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#RetailTrends2020: The eco-customer is always right

Today, it is hard to think of a clothing company that does not have a statement around sustainability linked to its image. Finding eco-friendly clothes used to involve braving yourself into a universe of brown, itchy and unflattering fabrics. Today, thanks to a wave of rising consumer eco-awareness, at a click of a button you can find several options for cool, soft and hip sustainable clothing, from high street to high fashion. Meanwhile, within the grocery sector, the key consumer-related drive for change and innovation has primarily been convenience – think plastic bags, self-checkout, even supermarkets themselves.

All of this change has been underpinned by the growing global consciousness around combatting climate change. As the world races to reduce its carbon footprint, the next decade marks a critical one for sustainability. Rising consumer pressure, teamed with the IPCC’s stark recommendations on the climate crisis, will accelerate environmental changes within the retail and grocery sectors. Here are the trends we can expect to see in 2020.

Edging towards a circular economy

Second hand, rental and subscription models are currently the top three fastest-growing categories in retail. In the future we’ll see a spike in alternative business models, with new entrants building on the likes of Rent-The-Runway, which has grown into a business recently valuated at $1 billion. Within the direct to consumer (D2C) space, digital brands such as the RealReal, Village Luxe, Reformation and All Birds are already severely disrupting the retail landscape – known for their sustainable efforts. As we look ahead, there will be heightened expectations for companies to comply with the demand for ethically sourced and sustainable collections.

Aside from being a response to consumer demands, we have found that most organisations must embrace the circular economy because the traditional linear economy will not be viable in the longer term. Retailers should approach the circular economy with a sense of opportunity, as over time the true costs of new materials will outpace that of reclaimed materials, especially if organisations are strategic in their choices from the very beginning.

Collaborative partnerships

Next year, we’ll see more retailers collaborate to boost their green credentials through partnering with like-minded sustainable companies and initiatives. Early in 2019, LVMH announced a partnership with Stella McCartney, while Kering has launched its own environmental P&L platform that offers full transparency to their customers. Yoox Net-a-Porter, who banned fur from its websites back in 2017, also launched their Net-A-Sustain campaign this year, focusing on ethically sourced and sustainable brands only.

Becoming transparent

Another trend we are seeing is an increasing demand from customers to know where and how their produce has been made, the working conditions in which it was produced, and the emissions from manufacturing and transport. Google searches for ‘sustainable fashion’ increased 61% since 2016, whereas magazines such as Vogue and Elle have used the term ‘sustainable fashion brands’ 267% more since 2016. Social media and the democratisation of information has amplified the voice of the consumers to really challenge standards and influence change. Next year, consumers will continue to expect transparency and a dialogue with brands – and brands need to be prepared for this.

Plastic packaging

In 2019 we saw ambitious pledges by more or less all the main UK supermarkets to reduce non-recyclable plastic packaging. Consumers seem to have taken the plastic bag tax in their stride, but it will be interesting to see if people are willing to change their behaviour when it comes to further initiatives, such as refilling glass bottles or plastic pouches from in-store liquid dispensers. Following recent attempts at Waitrose and M&S, we can expect to see expanded trials in selling loose produce.

Venturing towards veganism

Increasing concerns about the ethics of modern industrial farming has seen a growing number of younger consumers adopting a plant-based diet. Perhaps even more pressing are the concerns surrounding sustainability, largely driving this change. There are currently an estimated 700,000 vegans in the UK, but with the popularity of initiatives like Veganuary, this number is expected to quadruple in the next couple of years, with the UK meat-free market set to reach £658 million in 2021. The UK launched more vegan products than anywhere else in 2019, with Tesco, Waitrose and even Greggs all enjoying a well-publicised boost to their green credentials. Expect to see supermarkets expanding their vegan ranges and niche vegan disruptors popping up to grab a slice of this market.

Solving the last mile delivery challenge

Making the final leg of customer delivery profitable and sustainable is not an exclusive challenge for grocery, but it is of particular importance to those retailers looking to grow the online grocery market such as Ocado and Amazon. Recent research from Capgemini has revealed the consumers’ increasing desire for faster and more frequent deliveries. But what will prove more important to the next generation – convenience or sustainability? Expect to see experimentation with alternatives to home delivery, such as pick-up points and order bundling.

In 2020, the successful retailers will be those who can attract and retain customers by demonstrating shared values and promoting sustainable shopping behaviours. Adopting a sustainable agenda will also unlock a whole host of related operational cost benefits and should be viewed as an essential part of any responsible modern company’s corporate strategy. Next year will demonstrate that sustainability is not a fad or a fashion – it is an imperative.