Consumers hold firm expectations that environmental sustainability and social responsibility should be at the forefront of everything from executive strategy, to day-to-day operations. This is set to become even more important as Gen Z becomes the dominant consumer audience. Notably, over 60 per cent of this demographic feels a personal responsibility over decisions that contribute to a better world – with this informing and shaping their purchasing habits. Australian consumers are also scep
o sceptical of brands who talk a big talk – but aren’t following this up with relevant actions in this space.
As part of the Australian Retailers Association’s sustainability and innovation breakfast – which took place earlier this week – CEO Paul Zahra hosted a discussion panel with Officeworks’ managing director Sarah Hunter, Woolworths’ chief sustainability officer Alex Holt, and Afterpay’s executive vice president and country manager APAC, Katrina Konstas.
Here’s a snapshot of this discussion.
Just make a start
According to Hunter, a key priority for Officeworks is ensuring that sustainability doesn’t come at an additional, consumer cost.
Rather, she said that the team works to ensure that the brand’s ‘people and planet positive’ products are as – or more affordable – compared to items that sit outside this range.
She noted that customers have responded positively to this offering, with sales growing at three times the rate of its base range.
“Strategically, we made a decision that customers won’t pay more [for this range]. Our buying team has to work harder but, in terms of customer participation, they want to buy people and planet positive products.”
Meanwhile Holt, who was appointed general manager of sustainability, health and quality at Woolworths in 2016, explained that the team would discuss plans at length in order to determine which initiatives would resonate with customers, and actually work.
“My biggest learning from this was to focus on a handful of things, and measure what [we] were doing. From there, you can start to see progress,” she said.
Holt pointed to five key areas that Woolworths have prioritised when it comes to sustainability: inclusion, decarbonisation, offering healthier products, plastics and packaging, and minimising food waste.
As an example, Woolworths is working with infinite recycling start-up Samsara with the goal of eliminating the need to produce new plastics. The company also set up a supplier sustainability council a few years ago, which would enable its suppliers to share ideas and collaborate.
An outcome has been an increase in the number of brands advertising their health-star ratings on the front of their products, which theoretically helps customers opt for healthier and more sustainable options. However, there have been claims that the health-star ratings are misleading.
Offering advice for retailers that want to start making strides when it comes to sustainability, she suggested not letting perfect get in the way of good practice.
“Over the years we’ve had many things that haven’t gone right. We’ve learned from them, and moved on very quickly,” Holt
Steal with pride
Hunter noted that Officeworks acquired a stake in Brisbane-based, social enterprise Circonomy. This is part of the company’s commitment to extending product life-cycles and ensuring that items don’t go to waste unnecessarily.
She added that there was sometimes a perception that Australia was lagging behind other nations when it comes to environmental sustainability.
However, she compared Australia to the United States, where circularity and sustainability has become contested and politicised.
Holt also referenced discussions with people from a major overseas company, who expressed surprise that sustainability was being driven by business groups in Australia.
“The change that businesses can drive here is phenomenal. [There] are pockets [overseas] that we look to, and are equally very comfortable stealing with pride,” she said.
According to Woolworths’ data, a primary area of concern for customers is the way that the company handles plastics, packaging and food waste. Holt believes this is connected to the cost-of-living crisis – with customers not wanting food to go to waste.
Woolworths – which has been criticised for delivering over $1.6 billion in profit during a cost-of-living crisis – has also seen an uptick in activity related to its food savers recipes.
“Customers are looking for products that [protect] animal welfare, are organic and sustainably sourced. They are hunting out and searching for these items,” she said.
“When Covid-19 started, we thought sustainability would become less important. But it came back even stronger, and is still incredibly important for our customers.”
Keep going
Concerning the fashion industry, Konstas noted that minimising waste has become an area of focus, with 200,000 tonnes of fashion items going into landfill in Australia each year.
For Afterpay, she said that collaborating with relevant organisations – such as the Australian Fashion Council, which recently introduced Seamless, a national products stewardship scheme – is a priority.
While the market for fast fashion is resilient, the resale industry is gaining momentum among a younger generation in particular, who want to support eco-friendly brands, and are counting every dollar.
“These customers are looking at the craftsmanship and are seeking ways to become more differentiated. I think this has led to wiser choices in their purchases,” Konstas said.
Hunter said that businesses of all sizes should consider every choice that they make, and opt for solutions – where possible – that are good for the planet.
“Don’t think because we’re a small country on a global scale, that we can’t have huge influence,” she said.
Holt added that brands should consider “progress over perfection,” and keep going even when things might not work.