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Despite increasingly conscious consumers, established retailers are struggling to transition to more sustainable practices. Melissa Wade of BJSS sets out five lessons brands can learn from more agile and eco-friendly startups
Sustainability continues to dominate retail headlines. Popular documentaries such as The War on Plastic, Our Planet, and Fashion’s Dirty Secrets have shed a harsh but necessary light on the industry and in turn spurred the rise of the conscious consumer.
Today’s consumer has become more mindful in what they buy as they seek to combat some of the negative effects that consumerism is having on the world.
Recent research revealed that 68% prefer conscious brands, regardless of their age or gender. 28% said sustainable ethical practices will make them brand loyal, and one third said they are willing to pay up to 25% more than the original price for a sustainable product.
Retailers who aren’t forward thinking risk falling behind their competitors
With this explicit demand coming from consumers, there is no doubt that sustainability is set to become a long-term movement. Retailers who aren’t forward thinking risk falling behind their competitors. But for those that do there is a big opportunity to better connect with consumers on topics important to them.
Right now, we’re seeing startup brands like Henri and The Keep Boutique surging ahead with the introduction of eco-friendly efforts. For established retailers, however, making the transition to more sustainable practices is presenting several hurdles. But why? If it’s a visibly growing consumer trend, why aren’t bigger retailers being active about it?
Startups are more easily able to push boundaries and surge ahead with eco-friendly products. (Credit: BJSS)
We set out to answer that question. Our report – You, Me and Sustainability – unearths the five big sustainability challenges retailers face, the startups that are really pushing the boundaries and what some of the more established stores can learn from them.
What we found to be one of the biggest hurdles established retailers face is the costly nature of making changes to an already fully functioning value chain. They’re unclear on the return on investment (despite research and trends clearly providing this), and so from their perspective have a lot more to lose, regarding their profit and loss and a bottom-line impact, than they currently believe to gain.
Startups however can build up their businesses from scratch in the right way and give themselves the opportunity to gain more market share (more than the current 2% they hold in that space at the minute). If developing technology, they are small and agile enough to develop something exciting and then enter into fruitful partnerships with established retailers. The startups are the ones really pushing the boundaries when it comes to sustainable innovation, proving the demand and paving the way for the established retailers to follow.
Consumers want to develop an emotional bond with their purchases and brands they are buying from
So, what are our five key lessons the big brands can learn from the smaller players?
1. Clear branding – Consumers are getting purchase fatigue. They want to develop an emotional bond with their purchases and brands they are buying from. Retailers that embrace sustainability within their brand have the perfect way of creating this. The startups have created strong narratives that really resonate with consumers, catching them in the moment when they’re feeling passionate, ultimately helping them to establish a long-term relationship. Whereas the big brands (who already have an established brand story) have a gap to close here.
2. Customer education – Brands have a responsibility to educate consumers about the sustainability of their products. Startups employ sales assistants that are passionate and knowledgeable about sustainability and the company’s values, enabling an open and honest conversation with customers. The big players are missing a trick here. They need to shout about how they work with suppliers, or that their products are designed to be produced with durable and reusable materials.
3. Creating a community – Some startups are successfully creating a community amongst like-minded retailers with the same ethos. Whilst retail is now facing a time of intense competition, sustainability offers a unique opportunity for brands to come together. Simple things like providing fellow store recommendations. This power of community is something the established retailers can look to replicate in their own way – perhaps through collaborations with smaller players.
4. Product transparency – Startups are building honest, transparent relationships with those often forming their supply chain, like Henri has with its personal relationship with the organic cotton pickers. Henri can then easily explain why this must be pushed into the clothing price point. However, for the established retailers this is an expensive headache to replicate, one they can start fixing by looking at how to make their best-selling staple items more sustainable in a safe way.
5. In-store experience – There is a big difference between the in-store experience offered by big retailers versus the startups. Sustainable startups focus on simple, clean and clear store design using raw materials that speaks to its brand values. Executed well, they are creating an opportunity for customers to really engage and interact with products to learn where they’ve come from, offering Instagrammable moments in-store. The big players should reduce any tech for tech’s sake and start to play into this personable experience economy in the same way that the startups have.
While some established retailers, like Lush and Monki, have clear eco-friendly credentials, it’s evident that others have a few things to learn when it comes to adopting a sustainable outlook. More needs to be done across retail to create a circular economy and close the loop, as they are the link between suppliers and consumer. They have the power to demand ethically and sustainably sourced materials from suppliers, whilst enabling consumers to navigate conscious consumption. If retailers don’t care about the environment, consumers won’t care about the retailers – it’s simple.
Melissa Wade is retail consultant at business consultancy BJSS, and author of the report You, Me and Sustainability