Once considered a fleeting trend, sustainable retail has become a hot topic for a growing number of environmentally aware shoppers. From greener delivery alternatives to better packaging choices, consumer demand for more sustainable options is on the up – and it’s influencing how and where they choose to spend their money. Last year, ethical consumer spending in the UK hit record levels.
With consumers increasingly concerned about their own environmental footprint, tolerance for out-dated supply chain or product sourcing practices is waning. According to a recent study, 62% of UK consumers prefer to buy from companies that are reducing plastic use, and two-thirds want greater transparency on how companies source their materials.
What’s more, millennials and Gen Z’s are opting to align more closely with brands – especially those in the fashion and apparel industry – that are taking a more responsible approach, in line with their own eco-friendly shopping aspirations.
It’s time to commit
Acting on these consumer preferences is an increasingly strategic imperative for retailers. One that big brand names like H&M, Levi Strauss and Waitrose have already publicly committed to and integrated into their business operations.
But the value of adopting a more green approach goes beyond simply responding to consumer sentiment. For example, smarter trend prediction results in less overstocking and unsold inventory that has a direct impact on the bottom line. With £2bn worth of unwanted surplus consumer goods, produced in the UK, heading to landfill each year, addressing logistical inefficiencies is clearly a top priority.
Here are a few ways that retailers can kick-off a more sustainable retail approach that resonates with consumers and boosts profit margins at the same time.
1. Gain a real-time view of inventory
Poor inventory visibility creates a multiplicity of potential wastage and logistical inefficiencies that minimise margins. Over purchasing and overstocking, which results in unnecessary markdowns, is just the start. Overselling of items, online or in physical stores, also causes issues, for example leading to order fulfilment delays that can result in cancelled orders and unhappy customers.
The cost of overproduction and surplus inventory represents a serious problem for retailers. With a staggering amount of capital tied up in inventory sitting unsold in warehouses, using order management software to get a grip on inventory management can help to minimise product obsolescence and streamline operations for enhanced sustainability.
2. Streamline shipments for green efficiencies
With a real-time view of inventory across every channel, implementing a streamlined omnichannel offering will help to eliminate the unnecessary and wasteful shuttling of goods back and forth between outlets and consumers.
Order management software can help retailers ensure that products travel the shortest distance to the customer. Plus, retailers can use these platforms to boost the amount of inventory that’s available in real-time, enabling a more flexible order fulfilment strategy that enhances the customer experience.
Finally, accurate real-time inventory data opens the door to offering customers greener and more convenient ‘Click and Collect’ options and ‘eco’ home-delivery slots, which leverage clustered delivery capabilities to maximise distribution routes for less environmental impact.
3. Rethink returns
Handling returns represents a major operational and cost headache for retailers. Taking proactive action to minimise the likelihood of returns that have such an environmental and commercial impact for the business begins with reviewing how products are merchandised online. Ensuring that product pages contain accurate photographs, detailed descriptions and videos – with close up images of key details and features – is just the start. Sizing information – including fit assistants – and online chat can help resolve customer queries up front, so they make the most appropriate purchase for their needs.
Offering options for shoppers to return online purchases to stores can also help to decarbonise the logistics involve – similarly crowd shipping pick-up options, lockers in shopping malls, or cycle couriers, can all help to make the returns process greener.
4. Recycle it – or rent it
From furniture to clothing, millennials are fuelling the consumer goods rental economy. What’s more, research shows that millennials are more willing to pay more money for sustainable retail offerings. Furniture giant Ikea is already testing out a range of subscription-based leasing offers in a bid to appeal to environmentally conscious consumers and boost its sustainability credentials.
Other brands on the UK high street are initiating high profile recycling programmes. Walkers Crisps had launched its own crisp packet recycling scheme; packets are shredded and used to make other products. Meanwhile, The Body Shop has implemented a ‘return, recycle, repeat’ programme that rewards customers for returning bottles, tubs, tubes and pots.
5. Donate it
If oversupply persists, retailers should demonstrate their green credentials by ensuring that items are donated rather that condemned to landfill. With more than half of UK consumers saying they would shop elsewhere if a retailer was throwing surplus stock rather than giving it to a charity, trading ethically is clearly high on customers’ wish lists.
Leveraging technology for a greener future
Today’s retailers are between a rock and a hard place when it comes to balancing customer demands for speedy fulfilment with greener business practices that address their growing eco-expectations.
Technologies, like order management software, can help retailers ensure the right products are manufactured at the right time and delivered quickly, accurately, and with maximum efficiencies. Underpinning new and more sustainable retail strategies that optimise inventory for every order, these solutions make it easier and faster to leverage real-time data for consummate order orchestration across every distribution point.
Credit: Graham Jackson, CEO, Fluent Commerce