The latest sustainability trends in retail
With consumer demand for environmental management increasing, retailers must keep pace with sustainability trends in retail and best practices that are environmentally-friendly.
The retail industry finds itself at a crossroads where sustainability cannot be an ethical decision, but rather, it is becoming increasingly clear that integrating environmental concerns should just be part of everyday business practices.
A circular approach and supporting innovation while driving down carbon emissions will have a lasting positive impact on us all, but is this the only way forward in 2024? In this blog, we’ll examine this and the latest sustainable trend drivers in retail, exploring innovative approaches and technologies that could revolutionise the sector in 2024 and beyond.
Businesses looking to respond to increasing consumer expectations and changing regulations need to understand sustainability trends in retail and implement effective sustainability strategies. Deloitte highlights the importance of understanding consumer attitudes towards sustainability and how to drive change, as over a quarter of all UK carbon emissions are from consumer spending, making them the single biggest contributor to total UK greenhouse gases, according to their latest sustainability report.
Retailers who act in accordance with these trends will not only reduce the environmental damage caused by their businesses. They will also find new ways to grow profitably by offering sustainable products and rewarding customers for sustainably responsible consumption practices.
Sustainability trends for 2024 and beyond
The demand for sustainability has a significant effect on all sectors of the retail industry, from those dealing in food and clothing to those dealing in luxury goods. This includes a growing focus on sustainability in food retail. As a result of their concern for the fashion industry’s influence on the environment, over one in five British consumers said they had cut back on their spending in 2023.
The most notable shift in consumer behaviour that stores can’t afford to overlook is the increasing level of consumer awareness, which is more than simply a passing fad. Top brands and high street names are feeling the heat to live up to customers’ expectations for more sustainable practices in retail as they shop at key retailers. Companies like Nudea are leading by example with their sustainability initiatives, as demonstrated in their annual report.
Retailers must stay updated on these developments to navigate the increasingly rigorous regulatory situation and maintain their competitive edge. As a result, governments and industry groups around the world are enacting stricter regulations to ensure that businesses operate sustainably. Significant fines and harm to the reputation of the brand might come from breaking these rules.
Additionally, sustainability can open doors to new business opportunities. There is a long-term economic case for sustainability because consumers are prepared to pay a premium for environmentally friendly products. Businesses that demonstrate a genuine commitment to sustainability can foster deeper customer loyalty and attract a broader customer base.
Here are some of the latest sustainable trend drivers in retail, highlighting new approaches and technologies that could revolutionise the sector in the future.
- The shift to conscious consumerism
- Develop sustainable supply chains
- The adoption of circular economy in Retail
- Green technologies and digital transformation
- Regulatory and compliance changes
- Embrace localism and community engagement
- Recommerce and resale retail initiatives
- Refill, redesign, reuse
Let’s examine each of these trends in more detail.
The shift to conscious consumerism
Conscious consumerism reflects this new trend about how people care for sustainability in what they procure. This change is happening throughout, and it also brings about increasing importance. McKinsey, for instance, conducted a study in 2020 that revealed more than 60% of US consumers are willing to pay more money for products wrapped in sustainable packaging. That’s a big deal. On top of this, eco-friendly consumers are expected to spend up to $700 billion worldwide on tech and durable goods by 2030.
This goes beyond retailers eliminating packaging waste from their stores. It is also about creating durable products. So when you emphasise quality and longevity, you not only satisfy the wants of those mindful shoppers but also establish more trusting relationships. This is good for minimising your carbon footprint, and it also ensures a nice cash flow of loyal customers.
Also, in the face of a sea of competitors, being upfront about your green initiatives and certifications can help establish your company as a leader in environmental responsibility. Our planet and your bottom line will benefit from your demonstration of a genuine dedication to sustainability.
Develop sustainable supply chains
Sustainable supply chains are integral to sustainability in retail. They are those that make an effort to minimise the environmental impacts associated with all of their product and service development, manufacturing, distribution, consumption, and end-of-life disposal. Given the linked nature of supply chains, this is no easy task, but it is vitally important because retail supply chains are responsible for 25% of the world’s greenhouse gas emissions.
Retailers can do much to create a more sustainable supply chain – sourcing sustainable materials close-by, working with renewable energy, optimising logistics and thus CO2 emissions, and providing fair labour conditions.
The adoption of circular economy in retail
The Retail Circular Economy is an advocacy for the design of products that should be 100% re-purposable and recyclable. In this day and age, we went from re-imagining one physical product for many purposes, to a “take-make-dispose” mentality.
