Regenerative Retail Economy

A Foresight Report for Avery Dennison

report
featured-post
category - society
category - sustainability
type - case studies
Case Studies
While sustainability has long been a watchword among businesses, it has taken on new levels of urgency during the Covid-19 pandemic. Avery Dennison commissioned The Future Laboratory to produce a new foresight report identifying the emerging trends within the sustainable retail model

The link between human behaviour and the environment has never been starker, as is the need for collective action. For retail specifically, the pandemic has brought latent problems to the surface. The fragility of just-in-time global supply chains, the undervaluation of factory and warehouse workers and the lack of digitalisation have all become crisis points during a year when many retail stores remained closed and consumers pivoted to e-commerce.

In an emerging model, retailers, manufacturers, suppliers, brands and consumers will each take responsibility and ownership over the collective need for a more sustainable future. ‘If we do it correctly, within 10 years we won’t even talk about sustainability,’ says Chaffo. ‘We won’t call it sustainability. It’s just the way business is done.’

This report combines expert interviews with consumer insight and identifies the emerging trends and attitudes that will drive transformation in the decade ahead. It highlights the groundbreaking technologies which will fundamentally change how retail and consumer brands do business as well as breakthrough approaches to e-commerce and omnichannel retailing.

Below you can read a snippet of the resulting Regenerative Retail Economy Report with key take-outs and statistics. Click below to download the full report PDF. 

DOWNLOAD THE FULL REPORT 

Commissioned by:

17 September 2021

Author: The Future Laboratory

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: Drivers

Through its Modular Mailbox, Klarna is exploring how to improve the e-commerce experience by placing lockers in neighborhoods where people can collect online orders, rent items or even 3D-print products

The systemic cracks in the current retail model, the rise of e-commerce and its consequent environmental impact, alongside consumers’ ethical mindsets and a renewed interest in stakeholder capitalism, are all driving a need for regenerative retail models.

Examples of the types of drivers we've seen include:

: Ethical Awareness
The last decade has been defined by a growing ethical consciousness among consumers. Pew Research Center data published in 2019 shows that 67% of the global population believe climate change to be a major threat to their nation, compared to 56% in 2013.

: Stakeholder Capitalism
Stakeholder capitalism – the belief that companies’ operations shouldn’t be geared towards short-term profits for shareholders, but long-term value creation for all their stakeholders including employees, customers, suppliers, communities and society at large – is gaining popularity.

: Convenience Conundrum
Years of race-to-the-bottom tactics to capture consumer spend has led to convenience being the predominant deciding factor for many shoppers. The National Retail Federation’s Consumer View Winter 2020 report found that over nine in ten consumers are more likely to choose a retailer based on convenience and 83% say convenience is more important when shopping than five years ago.

‘There is also a growing understanding that sustainability expands beyond preserving the natural world.’ 

: Trends

Box by Posti positions logistics as a consumer-facing service in urban districts

Retailers are using technological and material innovation to transform retail logistics, packaging and marketing and build sustainable retail systems with lower environmental impact.

Some of the trends emerging include:

: Omnichannel Oversight
Shopping habits that grew during lockdown such as Buy Online Pick-up In-Store (BOPIS) and curbside delivery may become permanent behaviors as physical stores become important hubs of fulfillment rather than just a customer-facing experience.

: Sustainability Delivered
The continued growth of e-commerce means there is a pressing need for sustainable packaging across sectors. Consumers expect retailers to offer sustainable packaging options – 73% of people want online retailers to use recyclable packaging and 74% expect them to minimise their use of packaging.16 In response, brands and retailers are reducing the footprint of their packaging by enhancing its recyclability and increasing the use of sustainable materials.

: Values-first Commerce
A 2020 global study by IBM found that 40% of customers now seek out products and services aligned with their values. The B Corporation organisation verifies businesses that meet high social and environmental standards, thereby helping the public to identify ethical firms. The number of companies registered with B Corporation has grown from 82 in 2007 to over 3,000 in 2021, with large enterprises including French multinational company Danone and the Brazilian global cosmetics group Natura & Co now certified.

Discover our Eco-venience Retail macrotrend on LS:N Global and uncover how accelerating e-commerce and demands for expedited delivery are forcing a new framework that puts eco-conscious practices at the centre of retail operations.

DISCOVER OUR ECO-VENIENCE RETAIL MACROTREND

‘The primary packaging holds true value, but if the label hinders recycling, you waste a lot of packaging.’
Luuk Zonneveld, Product Manager, Select Solutions at Avery Dennison

: Futures

Sportswear companies Adidas and Allbirds have unveiled a low-emission running shoe that unites their expertize in the use of sustainable materials

In the future, a more sustainable retail model will be defined by a circular approach to packaging, greater transparency around environmental impact and the rise of radical collaboration.

Defining this future, we'll see:

: Pro-planet Packaging
Currently the infrastructure for compostable packaging is sparse. Packaging either has to be sent to an industrial composting center or put in a backyard compost bin, and even then compostable bioplastic doesn’t break down very easily or quickly; if it does, it can leave plastic microparticles behind. Seeking alternatives, scientists are developing more circular packaging through material innovations or enhancing the recyclability
of products.

: Proof of Impact
As environmental impact becomes a metric by which retailers are judged, they will need to offer transparency and traceability, and to back up sustainability claims with evidence. Retailers will calculate and share their impact with consumers, and technology will allows consumers access to end-to-end transparency across the supply chain.

: Radical Collaboration
One of the goals of COP26 is ‘work together to deliver’ in order to accelerate action to tackle the climate crisis through collaborations between governments, businesses and civil society.

To learn more from about the Regenerative Retail Economy, download the full report here.

If you are interested in finding out more about our Foresight reports that combine quantitative and qualitative research with original case studies and innovations to achieve your business objectives, click here.

For more about our client reports and case studies, get in touch with a member of our team.
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‘A more sustainable retail model will be defined by a circular approach to packaging, greater transparency around environmental impact and the rise of radical collaboration.’

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