Values-based shopping has mandated a focus on more sustainable practices: retailers of the future go beyond regulatory requirement to differentiate through sustainable practices.
‘Sustainable fashion’ and ‘conscious consumers’ are by no means new concepts in fashion and retail. However, current consumer and market activity indicates that the fashion industry is at a tipping point: consumers pay more attention to the origin and environmental impacts of their clothing and other products than ever before. We anticipate this trend to grow quickly.
What does this mean for the future of retail? Conscious consumers are no longer exceptions but an increasing, sizeable segment. Adopting sustainable practices is no longer a topic to shy away from. We could envision a (very near) future when consumer purchase decisions will demand 100% traceability across the supply chain from design to product delivery to after-sale services.
The rise of the conscious consumer
Over the last decade, improved access to information and broader availability of goods and services has led to a consolidation of consumer power in advance of brands and companies. According to Deloitte’s power of consumers report, during this same period, consumers have learned to raise their expectations and demand more from retailers – across price, experience and convenience. The industry has responded with investment into improved experiences across the customer journey, cultural shifts toward consumer-first mindsets, and ‘everywhere commerce’ strategies that enable consumers to shop to their preferences.
More recently, however, the content of what consumers are demanding has shifted: consumers are much more attuned and sensitive to social issues. They want to consume differently as a result – not only to get the best price and experience, but also purchase in line with their values. In fact, Deloitte’s meaningful brands study found that 63% of consumers are willing to pay more for products where social impact values are demonstrated.
A plethora of consumer tools to purchase consciously
Consumers are actively seeking out information to make conscious decisions about what they buy and who they spend their money with – and this information is becoming more accessible than ever before. Social media dedicated to sustainable fashion has expanded dramatically in the last five years. Consumers can access a plethora of independent blogs, podcasts, apps, e.g. Think Dirty, Facebook, Instagram and Twitter accounts expressly aimed at informing conscious shopping practices and highlighting environmentally sustainable brands.
With greater information in hand, consumers vote with their wallets and tend to reward companies that offer corporate transparency, demonstrate sustainable practices and – in a nutshell – can be trusted to ‘do the right thing’.
The retail and fashion industry stepping up
The seismic shift of consumer demand toward sustainability is shaping the industry landscape in significant ways. According to Deloitte’s global blockchain survey, we are observing new brands emerge who are responding to consumers with reinvented business models, using recycled or recyclable materials and exploring how blockchain technology can both create supply chain transparency but also true circular economies.
At one stage, these entrants were taking lead from – for instance – Patagonia Inc. who has continually explored new ways to apply sustainable practices and influenced the industry benchmark. However, Patagonia is now just one among a rapidly growing cohort of sustainability focused retailers who have recognised that embracing the conscious consumer and is not only a means to drive positive impact on society, but also to achieve business success. Therefore, those who do not embrace the concept of the conscious consumer and shopper are at risk of losing significant market share, but also increasing pressure from regulators.
Regulatory pressure is also rising
The imminent introduction of the Modern Slavery Act 2018 may have profound implications for retail and consumer industries, not only in the way their workforce is structured and managed, but also in the way their entire supply chain is formed and managed. The focus on conscious consumers is not just about doing the right thing within the boundaries of our own organisation but also with our entire network of suppliers, business partners and organisations that are part of our supply chain. The ability to understand, audit and address conduct issues across the entire supply chain is a must-have to keep conscious consumers’ trust, and also just to be compliant.
Harriet Thayer, Yann Pastor, and Vanessa Matthijssen specialise in strategy and transformation in the consumer and retail industry at Monitor Deloitte Australia. Monitor Deloitte combines deep industry insights with cutting edge methods to help leaders navigate the future with confidence. Learn more about Monitor Deloitte Australia at https://goo.gl/6xWzA7