Why having a sustainable strategy is important for physical retail
In our article titled Why virtue is the new cool we identified how consumer values are rapidly evolving. In this article we consider the importance in having a clear and achievable sustainable strategy, and why brands with a physical retail presence are uniquely placed to have significant impact. Today, there is a far greater demand from consumers for businesses and brands to support social causes and benefit society; and the expectation to be more sustainable is a fundamental component of this. Being sustainable is no longer a ‘nice to have’, it must now be the foundation that every business builds upon.
What is sustainability?
Sustainability can be a difficult concept to define. Whilst it is commonly considered a conversation around the protection of the world’s natural resources, the discipline of sustainability is far broader. It applies to three core areas: environmental, economic and social sustainability. All three of these pillars must be invested in if we are to achieve ‘peace and prosperity for people and the planet, now and into the future’.
Alongside sustainability there is the term ‘Sustainable Development’. This refers to the pathway that leads to the goal of sustainability. Defined by the Brundtland Commission in 1987 as the practice of ‘development that meets the needs of the present without compromising the ability of future generations to meet their own needs’.
A collective responsibility: governments, people and also brands
It is in ‘Sustainable Development’ that governments and individuals are all ramping up their commitment. Progressive movements such as the United Nations 2030 initiative for Sustainable Development, or the Paris Agreement on climate change, demand that governments and leaders are enforcing change. But policy is not enough on its own. Policy can only have impact if it is followed by action, and it is society that must take responsibility, make changes and take action.
On a small-scale level, ‘action’ may be the individual who chooses to shower for less time in the morning, or the household that commits to producing less waste or using less energy. But large-scale impact can be seen when brands take responsibility and ownership of their own sustainable development. We see fashion brands like Chanel attaching themselves to financial agreements with built in sustainability clauses. Many businesses, like Vodafone, are reviewing their supply chain assessment to build in a greater focus on sustainability, and manufacturers are setting ambitious goals in their approaches and material usage. LEGO is a great example, having committed to producing only sustainably made bricks by 2030.
We’re already seeing great progress, but for every brand doing great things, there are many that need to do more. No matter how big or small, whether it’s an individual or a large global brand, everyone has a role to play, and this of course includes brands with a physical retail channel.
The role of physical retail
Despite the disruption that 2020 has brought, the retail industry will continue to remain an integral part of global society. Furthermore, retail’s role in society is evolving. Retail now exists in multiple channels engaging with consumers in many different ways; retail is everywhere. So, like individuals, there is a responsibility for retail brands to act.
Consumers are looking to brands more than ever to educate and deliver cultural influence. During the Covid-19 crisis 57% consumers have adjusted their lifestyles to reduce their environmental impact. So, as we as individuals make changes, we expect the brands that we associate ourselves with, to change as well. In the near future, the majority of consumers will only choose brands that demonstrate sustainable action.
Through their stores, physical retailers are in a powerful position to deliver sustainable development. They not only have the opportunity to address their own impact, but are uniquely placed to have significant social impact on the general public as well. Through the face-to-face in-store experiences, brands have the ability to raise the awareness of a cause, educate people of the issues and inspire individuals to take action.
Unfortunately, too many physical retail brands are missing this opportunity. There are retail brands whose sustainability policies are either not established enough, or not established at all. Then there are those that are making great progress in sustainable development (environmental, economic and social), but are not leveraging their physical stores to encourage social change. There are some brands that are using physical stores to talk about their sustainable policies, but are failing to communicate what ‘action’ they are taking. This risks coming across as sustainable signalling or greenwashing. No matter how well intended, policy is not enough on its own. If the retail industry is to accept its place in society, it must take on the responsibility that comes with that.
