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Report: Product-Led Sustainability In Retail

Publisched on
January 13, 2022



Retailers benefit both from their own sustainability efforts and those of the merchandise partners they buy from, turning positive social and environmental impact into brand value. As consumer education around climate science and the impact of the products they use grows, shoppers are increasingly favoring retailers with sustainable offerings over those whose products and business models are more harmful to the environment, or who fail to take climate action and set sustainability goals. Brands and retailers are meeting this behavioral shift by embracing sustainable business practices across every element of the product journey, finding that their positive impact can drive efficiencies and secure long-term value and customer loyalty. 

Taking a holistic approach to environmentally friendly practices has quickly become the new business standard, as consumers, government regulators, and sustainability experts alike call for more operational transparency and accountability. Many brand manufacturers are rethinking and retooling their supply chain and manufacturing processes to be more efficient in terms of sourcing and production waste, as well as taking a hard look at their overall impact on natural resources. Alongside this, businesses are making the informed decision to review their product development pipeline and consider alternative natural materials and designs that enable easier repair, recycling, or upcycling of core components to keep them in use and out of landfills.

Leading organizations see environmental initiatives as a compelling competitive advantage, a view which is mirrored and reinforced by shopper behaviors, and companies are embracing eco-friendly initiatives as opportunities to create better products, streamline their operations, and deliver value at every stage. The way a company sets its material sourcing strategy and the level of transparency in its product supply chain can influence supplier behaviors such as reducing carbon emissions, using renewable energy and clean energy, or halting exploitation of cheap or even slave labor. This approach requires long term planning, better cross-departmental and partner communication and a shift in systematic thinking to replace the linear way that products have traditionally been conceived, produced, and disposed of. 

The emergent circular operational approach views both the product and the customer relationship as a continuous lifecycle with shared responsibility throughout. Practically speaking, this translates into companies using education to help their customers and suppliers adopt better behaviors and take incremental actions to achieve larger collective results, along with finding innovative ways to keep both products and their packaging in circulation longer to reverse the effects of yesteryears’ disposal culture. 

From source to sale and beyond, a diverse range of companies across sectors are prioritizing product-based sustainability efforts to unlock new opportunities and drive competitive differentiation through a strengthened relationship with both their customers and the planet. To help our members better understand this increasingly complex and important space, the PSFK research team has identified six key trends behind innovations in sustainable retail, bringing them to life with recent examples from the marketplace. 



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