Price and performance dominant factors for sustainable products, says Kingfisher
EXCLUSIVE: Companies that "plaster their products with 'eco'" are unlikely to make the same connection with consumers, compared with those creating sustainable products that offer other tangible benefits such as better price and enhanced performance.
That is the view of Kingfisher’s head of sustainability Caroline Laurie who believes that an ongoing “unification progress” between the DIY retailer's procurement and research departments is allowing the firm to develop enhanced sustainable products that cater to consumer’s price and durability demands, as well as delivering on associated environmental pledges.
Speaking exclusively to edie ahead of her appearance at the Responsible Retail Conference (scroll down for details), Laurie revealed that a growth in revenue arising from sustainable products, combined with a vocal new chief executive actively pushing the sustainability agenda, has seen Kingfisher translate “complex” sustainability and climate issues into “meaningful language and action” for its customers.
“This isn’t about a large sustainability team delivering on projects,” Laurie said. “It’s about a team of sustainability experts who translate complex sustainability issues and targets into meaningful language and meaningful action.
“You’ve got to make the communication relevant to customers. We feel that the product has to be at the right price, do the right job, offer great benefits for customers, and then, if it’s also sustainable it will absolutely fly. We can translate macro-challenges around climate change into meaningful targets and actions and turn to innovative solutions to aid with this.
“Trying to sell products just because their sustainable, and not highlighting the other benefits, won’t fly with customers. But often a sustainability benefit can be translated to customers in a very meaningful and tangible way.”
While some companies are going down the route of “selling sustainability”, Kingfisher is aiming to sell products that improve homes at competitive prices. Laurie noted that this method had built up a trusting customer base who look to Kingfisher brands such as B&Q and Screwfix for their performance and price, with environmental performances acting as a company value of “doing the right” thing rather than a selling point.
Kingfisher’s latest sustainability report highlighted that this method was paying dividends. The report revealed that 28% of Kingfisher revenue – which climbs to 37% when solely looking at B&Q – was driven from sustainable products. With a 50% target established for 2020, Laurie believes that the way the company promotes products to customers will enable it to continue to grow revenue through sustainability.
“I’m very proud and passionate that we want half of our products to be what we call sustainable home products by 2020,” Laurie added. “This isn’t about listing niche green products, this is about listing products that sell in volume and the 50% target for 2020 is a very bullish goal.
“Do I think customers will buy [Castorama's] 'NODS decking' because it’s made from recyclable material? No. Do I think they’ll buy it because it’s more durable, lasts longer, is cheaper to clean and is cheaper than the alternative? Yes, they absolutely will.
“Currently, 96% of products sold by Kingfisher’s retail brands throughout Europe containing wood and paper are sustainably certified. At B&Q they’ve already got that to 100%. Customers aren’t coming in asking for certified timber, but they expect us to do the right thing and would be disappointed if we weren’t. At that point you’ve got to make choices about doing the right thing for the customers but also make sure you repay the trust they have in the brand.”
In order to drive the 50% target, Laurie feels that innovation is key. Alongside the NODS decking - which is at least 25% cheaper than alternative decking and has generated £2.9bn for Kingfisher - the company has introduced “green alternatives” to white spirit and toilets with lower flush rates than the industry average.
The company also sells 748 products with closed-loop credentials and are closing in on a 2020 target to have 1,000 products operating under a circular economy model. For Laurie, the uptake and enhancement of sustainable and closed-loop products could accelerate over the next few years as part of the unifying process of the company’s net-positive evolution.
In the early months of 2016, edie reported that two high-profile sustainability directors had left the company as part of a radical restructuring of the group's management team to integrate CSR into the core of the business. Despite the shake-up, Laurie insisted the company is still looking forward with its visions and targets, driven by the vocal new chief executive.
Having spent 13 years at Kingfisher, as chief executive of the Castorama brand in France and the group commercial director of B&Q, new chief executive Véronique Laury has made some “very public commitments around Kingfisher being a truly sustainable company”. Laury is now overseeing an internal business-model overhaul that looks to align innovation across various product ranges as a means to “draw from best practice”. This will allow Kingfisher to take the best examples from certain brand product ranges and expand them across its portfolio and departments.
With Laury at the helm, Laurie believes that Kingfisher will start applying a “long lense” to future trends that encapsulate Kingfisher’s role as a responsible business in line with megatrends listed under the Sustainable Development Goals (SDGs).
“We are currently reviewing our 53 targets and strategies," Laurie said. "The SDGs and are continuing to map against these goals and we'll use them as a benchmark to make sure we’re covering all aspects of sustainability across our plans.
“It’s something we’re looking at and considering as part of our development. Our current milestones only run up to the end of this year, and our current targets end in 2020 so we need to start looking to extend and enhance on those targets, and the SDGs are part of the input of that process. We’re seeing it already with our suppliers and our peers.”
While Kingfisher is looking to the horizon to shape its operations, Laurie noted that work was still ongoing in order to get its “own house in order”. Kingfisher has championed sustainable products – an aspect which ex-director of sustainability and innovation Dax Lovegrove believes is vital for future success – but the company has been struggling somewhat with certain environmental impacts.
The latest sustainability report reveals that Kingfisher's energy intensity had fallen by 15% against a 2010 baseline, but notes that “considerable work” will be needed to reach 2020 targets for year-on-year energy use. Emissions increased by 4% year-on-year due to increased fuel consumption, business growth has also seen water use increase by 15% compared to 2010 and waste generated grows 1.5% year-on-year.
Laurie admits that there is still a way to go to reach 2020 targets, but that an increase in footprints due to business growth doesn’t mean that the company doesn’t “breathe [sustainability] within its operations”. “To be credible in this agenda you have to get your own house in order,” Laurie adds.
“That’s not to say we’ve managed to do it all, but the focus is still there. We’re currently investing £50m into solar PV, they’ve just put panels of Screwfix’s head office, so you can see us making progress in this space, but we still have a way to go.”
Caroline Laurie at edie's Responsible Retail Conference
Kingfisher's head of sustainability Caroline Laurie is one of the expert speakers at edie's upcoming Responsible Retail Conference.
Taking place on 21 September in London, the edie Responsible Retail Conference equips retailers, government representatives, sustainability professionals and key stakeholders with the tools they need to achieve more efficient resource use and improve brand reputation in the process.