Sustainability in Retail: key innovator trends
The focus on sustainability goals for retailers and brands is evolving towards a long-term perspective. There is now an emphasis on regenerative business models rather than simply reducing environmental damage. This shift transforms innovators' mindsets to create a symbiotic innovation model benefiting nature, society, and the economy. This article provides practical context, identifies problem solvers, highlights the priorities of retailers and brands and gives three key takeaways to bring it all together!
Consumers are struggling with rising costs of living and likewise businesses with inflation throughout their supply chains. One of the biggest challenges facing commerce is that sustainability agendas face the risk of being overshadowed by economic headwinds.
Firstly, examining consumer behaviour, it becomes apparent that sustainability means different things to different people. Consumers tend to prioritise issues that directly impact their lives, such as pollution in their local area or droughts in specific regions.
We hear increasingly more about 'The Value-Action Gap' – the difference between people’s stated values and beliefs and their actions. While 97% of people say they want to live a sustainable lifestyle, only 13% are actively changing their behaviour (Sustainability Sector Index 2022 report). Most feel a sense of responsibility but also believe that the government (and businesses) should play a more significant role in driving sustainable change.
According to Kantar data, while the overarching trends under the sustainability umbrella such as veganism, conscious packaging, free-from, animal testing, pesticides, GMO, air, water pollution, etc. remain mainstream, Kantar noticed the emergence of new topics that are likely to disrupt and these are laid out below (Finding the Future: Sustainability Trends)
Despite the challenging economic conditions, it is essential for businesses to remain committed to their sustainability goals. Furthermore, by effectively executing sustainable plans, businesses can develop more resilient supply chains, create loyal customers, and increase revenues. It's not easy and leveraging the latest innovations can play a huge part to get there quicker. And that’s where we step in, GrowthBuilders use our expertise to curate sustainability innovators that are pressing for more rapid change and results.
Our GrowthBuilders Editions serve as a platform for hand-picked top-tier, later stage tech scale-ups to showcase their products to a targeted network of progressive corporates. We speed up collaboration, co-creation and partnerships by selecting only the very best product-ready scale-ups, saving corporates time and cost whilst increasing ROI through quality. This drives business transformation and industry innovation around pre-identified industry challenges.
Kantar's iLab enthusiastically joined forces with us to support this Edition, sharing our commitment to driving positive change, promoting diversity and inclusion in the innovation ecosystem, enhancing collaboration, and empowering innovators to achieve scalability.
Uncovering the right challenge to solve
GrowthBuilders engaged corporate innovation and sustainability leaders from large brands and retailers to deep dive into their sustainability agenda. Concurrently, we rapidly scanned & analysed the market for sustainability-focused technology solutions, specifically targeting brands and retailers. This exercise does two things; 1) aligns corporate goals to innovators and 2) unearths important areas that are yet to cross the corporate radar but are of significant interest and importance when it comes to pushing the sustainability goals.
Our robust evaluation process brings solutions that address real use cases and identified problem statements as well as sprinkling in some horizon scan technologies. The key challenges brought to the surface included data collection, communicating that information to consumers and regulators, delivery and returns, and regenerative business models.
So, after sifting through 1,000+ innovators, we curated 8 non-competing scale-ups that are making waves. Over a period of five weeks, we provided the platform for the scale-ups to get their solution in front of our corporate network to drive collaborative change whilst they also benefited from a specialised B2B workshops aimed at enhancing their scalability, value proposition, and sales strategies.
What problems are in focus and who is solving what?
The cohort of innovators was made up of scale-ups from the US, Singapore, UK, Germany, Australia, and Denmark, curated to cover different sustainability challenges across a brand/retailer’s value chain. We looked at upstream aspects of the value chain such as procurement, sustainable materials (check out our 2021 alumni Material Exchange if you're interested in material sourcing), manufacturing and energy but given we were offering only eight places, we focused on ‘downstream’ which typically, but not exclusively, touches the end customer.
