The Sustainability High Five – Repair, Rental, Return, Reporting, and Regulation
Consumers are becoming more sustainably conscious and now will to pay over 25% more for sustainability. No longer can sustainability be a buzzword as retailers must act with long-term strategies to make the industry greener. There are some key sustainability changes retailers can make and for Gavin Masters, Principal Digital Strategy & Transformation Consultant at Columbus UK, it’s all about the 5 R’s:
- Recommence
- Rental
- Repair
- Reuse
- Regulations
As the retail supply chain contributes to a quarter of greenhouse gas emissions (GHG) globally, action must be taken and it’s up to retailers to incorporate long-term sustainability measures into their operations. But where should they start?
Time for Retailers to Rake Sustainable Commerce Seriously
Concerns over waste and ethical practices in the retail market are high amongst Gen-Z and millennials, which has led to popularity increases within the recommerce and second-hand markets. In particular, the UK recommerce market is now worth approximately £6.5 billion and is forecast to nearly double in size over the next five years, reaching £12.4 billion in 2028. This shift in consumer mindset presents an opportunity for retailers to expand into this growing space.
The Rise of Second-Hand Platforms
Digital buying and selling hubs such as Vinted and Depop are already helping to reduce the impact the retail industry is having on the environment, while offering consumers diverse and affordable shopping options. Recommerce reduces demand for new garments and increases recycling opportunities, which in turn decreases demand for raw materials and lowers energy usage in factories.
For their part, retailers can incorporate many effective sustainable practices into business models. Upcycling materials to produce products and selling items for cheaper when they reach sell-by date are just two ways that retailers can appeal to the growing shared economy.
This expansion into the emerging recommerce market introduces new ways for consumers to engage with physical commerce, all while still personalising interactions, which can help retailers make further market gains and futureproof their business.
Read More: Is It Time To Embrace Natural Alternatives To Your Favourite Fashion Retailers?
Industry Giants are Paving the Way for Large-Scale Sustainability Initiatives
Fashion rental services, led by industry giants, have emerged as a top trend in 2024. Rental initiatives offer consumers access to trendy clothing without the environmental burden of ownership. By opting for rentals over purchases, customers contribute to waste reduction while making affordable, high-fashion choices, underscoring an important shift towards more sustainable fashion.
One concept that’s been tried and tested is the return market – but how is this helping to further sustainability efforts in the retail sector? Retail management systems consolidate shipments and maximise product reuse to help organisations minimise waste, optimise operations, and contribute to a more sustainable industry.
What’s more, leading retailers are experimenting with data analytics to highlight return patterns, which can inform decisions to enhance product design and sizing accuracy.
Read More: How Sustainable Retail Displays Can Boost Business Profits?
Don’t Just Bin it! Repair it!
Today’s customers want easy, seamless, and frictionless experiences – and efficient repair services, which allow customers the flexibility to choose how and where products get repaired, provide an ideal fit. In addition to extending product lifecycles, repair services create new revenue opportunities in the aftermarket segment – but the benefits don’t stop there.
Repair services offered as part of sustainability initiatives can enhance customer satisfaction, strengthen brand reputation, and capture additional value from existing products.
Retailers operating in the European markets will be familiar with the right to repair legislation. This new rule isn’t just about compliance as it offers companies further opportunities to elevate sustainability efforts. For instance, retailers able to provide an efficient repair service can reduce waste, lower environmental footprints, and position their brand as a leader in eco-friendly practices.
Legal Regulations Go Green
It’s not just consumers that are holding retailers to account for their commitment to sustainability as governments, suppliers, and regulatory bodies are adding pressure on companies to reduce carbon footprints and adhere to sustainability targets. While there are currently very few ESG laws or regulations in the UK, the country is starting to follow in the footsteps of EU legislation with regulations being introduced such as the Streamlined Energy and Carbon Reporting (SECR) and the UK Sustainability Disclosure Standards (UK SDS).
UK retailers operating in the EU also have to comply with sustainability regulations such as the Digital Product Passport (DPP) and the Corporate Sustainability Reporting Directive (CSRD). So how can retailers get ahead of this ESG regulation wave and approach sustainability measures as more than just a tick-boxing exercise?
Read More: Monitoring Supply Chain Standards Critical to a Greener Future
ESG Reporting Can Tackle More Than Just Compliance!
Witness what happened in the EU with the European Sustainability Reporting Standards (ESRS) and Corporate Sustainability Reporting Directive – these initiatives provide a roadmap for how retailers can strategically integrate environmental, social, and governance factors into business operations, and align sustainability goals with core objectives for competitive advantage. So where should retailers begin?
ESG reporting is a good starting point and can help companies tackle more than just compliance. Transparent ESG reporting, which involves the gathering and disclosing of data on a retailer’s environmental, social, and governance activity, nurtures collaboration, identifies areas for improvement, and anticipates regulatory changes. By embracing ESG reporting, organisations can successfully manage market complexities, drive societal impact, and ensure resilience.
Digital product passports (DPP) offer retailers another essential tool to address sustainability challenges. DPP provides a comprehensive record of a product’s lifecycle, including origin, composition, and environmental impact, enhancing transparency and accountability across the supply chain. The effective use of DPP presents an opportunity for businesses to enhance sustainability credentials and nurture innovation with help from technologies such as blockchain – a win-win for customer loyalty and the bottom line.
From a ‘Buzzword’ to a Retail Industry Priority – The Sustainability Story
As regulations and consumers go green, retailers using greenwashing tactics will fall behind. Instead, it’s time for retailers to utilise new technologies and data-driven insights and commit long-term to sustainability.
