to be the first retailer to sell garments made from Circulose, a sustainable fabric made from up-cycled clothing and fashion waste. Clothes sold by H&M will be made of a Circulose/Viscose blend that uses 50% Circulose, sourced from up cycled cotton jeans fabric and 50% viscose sourced from FSC-certified wood. The fast-fashion retailer says its Circulose clothes will be in stores from spring 2020 and that it plans to use only recycled or sustainably sourced materials by 2030.

    Prada is another brand that is exploring ways to ensure fashion can be more sustainable. Products in its Re-Nylon collection are produced from synthetic nylon fabrics from ocean plastic, fishing nets and textile fibre waste. The fashion house has pledged to use only reclaimed nylon in products by 2021.

    Fashion and the circular economy in a digital age

    The UK second-hand clothes market is set to become more popular than fast fashion, with its value doubling in size within five years, according to a recent report from ThredUp. And new data published by Mintel backs this up, showing in the last year alone more than half of UK 25-to-34-year-olds have bought second-hand clothes. This growing environmentally friendly trend hasn’t gone unnoticed by start-up entrepreneurs who have launched a flurry of second-hand fashion apps online. Resale apps such as Poshmark, Depop, and StockX are among those leading the way online, enabling users to shop and sell directly from their smartphones.

    Depop is a great example of the phenomenon. Some 90% of its users are under the age of 26, and since launching in 2011 it has grown to have more than 13 million customers in 147 countries. The app recently raised US$62 million to expand its presence in the US, where it currently has five million users. Teens and 20-somethings are using Depop to sell anything from used clothing and sneakers to concert tickets, utilising the platform to start their own brands.

    Poshmark, which boasts you can list clothes in 60 seconds, has also grown at a rapid pace, amassing over five million sellers since launching in 2011. Last May, it announced that it had paid out US$1 billion to its community of sellers, some of whom reported pulling in as much as US$1 million in sales on the app.

    The challenge of green delivery

    With the rise of omnichannel commerce environmentally friendly delivery fulfilment has become another challenge for retailers and brands. This was clear from a recent RetailEXPO report which revealed that 40% of consumers want retailers to reduce packaging waste associated with deliveries.

    As with most of the ecommerce sector, Amazon is leading the way with its Amazon Day initiative, which aims to drive change, minimising environmental impact. Through the programme, Prime members can opt to have all their orders delivered together on a certain day of the week. Wherever possible, Amazon will deliver all items together in one package, though this is not always possible due to the nature of Amazon’s fulfilment spaces and the availability of items.

    The ‘Amazon Day’ programme forms part of Amazon’s wider Shipment Zero initiative, which aims to make all Amazon shipping net zero carbon, with 50% of all shipments made net zero by 2030 – this will involve the introduction of a fleet of electric vehicles as well as large investment in reforestation projects and renewable energy. If Amazon can make this work, it would have a phenomenal impact on the ecommerce industry.

    Conclusion

    According to the RetailEXPO Trends report, 45% of consumers have a greater affinity with brands and retailers who are running sustainability initiatives. However, 51% felt such efforts were merely retailers ‘paying lip-service’ or greenwashing. This shows that brands and retailers need to set bold targets for themselves and then be transparent about their achievements. The rewards for brands and retailers who follow through on their promises are great, with more than half of consumers saying they would shop more with retailers who reduce plastic and packaging use and source their products more ethically.