Building a case for sustainable retail

Building a case for sustainable retail
Dec 9, 2019
Environmentally focused consumers are pressuring companies to implement sustainable practices beyond greenwashing—or lose their loyalty.

Greta Thunberg certainly has shaken up the global conversation on climate change, and we have seen how sustainability as a macro trend has called on travel and hospitality brands to step up climate-change-fighting efforts. Beyond travel and hospitality, this trend is also prevalent in retail, particularly fashion.

According to the UN and Balance for Small Business, the fashion industry produces nearly 20% of global wastewater and almost 10% of greenhouse gas emissions. If that weren’t already concerning, numbers around U.S. consumer waste are reasons to sound the alarm. Only 15% of consumer-used clothing is recycled, and while the average person buys 60% more clothing compared to 15 years ago, they keep their clothing items for half as long. Furthermore, not only does it take hundreds of years for synthetic clothing to decompose, but also $500 billion is lost every year due to clothing that is simply thrown away before the end of its lifespan. Yikes.

And it’s not just about environmental health. It’s also about economic health. According to CBS News, the fashion industry employs over 75 million people worldwide, including 10% of Americans. As severe weather becomes more common, retail income becomes more unstable due to transportation interruptions. (Planalytics estimated that Hurricane Florence cost retailers and estimated $700 million in 2018.) We need retail, and retail also needs us.

It’s no surprise that the resale market reached $24 billion in 2018 and is expected to grow to $51 billion in 2023, according to thredUP. We’ve seen upcycle brands capitalize on this trend, the latest being the Kardashian-Jenner empire bringing a new resale line to life.

Brands are taking action to minimize their impact

So, what are non-upcycle fashion/retail brands currently doing to minimize their impact?

  • JCPenney has partnered with thredUP to offer items from brands it doesn’t currently carry, so as to not cannibalize their own sales. The brand also extends the benefits of JCPenney Rewards to thredUP purchases, to encourage shoppers to buy used.
  • DSW awards VIP members 50 points for donating new or gently used shoes in store to those in need, extending the life of shoes which otherwise might be thrown away.
  • Lush Cosmetics asks customers to recycle clean black makeup pots in store so that it can break down, remold, fill, and reshelve pots, in order to cut down overall plastic use and carbon footprint. In exchange for 5 clean pots, Lush rewards customers with a free Fresh Face Mask. The brand has also committed to going package free.

Environmental concerns matter—how do they tie into loyalty?

Through our proprietary Humanizing Loyalty research, ICF Next found that 90% of customers want [brands] to “live up to [your] promises.” Shared values drive emotional brand loyalty, as opposed to transactional loyalty. It establishes deeper bonds and can increase lifetime customer value.

In fact, shared values are so powerful that eMarketer found 47% of internet users worldwide have switched products or services because a company violated their personal values. Of those who switched, 11% cited protecting the environment, and 5% cited climate change as reasons why they opted for a different product or service.

Gen Z in particular have established themselves as the activist generation who put their money where their mouth is: they are switching to brands associated with a cause, and they are willing to spend more on sustainable goods and services. Gen Z is a key demographic; they will have twice the spending power of Millennials in 2020, and they influence 36% of household purchases.

So how can your brand capitalize on the power of shared values with current and prospective customers?

Make changes and show how you go above and beyond without “green washing.” Here are some ways to get started:

  • Change your lightbulbs
  • Design eco-friendly packaging
  • Use better chemicals in manufacturing
  • Encourage customers to allow for longer shipping times
  • Encourage retail employees to carpool or take public transportation

The call to action is inevitable; luckily, how you start to implement sustainable practices is your choice.

ICF’s global marketing services agency focuses on helping your organization find opportunity in disruption.
Go to ICF Next
Meet the author
  1. Lauren Sutherland, Strategist, Customer Loyalty

The latest marketing trends, uncovered.

Subscribe to get insights, commentary, and news sent straight to your inbox.