Retail Sustainability: Trends, Strategies, and Packaging Tips

Retail Sustainability: Trends, Strategies, and Packaging Tips

ByMichael Dillon

With the rising concerns over climate change, the retail industry is confronting environmental challenges that require more responsible solutions.

Take a look at the packaging industry. A recent report revealed that 79% of consumers prefer products with sustainable packing, with 63% less likely to buy items with environmentally harmful materials. Now that consumers have become more aware of the ecological implications of their purchases, understanding and adopting sustainability in retail has become necessary for businesses looking to remain competitive.

Retail sustainability involves integrating eco-friendly practices into business operations and minimizing ecological impact. It also focuses on product packaging as a key player in promoting environmental responsibility. With that, this article explores the latest sustainability trends in retail that are currently shaping the industry, plus some packaging tips to bolster retailers’ commitment to eco-friendly practices.

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retail sustainability (infographic)

Sustainability in Retail: 6 Key Statistics

Awareness of current figures describing the current state of retail sustainability can help sellers improve their future strategies and decision-making.

1. Plastic packaging is responsible for 40% of plastic waste (OECD)

Plastic consumption has increased four-fold in the past three decades, with retail packaging playing a significant part. In fact, among the 353 million tons of generated global plastic waste, nearly half comes from packaging. Meanwhile, 12% comes from consumer products and 11% from fabrics.

2. The retail supply chain contributes to 25% of greenhouse gas emissions (GHG) globally (Deloitte)

The world emits 50 billion tons of GHG annually, and the retail supply chain is responsible for a quarter (12.5 billion). Besides consumer demand, the sheer amount of the industry’s GHG emissions further emphasizes the importance of retail sustainability.

3. 43% of shoppers are willing to support brands with sustainability practices (Retail Dive)

Some retailers are concerned about the price of sustainability. However, nearly half of consumers are actually willing to support companies with eco-friendly practices such as carbon-neutral logistics, renewable energy usage, and low-waste operations.

4. 77% of customers attribute the responsibility for sustainability to retailers (Mintel)

To add to the pressure on retailers to implement eco-conscious practices, most consumers see it as the industry’s obligation to be sustainable. Failing to meet this demand could mean lower customer support down the line.

5. 75% of organizations increased their sustainability investments in 2022 (Deloitte)

Three-quarters of customer experience officers (CxO) said they have boosted their investments in sustainable practices. Among them, 20% reported increasing their investments significantly—a step in the right path for the industry.

6. Sustainable products hold a 17.3% market share in 2022 (NYU)

Despite making up less than one-fifth of the consumer packaged goods (CPG) market, sustainability-marketed products accounted for one-third of its 30% market growth from 2013 to 2022. In 2023, sustainable products now hold an 18.5% market share. They also grew twice as fast as conventionally marketed products and the entire CPG market.

Understanding the following developments in retail sustainability can help companies stay ahead of their competition.

1. Circular economy initiatives

A growing number of retail companies are beginning to embrace a circular economy. It involves finding innovative ways to design products and packaging, creating a product cycle going from manufacturer to consumer to manufacturer again. For instance, fashion giant H&M implements it by producing clothing that lasts before buyers need to repair, reuse, or recycle them for further purposes.

2. Greener supply chains

Retailers proactively seek eco-friendly supply chain solutions to cut their carbon footprint. This development involves scrutinizing every aspect of the supply chain, from sourcing materials to distribution and logistics. 

For example, retailers can require ethical sourcing of materials and other sustainable initiatives from their suppliers, whether they supply name-brand products or contract manufacturers creating private-label products on behalf of the retailer. It’s important to make S.M.A.R.T. (Specific, Measurable, Achievable, Relevant, and Time-Bound) goals as part of this process. 

Walmart, in particular, tries to accelerate sustainability progress on their product supply chains across the retail industry. They set environmental and social goals related to climate, nature, waste, working conditions, responsible recruitment, economic opportunity, and availability of affordable, safer, and healthier products.

