Do consumers really want sustainability in retail?

Sustainability has become a buzzword for brands and customers alike, with everyday shoppers doing their best to make sustainable purchasing decisions while companies take action to reduce their environmental impact.

At first glance, it may seem like everyone believes they are working towards being more environmentally responsible. The thing is, what consumers (and companies) are saying about sustainability doesn't always add up.

Many customers are holding companies to higher standards and choosing sustainable retailers over ones who aren't actively pursuing eco-friendly practices. But the majority of shopping behavior begs to differ. As it turns out, there's a big gap between what consumers are saying about sustainability and what they are doing in practice.

Is there a cause for the discrepancy between thoughts and behavior at the consumer level? Can retailers keep their customers happy while also providing more sustainable shopping options?

In this post, we're going to take a quick dive into consumer demand, behavior, and where sustainability falls into the mix.

Sustainability in retail: By the numbers

What consumers are saying about sustainability

Consumers are showing a preference (and expectation) for retail companies to engage in social and environmental responsibility. What do they want to see? Tangible practices like energy efficiency in fleets and recyclable packaging to creating more sustainable products.

• Sustainable products are more than just trendy. Global research shows a whopping 71% rise in the popularity of searches for sustainable goods from 2016 through 2020. Plus, based on a study by McKinsey & Co, 67% of consumers consider sustainability an important factor when purchasing products.
• Consumers want to see retailers investing in sustainability - or else. Over 60% of consumers expect brands to have sustainability practices in place, while almost 50% percent would discontinue their shopping at brands that don't hold true to these values. It's clear that more sustainable brands have a wider reach, and they're keeping their customers happy.
• Buying behavior is changing, and retailers need to keep up. Studies show that over the past five years, 85% of global consumers have shifted their purchase behavior towards being more sustainable. At this point, if a brand is ignoring potential sustainability initiatives, they're falling behind.
• There's a new sustainable sheriff in town (hello, Gen Z!) A report by First Insight found that 73% of Gen Zers were willing to pay more for sustainable products. Plus, they aren't afraid to get their friends and family on the bandwagon, as well as share their opinions via social media.

What consumer behavior is saying about sustainability

Practicing sustainable behaviors is difficult, especially when the retail industry doesn't set consumers up for success. With many customers wanting to see change and be a part of a larger sustainability initiative, their actions aren't always aligning.

• Returns have become an expectation for customers shopping online. With the customer experience taking the forefront in e-commerce, consumers expect a seamless journey, from product research to purchase to return. Did you know that 30% of all products ordered online are returned? These returns add up to a huge amount of carbon emissions.
• Fast fashion is one of the highest-grossing verticals of retail. Fast fashion is all about what's trending. A style that's "in" one month could be out the next, leaving more and more discarded textiles in landfills each year. But this doesn't negate its allure; The fast fashion industry is expected to grow from $91.23 billion in 2021 to $99.23 billion in 2022.
• Customers want speedy deliveries, so much so that they're willing to pay more for it. Two-day shipping has become the unspoken standard in e-commerce. With Amazon Prime ruling the scene of fast delivery, customers are becoming more and more expectant of it elsewhere. The biggest proponents of expedited shipping? Millennials and Gen Z are three times more likely to pay an additional fee for a quick delivery compared to older age groups.
• Consumers want more sustainable products but aren't purchasing them. What's the deal? A study by Nielsen found a gap between the percentage of customers who want eco-friendly products (26%) vs. those who actually purchase them coming in only at 10%. The cause could be that customers aren't seeing enough sustainable options offered by their favorite brands in the retail sector, or that they are being put off by the cost.

The disconnect:

It's clear that consumers want to be more eco-friendly and have sustainable retail options available to them. But they may be having some trouble acting upon their behavior. Why? The retail industry was not built with sustainability in mind.

Scenario 1:

A customer orders a small item, say, a pair of sunglasses. However, when the sunglasses arrive, they come in a 10-inch box, within a 12-inch box, stuffed to the brim with bubble wrap. When the customer finally gets to their sunglasses, they're in single-use plastic packaging. Suddenly, what was just one small item becomes a perfect recipe for excessive packaging and waste.

