Sustainability needs to top retailers’ shopping lists

By Nathan Lomax, co-founder of Quickfire Digital.

Retailers have not had it easy of late. Soaring energy and supply chain costs and customers facing pressure through the cost of living crisis have resulted in a loss of 15,000 jobs at the start of 2023.

Official data from the ONS shows that retail sales have fallen steadily since the summer of 2021, culminating in a sharp increase of the number of physical shops closing across the UK.

With those impulse purchase pounds going on heating and food, apparel brands are going to have to work harder than ever to encourage them to shop.

And while price will be a decisive factor for many, a growing number of consumers are putting credible green values at the top of their own shopping list with a recent piece of research* highlighting that four in five UK consumers will boycott fashion brands which fail to prioritise an environmental and social agenda within the next two years. 

That’s a lot of lost customers. In a very short space of time! 

Retail playing catch-up on sustainability and good working practices

The retail sector has a long way to go to move into the green. The fashion industry alone is responsible for as much as 10 percent of global carbon emissions - more than flights and shipping combined - and one fifth of all plastic produced each year.

A study in 2020 found that the fashion industry needs to fundamentally change in order to mitigate its environmental impact but one of the reasons the industry’s emissions are growing is due to fast fashion. The growth of throwaway, or fast, fashion, with it often being sold cheaper has led to more going to landfill and workers being exploited to grow profits.

Earlier this year the Competition and Markets Authority launched a probe into whether ASOS and George at Asda were misleading their customers over their green credentials. In addition Burberry faced a backlash when it was discovered the company had burned $36.5million of clothing in one year rather than discounting products and selling them to the ‘wrong people’.

Thankfully, there are some apparel brands steering a more ethical course and proving that profitability doesn’t have to come at the ultimate cost of destroying the world around us.

In the UK - on the Isle of Wight to be exact - there’s Rapanui. The business makes clothing only when items are bought - therefore reducing waste - and incentivises customers to send their old items back so that the material can be recycled and made into new clothes. Richard Branson has said “Rapanui are in my list of the top 50 global eco companies.”

Patagonia has grown its clothing business thanks, in a large part, to its approach to sustainability and keeping a watchful eye on its supply chain. It’s now a 50-year-old business driving an estimated $1 billion sales annually.

How to plan for a sustainable retail future

Retailers should have ESG (environmental, social and governance) within their top three boardroom topics to strengthen their purpose and reputation, according to Paul Martin, UK Head of Retail for KPMG. 

There’s clearly a line of thought that those who fail to prioritise sustainabilty and ethics are going to find it ever more difficult to compete and, ultimately, survive - especially during a cost of living crisis. 

Here are three reasons highlighting the importance of prioritising a sustainable agenda today, tomorrow and in the future:

1. The approach builds customer trust and loyalty. Businesses which showcase, and live, the values and ethics shared by their customers inevitably find it easier to retain those shoppers. And with marketing cost-per-acquisition costs on channels such as Google and Facebook constantly rising, growing a loyal customer base is pivotal for ongoing success
2. Climate change is high on the priority list of young people i.e. the next generation of shoppers. It’s in their social media feeds, and ‘at the heart’ of the national curriculum so it’s important brands are transparent about what positive they are making. This generation is also very smart and in tune with greenwashing claims. Those brands who do, will be called out, which will have a critical impact on reputation
3. Staff retention rates increase when people work for a business they can truly believe in. Back to Patagonia, and its staff turnover rate is less than 4% against an industry average of 13%. Being environmentally conscious is one thing but when business leaders genuinely care about the people they work with and employ, loyalty and trust is built in bucketloads.

Retail needs a new model

While there are pockets of retailers building powerful brands and robust businesses by operating ethically and sustainability, we haven’t yet reached the point where this thinking is ingrained into the industry. 

But it’s coming, driven by consumers. And when it arrives, the businesses who will survive are the ones with a loyal customer base built through credibility. Others might not even see the end coming until it’s too late.

* Research commissioned by Quickfire Digital and Climbing Trees. 2,000 UK consumers.