Round table: Retail – striving for sustainability
As torrential rain pounded Grove Park in Leicester, inside the Marriott Hotel a positive future for the retail sector in the East Midlands was being outlined by a panel of industry specialists.
This exclusive event drew retail and economic experts from the East Midlands and beyond – including representatives from household names such as Joules and Topps Tiles.
The first part of the discussion was centred around retail, and how the sector can meet the challenges faced by the rise of ecommerce.
A recent Barclays report, Is sustainability the new loyalty in retail and wholesale?, showed that most East Midlands shoppers want eco-friendly online deliveries, but 61% will not pay any extra for them.
The report also showed that retailers over-estimate how much consumers are willing to pay for ‘green deliveries’ by nearly three times.
Meanwhile, the survey said that some 88% of Midlands retailers are planning to invest in sustainable deliveries over the coming years to boost business growth and improve customer loyalty.
According to Karen Johnson, Barclays Corporate’s head of retail, “with change comes opportunity”. Retailers in the region have to try and understand the “buying behaviour” of 21st Century consumers, said Johnson.
She added: “Shoppers now want to see brand and retailer sustainability. This is not an option any longer – it’s a requirement.
“There are three principles which consumers now live by; cost, reliability and speed. If retailers can tick these off then they should thrive. There has been a sea change in generational attitudes with younger consumers not liking the stick approach – they prefer the carrot.
“An example of this includes ensuring transparency of supply chain. Sustainability is here to stay.”
Indeed, the Barclays report surveyed 2,001 UK adults and 518 senior retail decision makers across the UK and found that cost remains the top priority for consumers, followed by the speed and reliability of deliveries. However, when differentiating between retailers, consumers were more likely to choose businesses that offered ‘green’ options such as sustainable packaging and doorstep recycling schemes, where drivers take away unwanted boxes.
John Dargie, the finance boss at Market Harborough retailer Joules, said sustainability is at the core of his business.
He said: “The challenge is to bring all the strands associated with being a sustainable business together. We have to be authentic and communicate the facts to our customers, however.”
Keith Ross, head of mid corporate at Barclays in the East Midlands, agreed with this, and highlighted the East Midlands’ strong heritage in the textiles industry.
He said: “We have some people in the textiles industry around the table today and we know from our conversations with them that visibility of the supply chain is absolutely vital.”
Geoff Cross of Fashion-UK agreed, but added: “Different retailers have different perceptions of sustainability. A lot of the plastic used in packaging is to protect the garment. Do we want damaged garments thrown away?”
Karen Johnson agreed, added: “The challenge is bringing all these different people together to have a common purpose,” while Keith Ross called the situation a “dichotomy”.
A fresh perspective was given by Andrew Wilkinson of Topps Tiles. He said: “Over half of our customers are ‘middle men’, and they’re not at all interested in sustainability – only price.”
This was mirrored in the Barclays report, which found that nearly 66% of East Midlands consumers said they would not pay any more for greener deliveries, with 57% of 35-54-year-olds and 76% of over 55s expecting businesses to absorb the full costs.
On average, consumers said they would only be willing to pay an extra 1.8% for environmentally friendly deliveries, with only younger people saying they would be willing to pay more than 3%.
David Smith of the Sunday Times summed up the first half the discussion. He said: “The sustainability agenda is real, but we’re dealing with contradictory concerns. What retailers have had to do, without doubt, is prove their sustainability credentials in the face of consumer pressure.”
The second part of the round table discussion will be published next week
