By Dan Williams, Founder and Managing Director at 100% Group
No-one ever said creating a retail strategy for a global brand was easy. Today, it’s tougher than ever.
As they fight for growth in ever-more saturated markets, brands face fast-evolving social trends, a volatile political climate, and unpredictable trading conditions. In plotting the path ahead through this complex mix of issues, it can be easy for brands to let sustainability take a back seat.
But is that the most sensible approach?
The evidence suggests that building sustainability into a brand isn’t just good for the planet; it’s good for business too. As consumers become better educated about sustainability, they become more concerned about the ethics of their products. They want to engage with and buy from brands that both talk about sustainability and prove their commitment with practical actions.
This view was confirmed by a recent survey we conducted with 200 retail professionals, the results of which show most of those questioned believe building sustainability into a brand offers huge potential.
Questioning also revealed, however, that many brands were not exploiting this potential – leaving the field wide open for those that do.
Our research found that sustainability is a driving force for sales and brand engagement, with 86% of respondents saying that the issue is important to customers when making a buying decision.
When asked how important it was to demonstrate a commitment to sustainability in different aspects of a brand, respondents ranked in-store elements relatively highly: 67% (the highest number) of respondents said it is either critical or very important to demonstrate a commitment to sustainable packaging and 61% to demonstrate a commitment to sustainable retail displays.
This isn’t surprising, as both packaging and display have an immediate impact on the sales experience. Respondents stated, for example, that a planned and implemented retail display increases sales by 30%, profits by 28% and footfall/traffic by 25%. 97% of those questioned said that retail displays were important for sales in general.
For the wider aspects of the brand – product manufacturing, distribution, branding and marketing – figures for the importance of demonstrating a commitment to sustainability were also significant: between 52% and 63% of respondents rated this as either critical or very important for each aspect.
Though these figures are positive, none come close to reflecting the headline finding that nearly nine out of ten respondents believe sustainability is important in buying decisions. There is a similar mismatch in terms of the clear benefits people expect an environmental sustainability policy to provide and the number of people who say their brand has such a policy in place.
Expected benefits were an average increase of 20% in footfall in-store, 21% in profits, and 23% in sales. Despite these potential rewards, however, only 69% of respondents said their brand had an environmental policy. 10% said they didn’t know if their brand had a policy or not.
These figures show a clear disconnect between what people believe will make a difference and what they do in practice. The discrepancy highlights that there is plenty of space in the market for those keen to put sustainability at the heart of their brand and use it to connect with customers.
Brands that do choose to put a focus on sustainability must, of course, do so as a genuine initiative rather than a marketing ploy. The importance of trust in keeping customers loyal has been widely recognised. Brands present false sustainability credentials at their peril. When businesses claim one thing and do another, customers – quite rightly – feel cheated. And a customer who feels cheated is rather less likely to support or engage with the brand on social media or to buy the brand’s products.
When planning strategy, businesses may not be able to second guess the future. But by aligning their brand with current customer concerns, they can give themselves a strong competitive advantage. In a world of fake news and daily revelations of dishonest practices, we’re all looking for organisations we can trust to do the right thing. For a growing number of customers choosing which brands to support, the ‘right thing’ is a commitment to sustainability combined with an honest approach to the issues.
And – as the survey shows – opportunities are there for the taking.
It’s always been important for brands to evolve in response to customer requirements. In today’s crowded market places, this responsiveness is ever-more critical – yet many brands are still underestimating the importance of sustainability as a sales driver. In doing so, they risk losing market share.
That market share will go instead to those who understand their customers better: brands that embrace the issue of sustainability and make buying their products the easy choice for customers searching for the ethical option.