September 24, 2020 — Published, Strategy
Faced with uncertainty, many companies are doing more with less. The same could be said of their customers as people put off buying what they already have and start to rethink what they really need. As purchasing becomes more considered, the retail landscape will be more competitive. In an upside-down world, the retail brands well placed to fight for share may be the ones that help customers buy less and waste less. While it seems counterintuitive, this approach can help brands have real conversations about sustainability, savings and fairness at a time when these topics have never been more important, or more aligned.
In addition to financial pressures, there are at least two other ‘burning platforms’ around food security and recycling. According to The Food Bank Hunger Report nearly four million people in Australia experience food insecurity each year, one quarter being children, yet data from the National Waste Report shows more than 5 million tonnes of food is wasted and three-quarters ends up as landfill, enough to fill 9,000 Olympic sized swimming pools. Meanwhile, Asia is reportedly responsible for more than 50% of global food waste.
Food subscription services can be positioned to help people waste less by supplying no more than they need. Commercially minded services also fulfil desires, providing people with no less than they want. Satisfying practical needs for convenience ‘For busy weeknights’ and the desire for social kudos, ‘Impress your guest,’ HelloFresh offers customisable weekly boxes.
Much of Australia’s recycling operations have culminated in mountains of waste being stockpiled with nowhere to go, Four Corners revealed in 2017. Revisiting the issue earlier this month, Four Corners reported that the global plastics industry has deflected attention by perpetuating the narrative of recycling, regardless of how effective it really is.
This is muddying the waters for brands that show good intentions by committing to recycling, but has created a chasm for brands to step in and make a real-world difference. Through broader support for a circular economy, retailers can help design waste and pollution out of processes. The first National Plastics Summit held in March attracted interest and pledges from major retailers across multiple sectors, including grocery, fast food and discount department stores.
Conventional commercial wisdom has encouraged endless upgrades. Now forward-thinking retailers are providing customers with skills and resources to repair, repurpose and resell. IKEA’s Buy Back service allows customers to bring back gently used furniture in exchange for store credit, to reduce the impact on landfill. Furniture is resold via its AS-IS department.
As part of its commitment ‘to make high-quality stuff that lasts for years and can be repaired, so you don’t have to buy more of it,’ Patagonia offers a Worn Wear repair program. There’s a Repair Hub at a number of stores, while other outlets are drop off points for Patagonia clothes and garments. Patagonia’s CEO Rose Marcario describes repair as a ‘radical act’ which flies in the face of fast fashion. In a similar vein, Nudie Jeans’ longstanding commitment to sustainability is evidenced by its in-store repairs service, as well as the integration of ‘pre-loved’ jeans into its standard ranges. If you hand over an old pair, they give you a 20% discount on a new pair too.
Brands can generate goodwill with customers and encourage loyalty with their generosity. Hyundai was quick off the mark to offer customers free extensions to warranties set to expire in March, helping those who may have had limited access to vehicle servicing during COVID-19 restrictions. While the move was followed by Mercedez-Benz, Volkswagen, Audi and Porsche, Hyundai was fast to act and reinforced its global brand of C A R E. This wasn’t just a one-off demonstration of care, but one of several initiatives, including ‘Pay per kilometre’ car insurance, which those commuting less would appreciate.
The popularity of subscription services has grown with about two-thirds of Australians holding at least one service, according to Zuora, which manages subscription platforms for businesses. The huge amounts of customer data they collect has traditionally been used to encourage more consumption. But the pandemic has turned the tide.
There’s an opportunity for brands to help people understand their consumption behaviour and make more informed choices to save money and the planet’s resources. By doing so, brands can help people get through hard times, live their values and help customers live theirs. As conversations about sustainability and savings align, more and more mainstream brands are turning a profit practicing the kind of counter-intuitive thinking that helps customers waste less and save more.
Article was first published on Inside Retail.