What's wrong with this picture? Well, for one, the brand could be using recycled materials for packaging. The consumer also has no say in how their package was delivered and put together. If there was some sort of option that included paying a small price for sustainable packaging, the consumer could take control of their experience while reducing their carbon footprint.

Scenario 2:

A customer makes their way to the check-out page and sees a few different shipping options. Same-day shipping is offered at no extra charge! That feels like a no-brainer, so this method is selected right away. Faster = better, right? In terms of sustainability, not quite.

Brands may be offering quick shipping methods to appease their customers. But without offering carbon neutral options to make up for the amount of energy spent on fast delivery, they're not actively reducing their environmental impact. Plus, customers might not realize the positive impact of waiting just a day or two more for delivery.

What's the solution?

Companies are being more vocal about sustainability: is that enough?

The short answer? No.

Not only do consumers want to see more sustainability efforts. They also need help with how to participate. Companies should be providing viable opportunities for customers to save energy and reduce their carbon footprint in addition to their sustainable business initiatives.

What does this look like for retail companies?

• Educate customers within the checkout process - be completely transparent about the different options and their environmental impact.
• Include a "green button" that allows more consumers to make eco-friendly choices, such as waiting longer to ensure their products are shipped in a way that saves the most energy.
• If a customer is ordering multiple products, provide an option to group packages together for fewer trips and less packaging. While it may take longer to arrive at their doorstep, it will reduce the environmental impact of shipping.

For customers to actively participate in a company's sustainability strategy, they'll need action items provided along their shopping journey. Having the chance to make educated decisions will empower customers to choose their own path and come back again and again.

Developing a more sustainable business: 4 tips for success

1. Offer a carbon-neutral checkout

While it may never be feasible to completely eliminate the retail carbon footprint, there are ways to offset a negative impact. Retailers can partner with brands like EcoCart to calculate emissions created from the order and provide various donation options to fund certified carbon offset projects.

The results? A quick and easy option for customers to make their purchases carbon neutral before the order is even shipped.

2. Use sustainable packaging

Sourcing sustainable packaging from a brand like noissue, for example, is an incredibly effective (and easy!) eco-friendly practice. Instead of using plastic packaging, try a compostable mailer that will break down in a home or commercial compost or eco-friendly tissue paper rather than bubble wrap. Once your sustainable materials are in the hands of your e-commerce fulfillment provider, you won't have to think twice about it!

3. Partner with energy-efficient fleets

Partnering with a 3PL who operates with SmartWay certified fleets can help reduce a brand's carbon footprint. How? SmartWay requires its partners to adhere to strict guidelines concerning fuel efficiency and the transportation of goods as well as the toll the freight industry takes on air quality.

4. Re-think your returns strategy

Unfortunately, returns are inevitable in e-commerce. But not all hope is lost. Something that all companies can do to reduce their returns is to get to the root of the problem. Why are your customers returning their purchases? Is the product damaged? Is the sizing an issue? Is your product imagery not up to scratch?

• If products are damaged, your 3PL partner can create a workflow that audits your inventory to make sure any affected products are being pulled from the shelves.
• If your customers aren't happy with the colors, are the product images realistic? Can you create a more cohesive experience from browsing to unboxing?
• If your sizing is a bit off, you can include a note on your site such as "true to size" or "runs small" while letting customer reviews provide some insight into your sizing chart.

Popular apparel brand Urban Outfitters provides online shoppers with a quick overview of reviews, including a sizing review that lets them know how the product fits: "true to size," "runs small," or "runs large."

What does a more eco-friendly sector look like?

It's clear that consumers are saying they want to support sustainability in retail... so why don't the numbers add up?

In an age of instant gratification, where the customer experience rules all, it's easy for shoppers in-store and online alike to overlook the negative impact that their shopping behaviors can have. When free 2-day shipping is the first option presented at check-out, or 'free returns' is on every product page, this sets up certain standards of behavior that consumers often follow.

The real question is, how can retailers meet consumer demand while also developing a shopping journey that encourages education and action around climate change?

Spoiler alert: it's not easy, but it can be done with carbon neutral options, eco-conscious tips along the buying journey, and sustainable practices like recycled packaging, electric vehicles, and a more holistic approach to sustainability in retail.