To fully seize the opportunities available to them, physical retail brands need to go beyond simply telling sustainable stories. In some cases sustainable storytelling can be good to raise awareness, but it is when brands use the physical store to involve both staff and customers in dynamic and engaging activities, that people begin to learn and become inspired to change their own habits. Brands must engage everyone in-store with meaningful sustainable ‘action’; action that the brand has taken and also action that helps their staff and customers reduce their own impact. Enabling people to get involved in this way, motivating them to take sustainable action for themselves, demonstrates social impact. It also creates a different type of connection between customer and brand. No longer is the relationship transactional, but a partnership built upon shared goals and achievements. This is what builds greater brand affection and loyalty amongst consumers.
The potential reach of retail is extraordinary. Reflecting back on 2020, despite the national lockdowns and the associated clouds of uncertainty, people are craving human connectivity more than ever and physical retail is one of the easiest ways to access this. Using the store as a tool to raise awareness, to educate and to inspire, retailers and brands have the ability to activate a movement throughout society. This is the power of the physical retail space. And it is the responsibility of every brand to leverage their reach to have a positive impact on society.
How are retailers delivering sustainable development?
Whilst it is true that sustainable development of physical retail predominantly focuses on environmental impact, too many retailers believe that their sustainability story is solely about the store environment and the materials they use. Whilst material choice is important, brands and retailers must look at sustainability through a far wider lens. When they fully understand the far-reaching scope of sustainable development, the opportunity to take relevant and meaningful action becomes much broader and therefore, in some way, a little easier.
To help understand some of the many questions a brand must answer, below are five areas of consideration that demonstrate the breadth of sustainable development strategies in physical retail.
01. Store environment
Architectural finishes, store fixture design and materials should all be considered in a brand’s push to become more sustainable. The challenge is to translate this into a meaningful and authentic in-store story. A story that feels relevant to the brand and is able to involve the customer in such a way that it encourages change.
02. Property selection
Retailers must understand how far both their customers and employees need to travel to get to their stores and how easy this is for them. Is the store close to public transport links, or do they need to use private transport? The building typology also makes a difference. Does it already exist or is it a new build? Is it in a mall, strip mall or high-street? Do the landlords have a sustainable agenda? Once all this is understood, retailers must define a plan to alleviate the associated impact.
03. Store operations and facilities
If a brand is able to address big ticket items such as supply chain, energy consumption, climate control, water usage (…the list goes on) the impact can be huge. But the smaller adjustments are also important. Even if it’s simply understanding how to reduce waste in-store.
04. Products and services
Brands can use their product assortment and in-store services as vehicles to demonstrate sustainable action. Are the products themselves sustainable? How are they packaged?
In-store services, like repairs and refurbishments, have the ability to
encourage people to change habits and live more sustainable lives.
05. Brand initiatives
Retail teams need to ‘mine’ their own businesses for opportunities. Often the bigger organisations are already doing great things, but miss the opportunity to leverage the retail channel to tell these sustainability stories and inspire customers.
Focus on the small and the big things
Wherever possible retailers need to take company-wide, holistic action, introducing both small and big changes, and these must go beyond a review of materials.
This holistic approach is a challenge and can appear overwhelming. It demands investment of time and money, and it requires the alignment of multiple stakeholders. Most importantly, it demands that an achievable sustainable strategy is set in place. The goal of sustainability will not be achieved with just a single big intervention. Focus must be on sustainable development. Progress comes from the development of multiple initiatives, some big and some small. Pre-defined check-in points along a brand’s journey enables them to monitor their development, identifying what they are doing well and where they need to improve. It is a big undertaking, but despite these challenges, retailers are already proving that it is possible.
Establishing a sustainable strategy needs to be a core focus of every retail business now. These strategies cannot simply be sustainable announcements, they must be authentic and lead to meaningful action. Physical retail stores must be leveraged to raise awareness, educate and inspire customers and staff to make changes and adjust their own habits.
Having a sustainable strategy is important to retailers not just because they have a responsibility to manage their own environmental and economic impact, but they are uniquely positioned to have a social impact and encourage global change.
For a more in-depth view into some tactical sustainable solutions that brands around the world are integrating into their physical stores, take a look at our insight article 10 tactical ways physical retailers can deliver sustainable development
Need help in identifying sustainability opportunities across your retail estate, for the short, medium and long term?
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