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Brands shouldn’t let sustainability take a back seat in retail strategy – here’s why…

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.

Retail brands ‘failing to deliver on in-store sustainability’

Retail brands are failing to address sustainability throughout the product lifecycle, despite 85% claiming that it is important, and 86% ranking it as an important factor to customers when making a purchase decision

That’s the result of a survey of 200 retail professionals by undertaken by international retail installation specialist 100% Group, which says that while sustainability-conscious brands place high importance on the raw materials used to create retail displays and packaging, they neglect the end-of-life outcome.

When it comes to in-store retail displays, the research (conducted by market research company Sapio) found that 61% of retail brands said that their displays are sustainable.

Yet while brands find that sustainability programmes come at a cost, incurring an average increase of 18%, the decision appears to pay off, producing an average 23% increase in sales from making displays more sustainable. 

The research suggests that the future of retail is green; 22% of retailers said they already have sustainability initiatives in place and a further 43% are planning to introduce them within a year. 

Retail display (72%), and packaging (61%) are the two areas where sustainability is taken into account most, but only 41% address it at product end-of-life, suggesting that brands and retailers are missing a circular sustainability policy.

This, says 100% Group, means that retail displays at best end up being recycled, while many are simply thrown away when they reach the end of their life rather than being re-used or redeployed to extend their lifecycle. 

Dan Williams, Founder and Managing Director of 100% Group said: “There appears to be a significant disconnect between the brands that claim to be sustainable and those that apply this in a full circle capacity. While it’s positive to see brands making sustainable choices on the products, packaging and displays themselves, it’s important to consider end-of-life arrangements upfront to ensure materials can be properly redeployed instead of sent straight to landfill.” 

Of the 69% of retail brands that say that their brand has an environmental sustainability policy, over half use recycling targets to manage it, while others focus on material reduction targets (45%) and energy consumption (41%).

Although brands appear to be making conscious efforts to improve sustainable practices, 100% Group says the figures suggest that green regulations don’t go far enough, with only 23% of respondents using these as guidelines to set targets.  

Unsurprisingly, brands believe that packaging is the most important area to demonstrate commitment to sustainability (67%) with branding and marketing falling at the bottom of the list.