New Pushes Toward Sustainability in Retail

New Pushes Toward Sustainability in Retail

Written by: Stephanie Bariatti, SMB Media Marketing Consultant 

            Although April is Earth Month, environmental issues are at the forefront of discussions every day of the year.  Over recent years there has been a push from both consumers and executives alike, to focus on ways to make business practices more sustainable from an environmental standpoint.  Many retailers have embraced this stance of making better decisions for the environment and have rolled out new sustainability initiatives in recent months. 

 

            Retailers and large companies have come to realize that consumers want to spend their money in stores and on products where environmental responsibility is a focus.  It is a primary consideration for Millennial and Gen Z consumers, who are increasingly flexing the power of their wallets.  Retailers cannot afford to ignore the demands of these two groups.  Millennials represent $600 billion in spending power, while Gen Z accounts for another $140 billion.  

 

            And it doesn’t end with them.  A recent report produced by First Insight and the Baker Retailing Center at the Wharton School of the University of Pennsylvania found something quite interesting.  The Gen Z consumer has outsized influence on not only their Gen X parents but even their Boomer grandparents when it comes to sustainable shopping.  In the two years since First Insight’s first report on Gen Z and sustainability was published, Gen X consumers’ preference to shop sustainable brands increased by nearly 25% and their willingness to pay more for sustainable products increased by 42%.  So, consumers across all generations—from Baby Boomers to Gen Z—are now willing to shell out more for sustainable products.  Just two years ago, only 58% of consumers across all generations were willing to spend more for sustainable options.  Today, nearly 90% of Gen X consumers said that they would be willing to spend an extra 10% or more for sustainable products, compared to just over 34% two years ago.

 

            In addition, it is not only the public that is looking for these issues to be addressed.  Stakeholders are also demanding transparency and accountability on organizations’ environmental efforts.  And companies that effectively communicate their commitment to achieve positive impact, how they plan to meet those commitments, and how progress is measured, can earn stakeholder trust, which is essential for business resilience, survival, and profitability.

 

            Executives are on board.  During September and October 2021, Deloitte polled over 2,000 C-suite executives across 21 countries to examine business leaders’ and companies’ concerns and actions when it comes to climate change and environmental sustainability.  Almost 79% of executives said they saw the world at a tipping point for responding to climate change compared to just 59% eight months prior.  Despite the gravity of the moment, there is a prevailing sense of optimism as 88% (compared to 63% eight months prior) agree that with immediate action, we can limit the worst impacts of climate change. 

 

            The types of actions that have already been taken by companies are shown below.  It is followed by the actions that will take more time, but are in process.

  

            

            Some specific steps that major corporations have taken as of late include the following:

 

  • Amazon and Target are both seeking net-zero carbon certification for new store models. Amazon said its 35,000-square-foot Amazon Fresh Seattle space would be the world’s first grocery store to receive the certification. Target said its Vista, California, store will generate up to a 10% energy surplus each year.  
  • Amazon recently launched an environmentally friendly product line.
  • Target rolled out Target Zero, a curated selection of products with packaging that’s designed to be refillable, reusable or compostable, or made from recycled content or materials like aluminum, steel or glass that reduce the use of plastic. 
  • Starbucks is testing reusable cup programs, as well as partnering with Volvo to research the use and potential scalability of electric vehicle charging stations at its stores.
  • L’Oreal’s Garnier brand recently launched the “first ever mass market no rinse conditioner” which, it says, saves 100 liters of water per tube compared to a traditional wash-out conditioner.  It also says that the product’s packaging contains 75% less plastic than traditional conditioners and is made in a carbon-neutral factory using a water loop, to re-use any water needed in its production.
  • Molson Coors announced that Coors Light will ditch the plastic rings and come in a recyclable, sustainable cardboard alternative starting later this year.  By 2025, they also plan to ensure all packaging is 100 percent reusable, recyclable or compostable, ensure all plastic packaging is made from 30 percent recycled content, grow Coors barley in 10 percent less water, brew beer in 22 percent less water, restore 3.5 billion gallons of water to watersheds and reduce greenhouse gas emissions by half in direct operations and by 20 percent across the company’s supply chain.
  • Lululemon, the athletic apparel company, debuted its Earth Dye collection last May, relying on plant waste from beets and oranges rather than synthetic dyes.  It partnered with other companies to experiment with lab-grown polyester made out of carbon emissions and to incorporate lab-grown leather.  Lululemon is a founding member of the Mylo Consortium devoted to using mycelium, a mushroom’s root structure, as a viable material alternative.  Lululemon also invested in the bioengineering company Genomatica to find new ways to create plant-based fabrics such as a plant-based nylon.

 

            However, not all retailers share the same sentiments.  There are still some holdouts, due to a variety of reasons including costs to change procedures.  Yet, they may have to change their ways sooner rather than later.  The New York State Senate is in the process of passing a bill that holds fashion retailers who don't prioritize ethical practices accountable.  The bill, which is currently in committee, would require large fashion retailers and manufacturers operating in New York to map out at least half of their supply chain and identify any possible environmental issues in their processes.  If enacted, Assembly Bill A8352 would be the first bill of its kind in the USA and would reflect changing attitudes regarding retail's sustainability, as well as set the stage for potential similar bills in the future.

 

             Though it may seem like a daunting task, it may not be so difficult to bring sustainable practices to your own business.  Considering how many consumers are clamoring for these indications of sustainability, starting with even the smallest changes might be better for your bottom line in the long run.

  

Stephanie Bariatti works as a Consultant and Project Manager for SMB Media Consulting.  She has had extensive experience with many facets of advertising and media, having worked for and with creative agencies, production companies and research departments.  She lives in New York with her wonderful husband, three lovable little boys and a snuggly Golden Retriever.

 

 

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