Authors: Benjamin Gietzendanner, Marine Wellauer, Janina Morgen
Sustainability is a crucial topic in retail, notably in the fashion industry, which is considered the second most polluting industry globally and has been criticized and urged to reduce its environmental and social impacts for many years. From sourcing products more sustainably to upstreaming traceability, improving operational efficiency and creating new business models, retailers have several levers to pull to bring about the necessary changes on a global level.
While the most critical actions happen across all departments, small but essential steps can be taken in the physical stores where customers directly interact with the brand. By integrating sustainability and ethics into the boutique environment, brands can show their commitment and leverage boutiques to showcase their social consciousness. Nowadays, stores are not only about product distribution, but they are also about building long-lasting relationships with their customers – customers who are more and more aware of global environmental issues and their origins.
Consumers are looking more than ever for business models that align with their values as well as social and ecological purchase resolutions. A study by data platform Euclid revealed that 52% of Millennials and 48% of Gen Xers feel that the brands they like should align with their values, while 35% of Baby Boomers surveyed felt the same way¹. Aligning with customer expectations is of great importance no matter the generation of customers and pays off because customers are willing to pay a green premium for more sustainable brands and products. Showing a brand’s commitment and sustainability efforts in its physical boutiques makes customers aware of the importance of the topic. However, caution should be taken not to falsely clarify commitments and trifle with in-store messaging as customers are increasingly aware of misleading claims and demand more and more transparency.
Leveraging a boutique to showcase a brand’s consciousness can incorporate various physical and digital elements. A simple way of communicating in-store about the brand’s commitment is by using simple visual materials that explain production processes, products origins, and product composition as new and sustainable fibers and fabrics. Adidas applied this strategy in several boutiques by displaying plastic waste and explanatory material for its products made of reused ocean plastic.
The store serves as a means of communication and can further serve as a means of direct sustainable actions. A dedicated corner to repair used products is one way of appealing to customers as it prevents products from being replaced and increases their lifespans. Another in-store circular solution is to install bins to bring back used products that the retailer will reuse to create a closed-loop. Also, if returned products are still intact or slightly damaged, they can be repaired and resold as secondhand products. Returning impaired products can equally serve to close the loop by recycling or upcycling the materials. The trend of recommerce is not only emerging as a C2C marketplace but is also promising for retailers. Patagonia is a pioneer when it comes to recommerce by reselling its secondhand products in its stores as well as online. Creating a dedicated rack with secondhand products is a simple but effective and sustainable activation in retail. It is also noteworthy that the resale market is worth $36 billion today and is growing 11 times faster than traditional retail and being incredibly profitable for the luxury sector².
These retail activations are more than means of communicating the brand’s consciousness: they are new business models generating additional revenue streams and, most importantly, reducing environmental impacts.
1) Euclid Analytics: Evolution of Retail: The Brand Perception Effect, 2018
2) thredUp: Evolution of Retail: 2021 Resale Report, 2021