Aside from being beneficial to the environment, these strategies also help sellers stay competitive as more consumers demand greener supply chain operations.

3. Technology integration for sustainability

Tech advancements are essential in improving retail operations’ efficiency and, in effect, sustainability. 

For instance, retailers do a poor job addressing food waste as they are not held responsible for the environmental impact. Few have done more than seeking to purchase foods with a longer shelf life via plastic packaging.

Retailers can adopt technologies such as smart inventory management systems and RFID labels to improve traceability and minimize overstock to reduce food waste, which has been responsible for 8% of global GHG emissions.

4. Brand transparency

Recent data shows that 72% of consumers want brands to be more transparent regarding their sustainability. Hence, retailers must be more open and candid about their efforts. Those responding to this trend communicate their green strategies through product labels and digital platforms, allowing customers to make informed purchasing decisions that align with their values.

5. New regulations

Beyond customer needs, the regulatory landscape is also evolving to reflect the rising demand for retail sustainability. In California, a new legislation aims to reduce the amount of plastic packaging by 2032. It also boosts the state’s recycling rate and requires all single-use packaging, including plastics, metals, and papers, to be recyclable and compostable.

Such developments, even limited to a single area, pave the way for a broader movement toward a more sustainable business landscape.

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5 Best Practices for Sustainable Retail Operations

The following practices position retailers as leaders in a market where sustainability is increasingly integral to consumer preferences.

1. Reduce waste

Adopting zero-waste strategies enables sellers to minimize their environmental footprint drastically. An excellent place to start is with packaging; glass bottles, metal containers, and plastic jars encourage buyers to keep and repurpose them. Some companies, such as the Body Shop, even allow customers to refill old bottles to minimize the prevalence of single-use plastics in the cosmetics industry.

2. Utilize renewable energy

Retailers can switch from traditional utilities to environmentally friendly alternatives to improve sustainability and reduce overhead costs. For instance, they could work with utility companies to source renewable technology or work with their landlords to get those purchased. Solar panels are typically the most cost-efficient and accessible method of generating renewable electricity on-site. Retailers may also 

When renewable gas sources are much harder to source, retailers outside of the harshest environments can switch to electric heating for air and water. Heat pumps are ideal for this as they replace both a gas furnace (or boiler) and a less efficient air conditioner.

Furthermore, retailers can reduce energy consumption in their brick-and-mortar stores by selecting LEED or Energy Star-certified spaces to maximize energy efficiency. Food retailers specifically can purchase high-efficiency refrigeration and freezer units to hold perishable foods and minimize or eliminate the use of open-air coolers for grab-and-go foods.

3. Engage with the community

It is essential to recognize the significance of community engagement as an integral component of a robust sustainability strategy. Partnering with sustainable suppliers and manufacturers also helps address rising consumer demands, especially with 46% paying close attention to a retailer’s social responsibility when buying a product.

4. Educate consumers

Take proactive steps to inform buyers about the environmental impact of their purchasing decisions. For one, adding green certifications to product labels tells them they’re getting eco-friendly items, which may strengthen customer support and encourage them to buy more. 

5. Implement resale programs

Incorporating resale programs into retailers’ business models reduces waste and allows them to tap into the growing market of second-hand shoppers. For example, the segment around sneaker resale sits at a $5 billion market value, indicating a sustainable and potentially profitable goldmine in the industry. It’s a win-win scenario for both retailers and eco-conscious consumers.

The Role of Packaging in Retail Sustainability

Packaging directly influences customer behavior and the seller’s environmental impact. For instance, a retailer utilizing a reusable bottle for a beverage not only reduces waste by encouraging consumers to use them for other purposes. It also tells the growing eco-conscious customer base that the company is environmentally friendly, potentially boosting sales and long-term support.

3 Sustainable Retail Packaging Strategies

The strategies below focus on how retailers can use packaging to improve sustainability and appeal to an eco-conscious customer base.

