Navigating Sustainable Retail With Customer Data
The New Sustainable Retail Landscape
The popularity of sustainable consumption is accelerating, with Generation Z firmly in the driver’s seat as “the Sustainability Generation.” In 2021, Accenture found that while 62% of all consumers attached higher value to purpose-led brands, Gen Z’ers are embracing the sustainable retail revolution faster than any other group. According to Deloitte, 45% of Gen Z will boycott brands because of ethical or sustainable concerns; Gen Z’ers are also willing to pay more for sustainable products. It’s clear that sustainable and ethical behavior can directly affect business performance—so how can retailers keep up?
The Challenge of Making the Right Decision
Navigating sustainable retail trends is not simple, and doing so inherently involves a large degree of risk. For example, when H&M rolled out its Conscious Collection, the brand couldn’t drastically hike prices as this would risk abandoning their established reputation for affordability. This raises the challenge: how can a brand integrate growing demand for ethical and sustainable consumption with its traditional messaging and characteristics?
Retailers like H&M are at a decisive moment, and must get messaging on issues such as social justice and environmental sustainability right. Unfortunately, the answer can’t be found by looking to the past due to the unique and evolving consumer habits shown by the new generations of retail shoppers. In addition, COVID-19 had a significant impact on sustainable lifestyles and decision making in general.
Getting Sustainable Retail Right
Recent research conducted by Treasure Data surveyed C-suite members across multiple sectors, including retail. The research found that 57% of these executives now spend more time deliberating over business-critical decisions. Unfortunately, a majority see no improvement in decision-making effectiveness. More than half of the C-suite (56%) worry about making the wrong decisions entirely. The fear of messing up (FOMU) is profound, but there is also a solution… understanding the customer.
Retailers need to know how their customers align with specific issues, who they are influenced by, and what they care about, in order to offer fresh and socially aware brand messaging. For example, how does your customer base defines sustainability? Are they concerned with sourcing and ethical work practices, e.g., how something is grown and harvested? Do they want to see a reduction in single-use plastic use in your packaging? What about your overall carbon footprint? This type of nuanced information can be key to presenting real-time personalization and driving loyalty and growth.
Effective utilization of first-party customer data is the key to keeping up with the sustainable retail revolution. With this data, and enabled by access to the right tools, retailers can more easily adapt to changing consumer behavior. In addition, retailers can use deep insights from the data to understand which marketing strategies will play well with their target audience, without compromising their existing brand values. In other words, understanding what really matters to consumers and acting accordingly allows brands to pursue both meaningful and cost-effective decision making.
Want to know more about how cloud-based data solutions can enable your business to meet the challenges of sustainable decision making? Download our “Better Decisions in the Age of Unpredictability” report here, and discover how you can unlock data insights to understand your customers.