A sustainability story

One of the UK’s biggest apparel retailers has removed returns cards from their packaging and shifted returns admin onto their app. This decision was environmentally friendly, cost effective and easier for customers. It seemed a good combination of CX improvement and sustainable process.

However, the company scored badly when Uncrowd assessed how straightforward the returns process was for customers. Customers found it confusing.

The retailer had made sustainability changes with good intentions, but hadn't successfully communicated these changes, creating friction in the customer journey.

This disconnect is a key challenge facing retailers today.

• How do you join up sustainability measures with excellence in customer experience?
• How do you make sure changes that lessen environmental impact align with influencing more customers to choose you?
• How do you measure the relationship between sustainability and the bottom line?

The intention/action gap

Fashion retailers are increasingly being pushed to address sustainability by regulatory requirements and consumer desire for sustainable fashion.

But there is a big problem - consumer interest in sustainability is not necessarily reflected in consumer behaviour. There is a disconnect between what customers say about sustainability, and what they actually do about it.

In survey after survey, consumers say that sustainability influences how they shop. But the choices they make when they shop may not reflect that sentiment.

The question for fashion retailers: is sustainability an effective strategy for competitive differentiation?

What customers say

Consumer surveys report that the majority of customers think sustainability is important.

• McKinsey - "67% of consumers say the use of sustainable materials was an important factor in their purchase decisions."
• Economist Intelligence Unit - "71% rise in search popularity for sustainable goods over the five years leading up to 2021."
• Global Sustainability Study 2022 - "Globally, 85 percent of people indicate that they have shifted their purchase behaviour towards being more sustainable in the past five years."
• First Insight Inc - "73% of consumers under the age of 22 are willing to pay more for sustainable products."

This rise in awareness and interest in sustainable shopping is undeniable. However, these surveys only report customer sentiment, not customer behaviour. Surveys rely on customers self-reporting purchase behaviour and self-analys of their own decision making.

A fundamental flaw with using customer surveys to analyse any aspect of shopping behaviour is that humans are not good at analysing the motivations for our own actions – a series of cognitive biases get in the way. For example:

• Misremembering (the natural human bias towards preserving a positive mental image of ourselves by misremembering how we acted in the past)
  
• Choice-supportive bias (remembering the choices we made in the past as better than they were)
  
• Overconfidence (overestimating how strong-willed or noble we are)
  
• Status quo bias (tendency to maintain an existing choice even when better alternatives exist)

These biases are particularly relevant to sustainability, where consumers like to view themselves as responsible shoppers, and may be inclined to self-report sustainability as a more important factor in purchase decisions than it really is.

What customers do

So, customers are expressing that sustainability is important - but is this truly reflected in their behaviour?

HBR reported that sales of sustainable products are increasing and the sustainable fashion market is growing, but there is also evidence that the majority of consumers are not changing their behaviours in any significant way to sustainable shopping.

• Customers now routinely expect easy, free returns for online purchases - 34% of clothing items ordered online in the UK in 2022 were returned.
  
• Despite bumps along the road, the global fast fashion industry is forecasted to grow from 99 to 133 billion dollars between now and 2026.
  
• Fast delivery is an expectation for consumers, with those younger age groups who show a higher awareness of sustainability being three times more likely to pay more for quick shipping.

Even customer opinion surveys themselves can show the disconnect between what customers say and what they do. A 2022 McKinsey survey found a correlation between consumers who were most engaged with sustainability issues, and those who said they renewed their wardrobes every season.

Sustainability and communication

There is a problem with relying on customer opinion to set sustainability targets and make changes to CX - it often doesn’t translate to customer action.

It's clear however that customers want to find easy ways to shop sustainably.

If you change how you analyse the real CX environment to measure what customers actually encounter, notice and react to when they shop, you may find that messaging around sustainability is not landing.

A real-world example: Uncrowd partnered with a major sportswear retailer that scored well on sustainability criteria as a business (as measured by an independent auditor). This retailer was doing well with packaging reduction and materials, but when Uncrowd measured their visual merchandising of sustainability, they scored badly. Good sustainable practices were in place, but again they weren’t being successfully communicated - missing out on key sales from those customers genuinely motivated by sustainability.

Creating reward for customers

Going back to that UK apparel retailer mentioned at the start, who removed returns cards from their delivery packages; they discovered that they had created a friction point, and could also see a fix for their issue - better communication of their returns process to customers, for example adding messaging on existing packaging.

They could turn a friction point into a customer reward, making customers aware that they are engaging in a sustainable process, and fulfilling the desire to participate in a more sustainable fashion economy.

This type of reward has the potential to influence more people to choose to shop with you versus your competitors. And when more customers choose you, you grow market share.

Key takeaway

To successfully uncover opportunities to link sustainability to reward for customers, you need an objective analysis of your complete CX environment, not an analysis based on biased customer opinion.

What you can do now

Don't rely solely on customer opinion to plan CX changes related to sustainability - look at deepening your analytics insight with a different type of metric.

Customer feedback can be useful for uncovering some problems, and customers like to be heard. But relying on customer feedback to try to understand the impact of sustainability changes on your bottom line is risky.

Instead, we recommend that you objectively measure the impact of sustainability changes on your CX environment, including how you communicate the changes you make to your customers. This could involve using a tool like the Uncrowd platform. Uncrowd was created to collect empirical observations across the CX journey and also provide competitor comparisons.