Here are our exciting solutions (drum-roll):
Impact measurement 📐 - Assessing product environmental impact is a big challenge due to complex supplier networks and difficulties with data collection. This information is important for both customers and brands. Brands need to be compliant with new regulations (eg: EU's Sustainable Products Directive) and customers are demanding more transparency and are more conscious of greenwashing. Brands can’t fix what they can’t measure, so measurement helps drive a transparent decarbonisation strategy and new product developments, so we selected Yook which analyses product environmental impacts. (Over the last couple of years GrowthBuilders has worked with other innovators such as Compare Ethics and Dayrize - check them out if you’re interested.)
Regeneration 🌳 - Often the focus with sustainability is reducing negative impact (carbon footprint) but we were keen to bring on a solution that focuses on positive impacts - enter Handprint. They have curated and digitalised the best impact projects across the world and connect them to businesses who can contribute to these projects. And our other scale-up on this Edition, EcoTree, offers verified carbon removals and initiatives to enhance biodiversity (reforestation).
Data & Reporting 📊 - ESG data is siloed and fragmented so a solution that can bring all of the core information to one place is key. From there, businesses can effectively measure footprint, set goals, report and ensure compliance. Brightest offers a sustainability management software that can do all of the above, helping drive sustainable business transformation.
Delivery 🚚 - Demand for last-mile parcel deliveries are estimated to increase by 78% globally by 2030. Tarot Analytics is a Route Optimisation and Delivery Management platform helps brands reduce cost and also emissions, cutting around 30% of journey times.
Returns 📦 - Returns are a massive issue, especially for Fashion. We selected two very different solutions addressing this. ZigZag Global, who explain “41% of all shoppers buy multiple items with the intention to return at least one”, so they reduce the impact post purchase through data insights (ie: what is being returned) and reducing products to landfill by enabling ‘take back’, recycling and resale of goods in local markets. Dream Agility takes a different approach, a MarTech solution that helps reduce returns pre-purchase. Dream Agility has identified that 20% of repeat customers return 100% of their order basket. Dream Agility can identify these high returners so you don’t pay for ads that target them.
Artificial Intelligence 🤖 - AI scale-up, Fligoo, a sector agnostic solution can accurately forecast demand to a postcode level. This insight supports better supply chain management, reducing strain and waste. Their AI is also used for new product development - with successful client case studies of testing demand for sustainable products and assessing sustainable attributes eg: packaging and ingredients/materials.
Where is the most interest from big brands?
A total of 104 executives engaged with our Edition across Brands, including Consumer Packaged Goods firms such as Kraft Heinz and Fashion Brands like Burberry, Retailers like Asda, Lidl, Selfridges, YNAP and more. Investors and Ecosystem players were also engaged, such as KPMG and TCS.
The most popular category was impact measurement, based on the overall introductions requested. This isn't too surprising given there are strong demand factors both from customers (customers want to know what products are sustainable) and also from Governments (eg: new regulations). This is backed up by Kantar's research report that found that 57% of consumers “feel that it is really hard to tell which products are good or bad for the environment”.
The second most popular area was in returns and this again may not come as a surprise. There is a clear link to cost reduction and improving your sustainability impact if returns are better managed. This is consistent with the aforementioned economic pressures and doing good balance, if both can be addressed then it really is a win-win.
Engagement from the GrowthBuilders Edition.
If we can give you some key points to take away
A good sustainability plan can result in wide reaching benefits for your business. So, we suggest three initial actions for corporates:
1. Re-think where to play.
Strategically identify where to play based on topics that are of interest to your consumer. In the world of Consumer Markets this means what topics are the best fit for your brand considering how consumer preferences can change by category and geographic presence. If you aren’t sure, then just ask GrowthBuilders 😊
2. Innovate with purpose.
Move from ambition to successful brand action. With the lack of accessible solutions being one of the key reasons for the Value-Action gap, sustainability-led innovation is a pivotal step toward the needed transformation. This highlights the need to be engaging with the innovator market and being open to co-creating solutions with them - it’s more cost and time effective! Don’t let a lack of time and resources be the issue for not finding the right solution, we can help you in the blink of an eye - just say the word!
3. You can do good AND benefit economically.
Scale-up innovators know that this is what big brands need to hear, they are not relying on CSR budgets to engage with you, they are doing good for the environment whilst putting money back in your pockets and the clearer that can be and the quicker the impact defined, the easier you can work together.
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Find out more about Kantar’s iLab HERE