‘Green’ retail

A sustainable USP

1 Mar 2022

Dr. Stephan Telschow, a market researcher from Berlin, explained: “It’s all about being believed. What counts when it comes to sustainability in retail are your attitude, consistency and transparency.” In the interview, this expert told about his “small steps” on the path to success and the communications pitfalls to avoid. Telschow believes it’s a fallacy to say consumers are not prepared to pay more for sustainability: “It depends on retailers taking the right measures”.

Woman pays contactless in retail

Sustainability is increasingly important in the consumer goods sector – more and more consumers demand it. What challenges does that pose for retailers?

For a long time, retailers could either act sustainably or not. Now it has become clear that sustainability is an ongoing journey that can start with relatively small steps. It’s no longer simply black and white. At the heart of the challenge are two issues: firstly logistics, in terms of being climate neutral, and secondly social sustainability – that means where the goods come from and how they are produced.

What strategies and measures can retailers use to send a visible, authentic and transparent message about sustainability to their customers?

First and foremost, retailers must always ensure their measures fit into a good overall concept and combine to tell a sound story about their own sustainability. Consumers should get the impression that the retailer is taking measures because of their own convictions. Consumers are becoming allergic to token efforts at advertising and communications around sustainability. After all, when you see a sign at the filling station asking you to ‘Join us in planting trees’ you have to ask yourself what that’s all about. So don’t use set phrases: it's all about being believed.

That’s more a question of telling stories about your products. We’re currently seeing that people are once again ready to absorb information. That’s especially true of younger consumers. So one good approach is to offer this at the point of sale – background information on the product, how and where it was manufactured.

Graphic on the topic "What drives sustainability?

Which measures should be top of our list?

The possibilities are endless. But it’s definitely not enough for instance to fit out your shop with untreated wood and add a bit of greenery. These might suggest ‘nature’, but these days they won’t convince anyone you’re sustainable. Yet it is true that consumers pay attention to materials. For example: if your conventional secondary placement uses a plastic display, and it’s obvious you’re going to throw it away afterwards, that will be frowned upon. It’s important for every measure to come from the heart, for the retailer to be fully behind it: that will convey your intention.

Is age the key to understanding sustainability?

The idea that it’s younger consumers who are driving sustainability is an illusion. In fact it’s largely older people. They take a different view and ask more questions, about the origins of the product and so on. Younger people look much more to the storytelling, a strong concept. They ask fewer questions. So you can market almost any product to under-30s, as long as the adverts contain an emotive image like a glacier, alongside two brilliant people saying how they came up with the idea of developing precisely that product. Perhaps it was inspired by a glacier or it’s made with water from the glacier – it’s the story that appeals to them.

Greater sustainability means more financial investment. How can this be worthwhile for retailers?

Sustainability measures aren’t part of your profitability calculation per se. The real incentive for the retailer should be what they’re giving back to nature, society and their immediate surroundings. We hear that consumers demand sustainability but aren’t willing to pay more for it. That’s a preconceived idea. If a retailer is good enough and can convincingly communicate the benefit of a more sustainable alternative – the benefit needn’t be that the product is better for the consumer, it could be better for the environment – then consumers are often prepared to pay more.  Increasingly, people want product quality to be high enough they can buy it with a clear conscience.

Pitfall: Green Washing. If your company becomes ‘green’ almost overnight, it won’t usually be credible. And if customers feel deceived, they can kick up a stink. Might it be best to approach sustainability more gradually?

Yes, I’d recommend taking small steps. You can still achieve a lot that way. It’s not about delivering 100% sustainability, but showing you’re making an effort. ‘I’m not perfect, but I’m trying to improve’ – it’s an attitude that will reap rewards. Tackling the issue of packaging is relatively easy, because there are quite a few alternatives available. And retailers should emphasise their own motivation for all these steps. Why am I doing this, how am I doing this? Consumers need to see that retailers are taking the issue seriously. Your attitude is the key here.

“What counts when it comes to sustainability and retail are your attitude, consistency and transparency. Your actions and communications need to be completely credible.”

Dr. Stephan Telschow, Managing Director of GIM, Gesellschaft für Innovative Marktforschung

It’s often hard for retailers to check all their supply chains. How much can they do?

Supply chains are a big issue, and a hard one to tackle in terms of communications. What to do for the best? Communicate openly that the product comes from Bangladesh – and perhaps it will feed many families there; as the retailer, you’ve looked into each link in the chain. We can all have clichéd ideas. Sometimes working conditions in India or Asia are actually far better than they are in Portugal. If you know the manufacturer personally, perhaps you’ve met them at a trade fair or visited the factory or ceramics workshop, that will help reinforce your own image in terms of sustainability.

In your market research you say that ‘It’s not enough for your message to be sustainable’ and you provide ‘Golden rules for green communications’. What are the key rules and how can retailers apply them?

One example is not to use too many slogans for sustainability, or use superficial arguments people can see through. Sustainability is more than marketing, more than a story on Instagram or in glossy ads. There’s a problem with stickers saying ‘Now 100% environmentally friendly’. Retailers shouldn’t try and give the impression that they’re perfect: don’t try to claim that you have achieved perfection already. It’s better to make constant, credible efforts to be sustainable, taking small steps if you need to. Share your targets and don’t be afraid to show any targets you haven’t met or targets you can’t meet. A lot of consumers will know how challenging it is to act sustainably, at all times, consistently. So how can they believe that a retailer or brand is perfectly sustainable, and glamorous to boot?

Sustainability is an important buying criterion – but surely price and quality come first? So why are consumers in this goods retail sector willing to pay a premium for sustainable products?

If as a consumer I see the higher price as a little green sticker, something I can identify as part of the marketing machine, it won’t work. But if the higher price is sold to me as an actual benefit from buying the product, as part of the brand’s overall feelgood factor, then it will work. If it’s clear to the consumer that buying this product means helping make the world a little better, they will bite.

Woman in flower shop with paper and pen in hand

Environmentally conscious consumer behaviour is predicted to increase further. Sustainability will become the norm rather than the exception. How do you see the future?

Sustainability is already a basic expectation of manufacturers and brands in many sectors. There are certain basic conditions they simply need to meet. One example of the way things are going is with conventional manufacturing brands that have always advertised their sustainability: they now have a problem. For decades, they’ve made a living from offering natural products. Now almost all manufacturers are claiming to do the same, so the conventional brands find it increasingly different to differentiate themselves. That will become a challenge in many different sectors. If all brands are particularly sustainable, then that’s no longer a buying criterion.

Dr. Stephan Telschow

Dr. Stephan Telschow is Managing Director of GIM Gesellschaft für Innovative Marktforschung, and is responsible for the Operations and Business Development divisions. His research mainly focuses on shoppers. Other specialisms include sustainability, packaging and cosmetics.