Supply and demand
The global economy consumes 1.7x the world's natural resources annually....
Many brands have had to redefine their purpose and get clear on their offering to understand what makes them stand out or sometimes simply return to founding principles.
In a fast-moving market laden with ongoing instability, brands and retailers must crystallise what they want to be known for so that customers know what they stand for. Doing this will put them in good stead with consumers who are increasingly principled and committed to aligning their purpose with retail experiences and purchases.
Brexit has also impacted the UK retail landscape, with brands having to navigate new regulations and restrictions when importing and exporting goods. This has led to an increased focus on supporting local businesses, with brands promoting their commitment to sourcing locally and supporting the UK economy.
While some businesses flailed around navigating these waves of economic turmoil and uncertainty, returning to their internal company culture and instilling a sense of value has been vital for providing stability and security. As a result, it's now essential for retail businesses to invest time in understanding whether their actions are consistent with their purpose.
There is a sense of focusing less on top-line profitability and more on realigning with consumer needs to remain relevant within an ever-changing industry.
Retailers may fear what this means in practice. Instead, they'll need to embrace innovation and consider how to ride the waves of change to think optimistically (albeit strategically) and draw up realistic long-term plans and objectives.
With today's young customers set to become tomorrow's core customers, brands are still trying to figure out what to incorporate into their strategies to adapt. By analysing collected data, brands can look beyond their industry and sector to determine what trends and challenges will arise for their consumers – which should indicate how to overcome these and inform their marketing messaging.
Mark Saunders says: "We went through the process of redefining our purpose and questioning what makes us great. We want to be known for being passionate about parenting – in all its shapes and forms and provide new parents with the best products, experiences and services. We're now in the rollout stage and have retrained our teams to be passionate, knowledgeable and caring, but it's been a real journey, and sometimes SMEs can be too focused on solely making money."
He advises businesses to strip back on their intentions and get clear on their why. Instilling a sense of purpose will help companies stay within their core values.
As well as building an internal culture around purpose, brands also need to take note of the external feedback they receive and listen to their customers. There are many ways to ask customers to share their opinions – whether through polls, incentivised surveys or competitions; online engagement is not difficult to coordinate, and consumers are more willing to share thoughts if there is a beneficial value exchange on offer. This information could lead to suggestions around improving services or repositioning the brand's offering, which is invaluable and useful. And conducting it non-threatening ensures room for feedback before things escalate to the point of criticism.
Prioritising a customer's service and experience is also vital in a purpose-filled world. Customers enjoy speaking to a human and not a scripted bot, so brands that are aware of fundamental consumer pain points can work to avoid issues before they crop up and, ideally, have a human in place to deal with them when they inevitably do.
Consumers are the driving force of any business, and as customer experiences and expectations change, brands must keep up. Today's consumer is a lot more critical of plastic usage and over-packaging, so brands have to bear this in mind and explore alternatives such as recyclable packaging to remain favourable.
Naturally, with the prioritisation of customer preferences, brands have had to question whether their sustainability initiatives and considerations match what consumers want.
Sustainability means different things to different people, so retailers need to engage in sustainability for the right reasons rather than with the sole intention of making money. Brands can create a roadmap to ensure they hit their target sustainability goals so that they can be transparent about their plans and keep consumers updated on their progress. The caveat is that they must follow through – otherwise, efforts will be ignored.
There are many activities brands can do to behave more sustainably – whether it's simply encouraging a less disposable mindset among consumers, providing resale platforms or working with in-house suppliers, repurposing teams or local sources. They can also pair up with sustainable partners or charities to arrange targeted activities such as beach cleans to activate intention. Of course, action is a non-linear path, but taking steps in the right direction will help consumers decide whether they are aligned with what the brand stands for.
Younger audiences push sustainability initiatives and pressure retailers to act more sustainably while acting more vocally on social media about inauthentic brand behaviour and culture. Yet it is a problematic trade-off for retailers because embedding a more sustainable work ethic and practice makes products and services more expensive, which makes it challenging to keep items affordable and accessible for average consumers - particularly in a cost of living crisis.
"Everyone has a responsibility to consider the environment," says Manju Malhotra, CEO of Harvey Nichols. "The fashion industry is particularly influential, and more can always be done. We want customers to buy more selectively but better, to trade high street labels with high-end designers and adopt a less disposable mindset. We've partnered with an on-flaunt resale platform that connects 25 different marketplaces, providing a wide pool where items can be sold and offering 15% HN vouchers with every sale."
Brands with wider product ranges and collection lines will need help to go fully sustainable. Yet, customers are increasingly demanding this but are not necessarily wanting to pay for it.
There needs to be more clarity around carbon metrics and knowing how to measure sustainable ROI in a quantifiable way. Not only do the measures change so often, but more education around sustainable practices is needed from retailers. Of course, there will always be a trade-off between ESG and the cost implication of production. Still, it's a start if retailers focus on creating products with lasting value and strive to use more environmentally friendly resources.
The other issue is that sustainability changes regionally, so implementing a uniform approach that's applicable internationally is near impossible. "It can feel like a monster of a job to do," says Sarah Welsh. "But we all have our part to play. We've joined up with numerous partners – like Superdry and Simon from Asos – to better understand what we can do to create achievable, sustainable goals. We want to make a difference that's tangible."
Brands need to realise that small steps make a big difference, and they need to represent their targeted audience.
The growth and reclassification of purpose can result in monetary gain for retailers. But brands need to think more creatively and non-laterally about how they can stand out and win their consumers' hearts to provide something useful that's of service rather than just going hard and fast to make ends meet.
Recent changes to the UK retail landscape, including but not limited to rising shipping and labour costs across Europe and China, have made manufacturing costs in the UK a cheaper and more appealing option – and keeps product journeys down. Consumers are also becoming increasingly interested in the manufacturing process to understand it and can gauge product quality.
Embedding purpose in-house can be a tricky balance, and knowing what opportunities are available may require bringing specific experts or relevant partners on board. They may reinterpret the brand mission in a new way and strengthen the elevation of the company's values through collaboration, which is why selecting relevant partners suited to the broader vision is crucial. In addition, working with partners in this way can help to future-proof the business as change is navigated.
"Creating value creates value for investors," says Peter Wood. "Purpose may seem like a big gamble, but it's guided by what we do and how. So what comes out the end is inevitably valuable to the shareholder."
The road to embedding purpose in company culture and consumer behaviour is ever-changing; it can be tempting to want to try everything before fully mapping out how to do so in a manageable way.
The pandemic led to a shift in consumer behaviour, with more people shopping online and seeking brands aligning with their values. This only increased the importance of purpose-driven advertising. Brands promoting their social or environmental values are working harder to attract customers, as those prioritising sustainability or social justice issues resonate much more with consumers seeking brand expertise.
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