If a store wants to minimise its effect on the environment, it will establish policies that keep products in circulation longer and reduce waste; this is called the circular economy concept. Two examples are IKEA and Patagonia. Patagonia repairs its goods so they don’t end up being disposed of as often, and IKEA repurposes some of its furniture. Another great example is the Jeans Redesign Project by the Ellen MacArthur Foundation.
This model is growing in appeal among environmentally conscious consumers. Retailers who implement circular economy practices can greatly improve their market reputation. Retailers that score high for social responsibility attract repeat customers and make history! Recycling and reusing materials, rather than landfilling them is not only eco friendly but can also provide a significant revenue stream in the future.
Green technologies and digital transformation
Green technologies and digital transformation play a crucial role in enhancing sustainability in retail. As an example, blockchain technology is enhancing sustainability-focused supply chain operations by making retailer logistics more transparent and traceable. Retailers can use blockchain to track where their goods come from and ensure sustainability in their supply chain.
Stores can also improve their energy efficiency, reduce waste, and streamline their supply chains with the help of technologies like AI and the Internet of Things. Their environmental performance improvement potential is great, but the implications of these technologies for sustainability can be difficult to dissect.
Regulatory and compliance changes
Retail sustainability is increasingly being made a priority by governments and local administrations with harsher measures. For example, recently issued directives would require retailers to investigate and lessen the environmental and social impacts of their supply chains (e.g., the Corporate Sustainability Due Diligence Directive, – CSDDD).
All retailers have to understand these regulations, be compliant with them, and avoid penalties while also getting a competitive edge in favour of sustainability. Taking these regulations on proactively is an effective way to demonstrate business values and possibly place you above your competition in the minds of investors, buyers, or other partners.
Embrace localism and community engagement
Consuming goods and materials that come from nearby sources is referred to as localism, and it chips away at our reliance on fossil fuels used for transportation. Another benefit is that these grassroots initiatives help build trust and deepen relationships with customers. Having less of an effect on the environment is a major goal in localism, and it can help with your brand as well.
Reducing packaging and transportation costs makes retailers more sustainable while increasing brand value as a local maker in the store’s area. This process contributes back to the economy. For example, purchasing directly from farmers benefits not only the local farmer but also ensures that consumers have a fresher product. You could also consider bringing in even more local artisans and businesses to participate if you want to showcase different products. Unique, locally made crafts would appeal to customers actively searching for such a service.
Not only does this benefit the world, but it also helps businesses bond with their surrounding communities, which results in increased local brand loyalty and supporting your town’s economy.
Recommerce and resale retail initiatives
Through recommerce and resale retail solutions, secondhand, pre-owned, or used goods are offered to consumers. According to the Census Bureau, almost three-fourths of retail executives said they currently offer or are open to providing secondhand goods to their customers, an increase from 2020, the report said. This shift reflects a broader consumer movement towards eco-friendliness and reduced waste.
In addition to appealing to eco-conscious shoppers, this trend opens up new avenues of income beyond the sale of clothing. By making it possible to resell items, retailers not only prolong the life of products but also help reduce waste in general. Also, recommerce is a strategy that can bring in customers who are looking for unique vintage items as well as those who are price-conscious.
In order to take advantage of the growing demand for eco-friendly products while also contributing to an already robust secondary market, retailers can set up dedicated sections for resale items, team up with existing online platforms that focus on resale, or develop their own reselling programmes.
Refill, redesign, reuse
Many retailers have taken on the refill, redesign, and reuse movement. This is true for all kinds of products, from personal care and domestic cleaning products to pet food and everything in between. Retailers that adopt this approach can win the hearts and habits of their customers, allowing them to live a more sustainable life, hence reducing demand for single-use packaging. Retailers are also doing their part by creating refillable lines and re-designing packaging to be reused.
For instance, Lush has refill options on products, while The Body Shop has started setting up personal care product refilling stations within their stores. Not only do these initiatives cut down on waste, but they also attract environmentally optimistic consumers who are seeking sustainable shopping alternatives.
Final Thoughts
Retailers today need to make significant changes in line with sustainability trends to help create a sustainable future. Retailers can embrace green technology, the circular economy, localism, and the resale renaissance to enhance their sustainability efforts.
To stay ahead, you need to keep up with new rules and customer needs, and follow changing standards to stay compliant. By incorporating these sustainability trends in retail, retailers are not only able to reduce their carbon footprint and waste but also provide the sustainable option that a growing number of customers want.
Want to learn more about the latest retail trends? Join us at the retail event The Retail Conference on November 6, 2024, in London. Drive your business successfully into 2025 and beyond. Register today.
