How to drive sustainability in the retail sector

According to the European Commission less than a quarter of the 5.2 million tonnes of clothing waste generated each year in Europe ends up being recycled. That is why a growing zero-waste movement has gained traction with both consumers and legislators, with “extended producer responsibility” rules on textiles being set out. Similar laws on packaging have come into force in multiple states in the US.

This has all led to the promotion of the ‘circular economy’ in the fashion world as a potential solution; this includes rental, resale, and repair to extend the lifecycle of products. But the modern shopper wants more.

“Consumers want to see brands move beyond the surface level of a ‘circular’ offering and not only expand towards an ecosystem of offerings but also embrace ‘circularity’ as a way of life in their operations,” said Lucia Li, global payments advisory, consumer goods and retail at J.P. Morgan Payments in a recent interview with Vogue Business.

In fact, technology may offer the best way forward – new cloud-based offerings are helping retail companies drive sustainability in ways that are good for the planet and good for profits. A recent report by Deloitte and Google Cloud, presented at the World Retail Congress 2023, backed this up by showing how tech can power quick sustainability wins that can translate to long-term gains, in and out of the boardroom. Cloud computing provides scalable and flexible infrastructure, allowing retail organisations to access and store data and applications remotely. This technology streamlines operations, reduces IT costs, and enables seamless collaboration. For retail, it offers the ability and agility to adapt to changing market conditions and scale as needed.

Back to payments, and one innovation that is gaining traction and might help boost sustainability in retail is buy-now, pay-later. Indeed, most luxury fashion brands now offer this as a checkout option. Ideal for younger consumers put off by the high up-front price of environmentally friendly items.

Li says this is particularly relevant given the economic conditions expected in 2024 and persistently lower-than-average levels of consumer confidence. “It reduces another friction for consumers to decide to purchase sustainably,” she explained.

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