1. Leverage eco-friendly materials

Eco-friendly packaging materials, including recycled paper, cardboard, and biodegradable plastics, are rapidly gaining prominence, so retailers may consider using them. Aside from causing little to no harm upon disposal, they also have the potential for circularity.

However, it’s also essential to acknowledge their limitations. While biodegradable plastics are durable and flexible, they are more expensive than paper bags. Meanwhile, the latter is more fragile despite being cheap. Retailers must consider these differences to determine which packaging materials suit their needs and budget.

2. Use minimalist packaging designs

Less is more. Minimalist designs, such as plain boxes with minimal printing, reduce packaging waste. First, it reduces the amount of unnecessary cardboard and paper that the packaging consumes. Simple printed designs also keep retailers from contributing to the 375 million environmentally harmful ink cartridges in landfills. Here is the Ordinary’s minimal yet attractive designs as an example.

3. Communicate sustainability to consumers

Retailers must clearly articulate their packaging choices, materials, and environmental benefits. In effect, they can build trust and empower buyers to make informed and sustainable purchasing decisions. An effective way to do this is by utilizing product labels and providing information on the company’s website and social media.

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Challenges and Solutions in Sustainable Retail

Retail sustainability is a rapidly growing trend, but the shift can sometimes be difficult. Here are some of these challenges and how to resolve them.

Cost constraints

Sustainable packaging costs are a common hindrance among retailers, especially small businesses with insufficient funding. Traditional plastic is cheaper than paper or biodegradable plastics, so the expense may discourage some from switching to eco-friendly alternatives.

It’s essential to look beyond the upfront costs. For example, integrating sustainable tech into the supply chain may entail a significant investment, but the improved efficiency could reduce operational expenses over time. Also, remember that consumers are willing to pay more for environmentally conscious brands—it could translate to better sales and repeat buyers in the long run.

Supply chain complexity

Many retailers have complex supply chains that make it challenging to ensure that all components adhere to sustainable practices. Take the Coca-Cola Company, for example. Its supply chain involves packaging and ingredient manufacturers, production facilities, bottling partners, and distributors. The touchpoints each product goes through might make it difficult to keep track of sustainable standards.

However, the solution for retailers is to partner with suppliers, manufacturers, and distributors with a track record as environmentally friendly organizations. It also helps to conduct regular audits and enforce standards throughout the supply chain.

Consumer perceptions and preferences

Changing buyer demands may be unmanageable. Opting for more eco-friendly yet pricy packaging materials means retailers must increase costs to compensate for the additional expenses. However, doing so might drive potential customers away toward less eco-friendly competitors. The same contradiction is also the case for other conflicting customer preferences.

Retailers must communicate their eco-friendly efforts clearly and educate their customers on the positive impact of their choices on the environment. Doing so informs them about the company’s journey toward sustainability, justifying potential price increases and adjustments that may go against customer preferences.

Regulatory compliance

Adhering to evolving environmental regulations can be challenging because some governments often enact laws abruptly. Even worse, global retailers may have difficulty managing different and sometimes conflicting laws in various jurisdictions.

Retail businesses must stay informed about current regulations and proactively engage in compliance efforts. They could also participate in sustainability programs to earn certifications, proving their compliance with applicable laws. One example is the EU Ecolabel, which helps consumers identify eco-friendly products per European Union standards.

Build a Greener Future for the Retail Industry

Adopting eco-friendly practices is becoming increasingly necessary as the retail landscape undergoes a revolutionary shift toward sustainability. By prioritizing the practices we have discussed, retailers can meet the expectations of environmentally conscious buyers and boost the broader movement toward a more responsible retail industry.

Turn your sustainable packaging plants into reality with Meyers’ professional printing solutions. We can supply your business with prime labels, retail product packaging, and other solutions to help secure your products sustainably. Contact us today and tell us about your business needs.

Michael Dillon