Shoptalk Europe, held in Barcelona, stands as the premier retail conference in Europe, bringing together brands, retailers, and industry professionals to explore topics such as retail transformation, shifting consumer behaviour, and strategies to adapt to an ever-changing business landscape.
In 2022, with inflation emerging as the primary global challenge, the focus of retailers shifted towards enhancing pricing strategies and establishing efficient supply chains. Yet, among the numerous trends discussed by market leaders at ShopTalk Europe, sustainability was mentioned the most frequently as a major factor shaping retail in 2023 and beyond. Retail professionals strongly believe that implementing a sustainability strategy is now critical to ensuring long-term viability in the retail sector.
While sustainability covers a broad range of topics, the conference specifically highlighted food waste and circular economy initiatives.
Consumers drive the shift towards sustainability
Consumers play a pivotal role in catalysing the transition towards sustainability. Like never before, consumers believe that they possess the power to influence businesses through their choices in everyday life. Millennials are most vocal in this belief, with 64% saying they can make a difference to the world through their choices and actions, but Generation X which has shifted the most on their views, going from 45% in 2015 to 58% in 2023, based on Euromonitor’s Voice of the Consumer: Lifestyle Survey.
Retailers agree that consumers are forcing them to change in terms of sustainability. In 2022, 79% of retail professionals whose companies are investing in sustainability initiatives say that they do that because of customer perception/brand reputation, based on Euromonitor’s Voice of the Industry: Sustainability Survey.
New retail models address food waste
Food waste is a pervasive issue that spans from agricultural production to landfill disposal. The latest report on the State of Food and Agriculture from the UN confirms that, globally, around one-third of the world's food is lost or wasted each year. This growing concern has led to an increased focus on finding solutions to reduce food waste, including the development of technology-based solutions.
For example, Matsmart-Motatos is an online store that focuses on reducing food waste. It sells products that would otherwise go to waste due to overproduction, faulty packaging, seasonal trends, or approaching expiration dates. Matsmart-Motatos specializes in offering discounted long-life household goods like store cupboard staples, beverages, toiletries, and pet food. Since its launch in Sweden in 2014, the company has expanded to Finland, Denmark, Germany, and the United Kingdom.
According to the State of Food and Agriculture report from 2019, approximately 14% of the world's food is still lost before arrival at retail stores.
In 2023, 56% of consumers globally tried to reduce food waste to positively impact on the environment
Source: Euromonitor International's Voice of the Consumer: Sustainability Survey
In recent years, urban farming firms and other agricultural enterprises have been exploring innovative approaches to expand their offerings and engage with consumers in new ways, like direct-to-consumer delivery to address this issue and better forecast demand.
Oddbox is one such solution. It is a subscription-based service that delivers weekly boxes of products to customers that would otherwise go to waste due to factors such as their size, shape, or surplus status. Oddbox aims to reduce at least three million tonnes of fruit and vegetables that are wasted each year. The company shared that it has recorded significant sales growth from GBP3.4 million in 2019 to over GBP30 million in 2021.
The circular economy goes mainstream
As the COVID-19 pandemic has accelerated e-commerce growth, the cost-of-living crisis in 2022 and advancements in technology have transformed the circular economy, pushing it to new levels of innovation and efficiency. Consumer attitudes towards circular economy products and services have become increasingly favourable – not only because of environmental concerns, but because circular economy solutions provide cost savings to consumers.
34% of consumers buy previously used products because of sustainability benefits, while 73% buy previously used products because they are less expensive than new ones
Source: eBay annual report
Consumer perceptions towards pre-owned shopping have undergone a significant shift. The stigma once associated with charity shops and second-hand items has transformed.
Consumer perceptions towards charity shops and shopping for second-hand items have undergone a significant shift. Sustainability has emerged as a core value, and purchasing pre-owned products is now seen as a way to contribute positively to the planet. The primary issue regarding the purchase of premium pre-owned products was a lack of confidence in their authenticity. To solve this, eBay provides an authenticity guarantee. Eligible purchases are physically inspected by experts before being shipped to the buyer or returned to the seller.
Extending the life cycle of products is another crucial aspect of sustainability, as it reduces the need for new products, leading to fewer environmental consequences related to production and waste management. For instance, Bike Club, a bike sharing service, aims to extend the life cycle of bikes it uses by advocating for improved quality from manufacturers, resulting in both increased profitability for the company and longer usage of the bikes.
A holistic approach will shape the sustainability agenda
In an era of social activism coupled with the power of social media, retailers and brands must go beyond providing consumers value for money to showcase their corporate, social and environmental responsibility credentials. Even though most brands have now established a sustainability agenda, retailers still have room for improvement.
In 2023, only 63% of retail professionals state that their companies have implemented sustainability strategies
Source: Euromonitor International’s Voice of the Industry: Sustainability Survey 2023
At the same time, sustainability has become a critical aspect of business operations, impacting the long-term viability of many companies. Retailers will need to take a holistic approach to their operations, as sustainability is not a mere key performance indicator anymore, but rather a strategy unifying all aspects of retail operations.