The Big River Company And Other Retail Fables
You got a guilty secret too? I bet you have. But don’t worry, you’re in good company. Because according to Statista, there are 200 million Amazon Prime customers worldwide. That’s a lot of people prepared to pay a membership fee just for the privilege of using an online retailer.
But of course Amazon isn’t a retailer is it? It’s a data science organisation. Which just happens to work. Effortlessly. We don’t love it but we sure as hell like using the ease and convenience of it.
But the by-product from all that eCommerce is waste, so let’s consider that for a moment and in doing so look further afield than Amazon. Because it’s not alone in producing an awful lot which we, as consumers, greenwash ourselves into believing that we shouldn’t be too overly concerned. Feed the recycling bin and our conscience is cleansed.
Back in 2018, the World Bank was reporting that if we didn’t do anything to stem the tide, global annual waste generation is expected to jump to 3.4 billion tonnes over the next 30 years, up from 2.01 billion tonnes in 2016. Plastics being a particular problem, clogging waterways, rivers and our oceans.
But let’s not pile in on plastic, what about all that packaging?
From 2009 to 2019, ‘paper and cardboard’ was the main packaging . And returns waste material in the EU (32.2 million tonnes in 2019) followed by plastic and glass (15.4 million tonnes for plastic and 15.1 million tonnes for glass waste materials in 2019).*
And we haven’t even begun to calculate all those extra emissions generated from home delivery. And returns! What about returns? Has there ever been a bigger single act of self-harm retail has inflicted on itself than returns?
In a report by nosto using data from Salecycle, 64.2% of returns are because the product did not match the description — translation, “thought I’d order a bunch of sizes / colours to see which one I liked and return the rest”, otherwise known as ‘bracketing’.
We’re all becoming much more aware of our environment and the planet — Covid made sure of that, but is this new awareness yet translating into action?
According to Mastercard, a 2021 study conducted across 24 countries revealed that 58% of adults are more mindful of their impact on the environment and 85% said that they are willing to take personal action to combat environmental and sustainability challenges.
But will that intent translate into consuming less and therefore producing less of that harmful waste? These things often have a habit of self-regulating themselves.
Interest rates have been low ever since the 2008 financial crisis, stimulating spend which drives economic growth. But rising prices are fueling inflation therefore interest rates are rising once more.
Put in the context of household budgets being put under pressure on all fronts, are we about to witness a dramatic decrease in spending?
Because just as we individually are facing rising costs, so are retailers, and it would be too simplistic to assume that 100% of that will be passed on to us.
Which is why the landscape is shifting and with it, retailer’s priorities. Great customer experience is one thing but when your cost base is increasing exponentially, and it becomes ever more difficult to remain competitive, the only game in town becomes productivity and efficiency.
We have and always will remain a consumer driven society, it’s just that in 2022 we may see our behaviour dialled back a little. And that wouldn’t necessarily be a bad thing.
Andrew Busby is Global Retail Leader at Software AG and Founder of Retail Reflections