Today’s discerning customer is not only seeking bang for their buck, but they also want to know the brands they purchase have impeccable green credentials matched with a strong social conscience.
AIB’s head of retail sector Alan Makim acknowledges that sustainability is becoming an increasing consideration for both the retailer and the consumer although it is not yet the primary factor governing a purchase.
“Consumer motivations will differ, but those that are sustainability conscious will often use the sustainability credentials of a retailer or product producer as a decisive factor when choosing between two otherwise similar items.” He does, however, expect an acceleration in the demand for sustainable products. “To get real traction in sustainability, it can’t be a choice between affordability and sustainability, and the retail supply chain needs to be innovative in delivering sustainable solutions.”
Retailers also need to have accurate facts and figures to hand when it comes to the environmental impact of their products, as this is what consumers will begin to demand, he adds. “The range of information sought can vary from litres of water used to manufacture products, to the work standards of the people who helped make it.”
Keith Watt, head of retail at KPMG, agrees that price is still the key determinant when it comes to making a purchase, especially as the cost of living crisis begins to bite. KPMG’s most recent retail survey showed that only about a third of consumers said a retailer’s support of good causes or sale of sustainably sourced or produced products made them more likely to consider purchasing from them. “This was much more significantly pronounced in younger customers, with half of 18- to 24-year-olds likely to look for sustainable goods and retailers supporting good causes,” Watt notes.
Interestingly, more than half of consumers (53 per cent) surveyed by KPMG rejected the notion of introducing additional charges for excess packaging from goods purchased online. “So although everyone agrees sustainability is the way forward, not everyone is currently willing to pay more for it. But it’s also important to note that, while price increases resulting from inflation are generally causing customers to reassess the importance of socially conscious shopping, younger customers still care very much about this,” says Watt. “The challenge will be for retailers to either convince customers it’s worth paying for or doing it in a way that does not significantly increase prices.”
Critics recently blasted several fashion brands for exaggerating or misrepresenting their so-called sustainability credentials. Greenwashing is an increasing challenge facing retailers, Watt says, but he notes the lack of a universal standard for what is considered legitimately sustainable. “We’ve seen instances in the UK of investigations launched into greenwashing into fashion brands for making eco-friendly and sustainability claims. Any brand which is making claims about its sustainability credentials is going to face further scrutiny.” Heightened regulation in the coming years will see further scrutiny of the robustness of brands’ social and environmental claims, he adds.
Maria Kelly of the Climate Ready Academy is focused on getting retailers ready for this — last year they helped almost 1,650 companies make the transition to a sustainable organisation. says it is becoming increasingly clear to the retail sector that they need to ensure they do all they can to be sustainable, as consumers and organisations reconsider how they engage with retailers with poor or limited green credentials. “While transformation can be challenging, businesses that are taking action are recognising that it also can offer opportunities to attract new customers and to identify efficiencies and reduce costs,” she says.
However, both practical and educational support will be required to ensure retail organisations can embed sustainability into their strategy, Kelly says. “In addition, retail and eCommerce activity can be carbon-heavy and create waste which means they will need to develop the competencies to comply with corporate reporting requirements, such as the EU’s Corporate Sustainability Reporting Directive, that are coming in the next few years.”
The Climate Ready Academy offers an online Sustainability Pass programme, which aims to support staff of all disciplines and skill levels in developing awareness in core sustainability areas including energy, water, waste, biodiversity, sourcing and responsible citizenship. “Our Sustainability Leaders programme is a great starting point for retail businesses looking to develop a practical, action-based strategy, while our series of Masterclasses offer the opportunity to hear from experts in areas and find out what best practice looks like,” Kelly explains.
Ikea and sustainability
Can the Swedish mega-retailer achieve true sustainability when they sell 4.5 million Billy bookcases every year? “Yes,” is the short answer, says Greg Lucas, who is country sustainability manager for Ikea UK and Ireland.
Lucas explains that Ikea employs concrete metrics as part of its sustainable objectives; its “People and Planet Positive” strategy outlines a roadmap, with science-based targets, to become circular and climate positive by 2030 and reach net-zero emissions no later than 2050. As of 2021, Ikea’s climate footprint had decreased by almost 1.6 million tonnes of carbon dioxide in absolute terms globally, making them on track to achieve this goal.
More than 30 per cent of its range is “People and Planet Positive”, Lucas adds, while the popular “Buy Back” Initiative is allowing customers across Ireland to sell back their pre-loved Ikea furniture to the retailer in an effort to contribute to a circular economy. The “Live LAGOM” programme offers tips to inspire healthy and sustainable living. ”Our aim is to make sustainable living easy and accessible, and further support our customers in taking a stand against excessive consumption,” Lucas says.
Ikea embeds this ethos throughout its supply chain, he adds. “We are aiming for 100 per cent electric home deliveries by 2025. We will remove plastic from our packaging by 2028 and have removed batteries from the range already, selling only rechargeable batteries.” Ikea was one of the first retailers to switch to only selling LED-based lighting, he notes. “We believe that if we don’t lead the way in innovative and responsible retail, we won’t have the opportunity to positively impact the world for the better. While sustainability has long been part of Ikea’s DNA, there’s an even greater urgency for businesses like ours to play our part in tackling climate change.”