October 2022

Retail trends show sustainability is the way of the future

Retail trends show sustainability is the key to the future. Here’s what you can do to meet changing consumer demands and get ahead of your competition.

The conscious and purpose-driven consumer has been demanding more from retailers in recent years.

Mounting evidence shows that future retail trends will be centred around responsible consumerism and that brands must act now to gain a competitive edge. 

In this article, we share what retailers and brands can do to meet changing consumer demands for more eco-friendly, socially responsible, and sustainable retail practices.

Responsible consumerism is on the rise

It’s a fact that consumers are now more likely than ever to buy from, invest in, and work for clean, green, and sustainable businesses. 

While interest in consumer sustainability has been trending for a while, recent studies show that consumers are now doing much more than talking about sustainability and are actively shifting their behaviour to match their beliefs. 

Conscious consumers are making their intentions clear. They want hard evidence of how retail brands are prioritising purpose over profit. And their numbers are growing every year.

For businesses, this means that sustainability must be more than an add-on benefit or a nice-to-have feature. The overall appeal of a brand or retailer is now closely tied to how they “walk the walk'' when it comes to green and ethical initiatives.

Sustainability is more than a buzzword

According to a comprehensive global study by IBM, the average consumer in 2022 is more likely to:

  • Take active steps to make their homes more environmentally friendly
  • Seek out sustainable products in the supermarket, department store. or online
  • Make sustainable products a larger part of their overall purchases 
  • Feel comfortable paying a premium for ethically-sourced and sustainable products
  • Invest money responsibly and ethically
  • Make ethics-based choices about their work and leisure activities.

One of the biggest concerns for businesses is that consumers will vote with their wallets and boycott or withdraw support from brands that ignore these trends.

"Making ethical choices is part of the modern business model. Consumers are drawn to retailers that make a positive social and environmental impact throughout their supply chain and across all stakeholders - and they make this known at the check-out."  
- Marnix Poot, Business Development and Partnerships, etika

Retailers need to keep pace and understand what it means to be an ethical business. Ultimately, they have to incorporate sustainable practices that go beyond tokenism and greenwashing and demonstrate a true commitment to the environment and social responsibility.

What is a conscious consumer?

Conscious consumers look beyond fashion fads, peer pressure, and price points, to carefully examine the way a product is made and marketed. Specifically: 

  • They’re willing to spend time researching a company's history, how and where its products are manufactured, its employment practices, and environmental credentials. 
  • They want to know that people and the planet matter just as much as profits to a business, and that their purchasing decisions are having a positive social, economic, and environmental impact. 
  • They’re happy to part with more of their hard-earned cash to support businesses with a purpose they can relate to.

Interest in purpose-driven brands has ramped up since the pandemic, with shoppers much less willing to gamble the environment and their health on polluting, degrading, or harmful products. 

Businesses that act now will have the advantage of building stronger relationships with purpose-led buyers, especially if they take a holistic, ESG-driven approach (more on that below!).

Ethical trends in business

ESG stands for “Environmental, Social and Governance” and refers to a company’s approach to a wide range of factors that impact people and the planet. 

For retailers, this means thinking about how sustainability could be improved across the business. As a 2021 report by EY suggests, winning customers and creating long-term value will depend on companies reviewing everything – “from sourcing and packaging to operations, footprint and investments.”

Retailers should take a strategic approach and adapt in ways that matter most to their customers. 

There are several key areas where consumers want to see change, according to research:

  • Minimising environmental impact and carbon footprint. Consumers are keen to support brands with products, packaging, operations, and waste management practices that are kinder to the environment. They are choosing things like plant-based foods, plastic-free beauty products, and eco-friendly goods that result from regenerative farming, recycling, and the circular economy. 
  • Demonstrating social responsibility. Showing respect for human rights and an assurance that workers are treated and paid fairly matters to conscious consumers, as does a real commitment to diversity and inclusion in HR practices. Evidence of a supply chain centred around fair trade or, more importantly, “Fairtrade” practices (there’s an important difference) is essential, as are operating in ways that consider the financial wellbeing of customers.
  • Giving back to the community. Companies that sponsor local events, use local suppliers, do pro-bono work, volunteer their employees' time for a worthy cause, and support charities and community groups, are more likely to earn the loyalty of conscious consumers.

“Consumers are becoming increasingly interested in the impacts of business to wider society and the environment. Proactive businesses today have a great opportunity to align with consumers to improve social and environmental conditions in an exponential way."
- Marnix Poot, Business Development and Partnerships Manager at etika.

Top tips for building sustainability into your business

It’s not enough to pay lip service to sustainability. Having concrete evidence of social and environmental responsibility is what defines ethical businesses today.

So, what strategies can you use in your business to move forward and embrace the demand for ethical, sustainable retail?

  • Adopt an ESG-based approach, rather than concentrating only on the environment, and prioritise the areas that matter most to your customers.
  • Once your objectives are in place, set targets and ensure that progress is being made
  • Strive to gain internal support for your initiatives by educating employees and providing incentives for positive behaviours and actions
  • Be transparent, keep customers in the loop, and avoid hiding things in the fine print. Also, find ways to provide “proof of purpose” at every touchpoint – from email communications, website copy, and content marketing to PR outreach and sponsorships 
  • And finally, an ethical business is one that’s always evolving! Continually reach out to suppliers, partners, employees, and customers for feedback so you can review, revise, and iterate. 

At etika, we’re wired for positive social impact, and social responsibility is part of our DNA. We firmly believe that being fair and responsible is more important than profit, by making transparent, affordable finance accessible.

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