Information overload: Why retailers must finetune sustainability communication
Retailers must be careful not to "bombard" consumers with information, despite heightened external pressures to champion Environmental, Social and Governance (ESG) issues, according to delegates from Kingfisher, H&M and Debenhams.
Speaking at edie’s Responsible Retail event in London on Wednesday (20 September), delegates from leading retailers agreed that using labels as a communications tool could sometimes be seen as “helpless”, and instead urged businesses to tweak operating models to bring consumers closer to brands.
Labelling is used by retailers as a badge of honour to certify commitments to sustainability, which can range from ethical supply chain pay, sustainable sourcing and sustainable production. But with more than 140 ‘eco-labels’ available, the speakers warned retailers to be succinct in their messaging.
H&M has an ambitious sustainability strategy to create a “climate neutral” supply chain by 2030 before investment into offsetting measures will deliver an intended “net positive” impact by 2040. But as the company’s sustainability manager for UK and Ireland Catarina Midby explained, communicating this to consumers is a delicate balance.
“Communication is tricky,” Midby said. “There’s so much we can communicate, but there’s a limit to how much consumers want to know. More than 47% of our customers think of sustainability as part of their purchasing decisions, so we believe in a circular future for fashion.
“We need to help these consumer in consuming rather than just buying. It’s all about communication and the labelling is hopeless sometimes.”
As part of its climate positive goal, H&M pledged to use 100% recycled or sustainably sourced materials in its products by 2030. Currently, recycled content stands at 26%, while 43% of the company’s cotton comes from sustainable sources, such as the Better Cotton Initiative where H&M acts as the biggest certified user.
Those two targets alone provide the opportunity for H&M to preach its strategy to consumers, but Midby is concerned that it could get lost on the packaging. Instead, H&M are developing a new sustainability index, which it hopes to introduce next year, that would allow consumers to scan a product on their phone in order to track and examine its sustainability credentials.
One such area where H&M is hoping to use the innovation is on its Conscious Exclusive range, which includes a full clothing collection for men, women and kids. The range made from H&M’s pioneering ‘Bionic’ material – a recycled polyester made from plastic shoreline waste. The Swedish multinational has also developed a Conscious Exclusive fragrance made from organic oils.
Influence and engage
Also speaking at the event was Debenham’s director of ethical trade and corporate responsibility Caroline Haycock, who agreed that the introduction of a single method to “scan” the sustainability of a product would boost communication strategies.
Haycock joined Debenhams in 2008 to help establish the firm’s corporate responsibility strategy. She noted that her department was the “spanner in the works” that changed the old ways of operating, but that the rise in ESG demands from areas like the finance sector was increasing demand for how companies communicate strategies.
“In the last few years ESG has come up to challenge businesses on their corporate agendas,” Haycock said. “There is also increasing evidence that consumers place a higher value on the expectation of sustainability and communications and labelling all play a role in exciting the consumers.
“All of us, as consumers, expect what we buy to come from an environment where it was made in the right conditions and for it to be fit for purpose and meet legislation around processes and disposal. We have to be continually communicating into our business and into our shareholders to influence and engage. The world develops and it gains more expectations on business and we need to reflect back into our business the importance of stepping up as the issues arise.”
Debenhams offers numerous sustainability and ethically-orientated products, including 100% organic teas from the English Tea Shop. By working with these types of companies, the retailer has developed strategies tailored to creating shared value.
However, Haycock was the one who noted that there is more than 140 packaging and product labels, and implored delegates to be selective in their approach. This sentiment was echoed by former Made-By consultant Jo Mourant.
Mourant is two months into her role as sustainability delivery manager for Kingfisher, and noted that consumers can be “bombarded” by labelling. Having previously suggested that sustainability professionals working for retailers should be more closely aligned with procurement departments in order to improve sustainability, Mourant again noted collaboration had a role to play.
Instead of using labelling as a means to separate themselves from the competition, the former Made-By consultant suggested that companies should collaborate to influence buying habits, as well as driving sustainability improvement across sectors.
“I think consumers don’t actually understand brand loyalty anymore,” Mourant said. “It’s a real challenge for brands, especially when selling sustainability and trying to get consumers to come back to your brand.
“We see businesses collaborating much more and it’s really important for driving actions for sustainability and industry also needs to work together to influence buying habits.”
All three of the aforementioned companies are collaborating on sustainability through involvement with the British Retail Consortium (BRC). The BRC recently outlined five drivers, challenges and opportunities facing sustainability professionals in the retail sector, and disruptive technology and business models was a prominent feature.
The world of retail is already changing, with more shoppers now using online deliveries. In fact, insight analysis from the British Retail Consortium (BRC) found that nearly 50% of appliances are no purchased online. Despite this, almost 80% of non-food item transactions take place in store, providing retailers with an opportunity to strengthen relationships with consumers.
Companies like Argos and H&M have already implemented various trade-in schemes for older products, while online retailers like eBay and Amazon are looking to create physical retail stores to account for booming demand.
However, the BRC’s head of environment Alice Ellison noted that while new technologies were “changing the game” for retailers, new business models and consumer interactions were a niche market that needed to be explored more.
“Smart products and the Internet of Things (IoT) will provide retailers with lots of information on how customers are using products. That will bring big changes and enable retailers to target customers,” Ellison said.
“But these models are still very much a niche approach to things. Retailers will continue to pilot new approaches but I feel we’re still a few years away from a mainstream approach to new business models. I think we’ll see more disrupters coming in and changing the game and internationally we’ll be feeling the impacts of climate change more and more, and that will make a shift amongst consumers.”
Ellison also suggested that legislation in this area – the biggest of which is arguably the EU’s Circular Economy Package – wouldn’t act as much of a driver for retailers to introduce new business models.
Despite the UK government exploring the potential of a deposit scheme for retailers, Ellison noted that retailers are usually “ahead of regulation” and would likely drive changes to the sector internally. She used the phase-out of microbeads from cosmetics as an example of retailers acting before policy was introduced.