How to go bust in retailing 7: Misunderstanding sustainability
Getting sustainability right probably isn’t essential for most retailers. But some misunderstandings of sustainability can be a pretty good indication of deep misunderstandings of today’s retailing.
The wrong-headed set of recipes I’ve been attacking comes out with some extraordinary assertions that demonstrate how out of touch consultants are.
- “Green initiatives will go mainstream”. In clothing retail, practically ALL the green initiatives have been mainstream – and that’s been the case for a good while. It was Wal-Mart that led the attack on unsustainable use of cotton. It’s been Marks & Spencer that led the development of green, large-scale clothes manufacturing. It was Tesco who set up serious research on the really tough questions of what really cuts carbon emissions, and how to communicate individual products’ emissions to customers. In fact retailer involvement in sustainability has been extraordinarily uneven: at one end, lots of very small enthusiasts fascinated by the use of hemp or banana leaves, at the other end really intensive programmes from a handful of major multinationals – and in the middle…well, not very much. It’s very hard to see any evidence of small-scale enthusiasts pioneering sustainability ideas bigger businesses then take up: if you regard organic cotton as sustainable – and most environmentalists absolutely don’t, as we’ll see in a minute – it’s used mostly for large brands already. “Green will go mainstream” is a glib slogan that can only be used by someone who knows almost nothing about sustainability, retailing or the state of sustainable retailing today
“Early adopters will enjoy significant first mover advantage while laggards will have a tough time playing catch up.” It’s hard to believe this hogwash is still being churned out, as you’d have thought the dotcom era would have killed it for ever. Sony Umatic, Comet jets, all those web businesses of the late 1990s: wherever did this stuff about first mover advantage come from? In the case of sustainability in apparel retailing, though, there are particularly good reasons for why the idea’s especially absurd:
- We just don’t know what works. Is making a garment in a poor country, in a naturally ventilated factory manned by workers who walk, cycle or get a bus to work then trundling it round the world, more or less sustainable than making it in a Western factory that’s heated in winter, air conditioned in summer , and whose workers drive to work? The honest truth is we don’t know yet. And there’s no reason to imagine sourcing and design strategies that make sense on today’s understanding will still make sense once we’ve learned more. As so often: first movers may well back a strategy the market just doesn’t follow. Especially true on an issue like this, because:
- Early adaptors aren’t typical. They adapt early because they’re unusually motivated. I’ve been helping run my local sustainability group: most ordinary people accept that garments made by low-wage workers who don’t generate much by way of carbon emissions probably contribute less to global warming than garments made in rich countries. Most sustainability activists don’t: they’re often activists precisely because they dislike globalisation. ON the other hand, they don’t like organic cotton either, (uses more land per pound weight than ordinary cotton, and therefore contributes more to deforestation) whereas most ordinary people assume organic’s more sustainable. Following early adaptors can often push a business in entirely the wrong direction. Again, in the case of garments because:
- For many environmentalists, true sustainability means buying as few clothes possible. Any clothes buying causes more carbon emissions, so the answer is to buy less. Many retailers would conclude – as would many airlines – that hard-core sustainability customers simply aren’t a priority. It’s the next level that matter, and not all trends are ones you can make money out of
- “Retailers and brands that demonstrate genuine commitment to environmental stewardship will be rewarded by the growing green consumerism movement with… higher margins”. This is what activists call greenwash and ordinary businesses call hogwash. It’s precisely the view that activists think businesses take – which is why they suspect all environmental initiatives are cynical and manipulative. Businesses following this advice don’t get rewarded: they get consigned to the group of businesses he committed avoid. Sensible businesses, on the other hand, know that there’s no such thing as higher margins in the mainstream. If you accept organic cotton’s sustainable (and available in adequate quantities), then as soon as it gets mainstream, an organic t-shirt commands no higher a margin than a non-organic t-shirt. “Organic” simply becomes a feature that’s competed over like anything else
Above all, we’ve no way of knowing whether sustainability will become more commercially important in a recession. Common sense says it might well not: business prudence says this is not the time to invest resources in exploiting a trend that might go flat. Business prudence also says this isn’t a time to abandon an initiative if it shows signs of working – and “working” might not just mean attracting customers, but motivating staff or shareholders, fending off picket lines outside stores, or just reducing the cost of explaining why you’re destroying the planet.
All of these possible advantages of a sustainability policy come from a proper business analysis – not from unsubstantiated assertions from consultants. These assertions MAY be correct – but it takes more than a few repetitions of a mantra to make them so