The Rise of Green Retail in Australia and Its Impact
As the world wakes up to the importance of sustainability, Australian brands are increasingly looking to integrate environmental, social, and governance (ESG) criteria into their operations.
Brands are being driven towards ESG by more than altruistic sentiment. Consumer shopping habits and buying decisions are increasingly being oriented toward purpose as opposed to being driven by price. They want to access information on where products are being made, under what conditions, and the brand's perspective on social and environmental issues.
Thus, by taking a stand on environmental and social issues, brands can build stronger relationships with customers, reduce costs, and decrease pressure from the board to meet new ESG goals and criteria.
In this blog, we explore how retailers can take advantage of the green retail trend and what the future holds for Australian retailers. We look at what green retail holds in store for Australian retailers - and the steps they can take to strive and profit through adopting a long-term strategy that goes beyond the trend and into the DNA of the brand.
Sustainability in AU
The retail industry in Australia has been at the forefront of this sustainability revolution and is now experiencing a major shift toward green retailing. This involves implementing strategies such as reducing packaging waste, increasing energy efficiency, and sourcing sustainable materials for product production.
However, not all retailers are equally prepared to meet this challenge. According to a recent study by professional services firm KPMG, many brands are still lagging in ESG integration. The study surveyed 1,300 Chief Executive Officers across 12 countries and found that while ESG is a top priority for retail leaders, many are struggling to translate this into action.
Consumer brands tend to be newcomers to the ESG space - focused solely on meeting regulatory and reporting requirements and lacking the resources or executive sponsorship to expand beyond. In contrast, retailers tend to be more advanced in their ESG integration, attracting green finance and gaining traction in a crowded marketplace.
Examples of Current Green Retail Trends in Australia
The Phasing Out of Plastics
Several Australian states have introduced bans on single-use plastics to reduce plastic pollution. As of March 2021, South Australia banned straws, stirrers, and cutlery, with a ban on polystyrene food and beverage containers set to come into effect in 2022.
Similarly, the ACT Government has banned plastic cutlery and stirrers since July 2021, with a straw ban set to effect in July 2022. Queensland is set to follow suit, with a ban on single-use plastics set to effect in September 2021. These bans are a positive step toward reducing plastic pollution, and it is hoped that other states will follow suit shortly.
Click & Collect Buying from Warehouses
The click-and-collect trend has been rising in recent years and is expected to continue. Click-and-collect buying makes it easier for customers to shop for items from their own homes rather than visiting a store in person, having experienced a huge peak during the pandemic – this trend continues to rise as consumer habits change.
This method eliminates unnecessary trips and reduces fuel consumption due to fewer deliveries being made. Many retailers have been quick to take advantage, with companies such as Harvey Norman and Bunnings implementing click-and-collect services in quick response to customer desire.
In addition to reducing transportation costs, this also helps protect the environment by reducing resource consumption. For example, when customers collect items from a warehouse rather than having them delivered, there is less packaging waste generated due to fewer deliveries being made.
Made-to-Size Shipping Boxes
A growing number of retailers are now offering made-to-size shipping boxes. This is a system that reduces the amount of packaging waste generated by sending items in boxes that are larger than necessary. The boxes are designed to be the exact size required for the shipped item, eliminating the need for excess packaging.
This is a win-win for both retailers and consumers. Retailers save on the cost of packaging materials, and consumers don't have to deal with excess packaging waste. In addition, this system can help reduce freight costs, as there is less waste to transport.
The FUTURE of ESG Integration
ESG integration is only set to increase in the coming years. Retailers are increasingly aware of their environmental impact and are taking proactive steps to reduce it.
But what are some practical ways that retailers can start integrating ESG into their operations beyond today's regulatory requirements?
Making ESG Part of Your Brand Story
The first step in integrating ESG into your operations is to make it part of your brand story. This means telling your customers about the steps you’re taking to reduce waste, conserve energy, and support ethical sourcing.
How you communicate these initiatives is just as important as what you do. Make sure your message is clear, concise, and engaging to ensure that customers understand the value of your sustainability efforts. For instance, you could use case studies or videos to showcase how your company is working towards a greener future.
The goal is to show customers that you’re committed to sustainability and that it’s not just a passing trend. One example is Citizen Wolf - a Sydney-based clothing brand whose Magic Fit™clothing line is Ethical Clothing Australia certified. The retailer operates out of its Sydney factory which is open to the public - increasing transparency and public awareness. They also promote sustainability and fair-trade methods in brand retail, specifically the Modern Slavery Act.