Technology has a key role to play in helping retailers understand what a new generation of conscious consumers wants

Reuters/Kim Hong-Ji

Reuters/Kim Hong-Ji

Published Feb 16, 2022


By Ajay Lalu

It seems clear that the pandemic has accelerated many of the trends we have seen in business and society, among them environmental and sustainability concerns. In fact, it’s now clear that environmental issues, and sustainability more broadly, have reached a tipping point.

Whereas previously one could have argued that they were restricted to those with the money to indulge in the luxury of choice, now they are becoming factors in making purchasing decisions. Retailers need to be prepared, or risk sacrificing brand loyalty and, ultimately, business.

Research from the Boston Consulting Group indicates that 90% of consumers are equally or more concerned about environmental issues after the COVID-19 outbreak. Ninety-five percent believe they can act to reduce waste, tackle change, and protect wildlife and diversity. Just under a third (27-30%) say this belief in the impact their actions can make has grown as a result of the crisis.[1]

In the United Kingdom, 41% say that considerations relating to recycling and sustainable packaging influence their buying decisions. But here’s the jaw-dropping statistic: 70% of Britons are willing to pay a price premium of 5% for sustainable products.[2]

It’s hard to overestimate the importance of this—environmental concerns are now part of the decision-making process. Given the global focus on sustainability and particularly climate change, I have little doubt that this willingness to pay a premium will spread to other markets beyond Britain.

That has to change the way retailers and their producers look at the issue as well as how to inform their customers choices.

Getting real

So far, so good. But as with all of these kinds of initiative, turning good intentions into reality is not necessarily so easy—it certainly needs to be approached with care.

One pitfall is greenwashing. Research from the Chartered Institute of Marketing indicates what while 63% of customers would like to know more about brands’ sustainability plans, they remain sceptical about their truthfulness.[3]

One quite sees their point! In effect, this is what one might call a crisis of information. These conscious consumers are looking for information that is reliable, credible & independent and, of course, available at the point of decision-making which, in retail, is at the shelf or on the website.

Another important point to make is that, as members of the retail ecosystem, we should avoid the common pitfall of seeing these issues in isolation. Sustainability is a wider question than just packaging, or recycling, or torrents of plastic waste cascading into our oceans. We need to take a holistic approach, which will also include labour and social issues: Is child or forced labour being used to produce the product? Are natural resources being abused? How is the product moved across the supply chain?

One solution would be to create an ESG (environmental, social and governance) index that would encompass this holistic view and score each product accordingly. Such an index would of course be extremely vulnerable to the perils of the aforementioned greenwashing, so it would have to be created and maintained by a trusted third party—perhaps an NGO such as Greenpeace or WWF. One thing is certain, that trusted third party could never be a governmental agency given the growing lack of trust of such entities, especially in South Africa.

Tech to the rescue

There are many moving parts here, with plenty that could go wrong or be exploited. It will also generate a lot of data which will need processing. Technology has a key role to play in such a scenario. It is ideal for collating and processing all the data, and delivering it to the consumer at the right moment, probably via a mobile app. But it will also be invaluable in providing the means for tracking items across the supply chain via the Internet of Things.

Blockchain would be the perfect way to create a platform on which the data would be secure and immutable.

The environmental/ sustainability challenge is a global one, and it spans the entire ecosystem of every sector. We need to tackle it at that level, and technology provides us with the tools to do so. We just need an ecosystem and a commitment to use them.

[1] Shalini Unnikrishnan, Chris Biggs, and Nidhi Singh, “Sustainability Matters Now More Than Ever for Consumer Companies” (11 August 2020), available here

[2] Catherine Erdly, “Four trends that will shape retail in 2022”, Forbes (28 December 2021), available here

[3] “Half of UK marketers fear ‘greenwashing’ despite consumers wanting more insight into companies’ sustainability agendas”, The Chartered Institute of Marketing press release, available here

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