“Consumers will start to really punish businesses not acting sustainably”

The latest Bheta forum saw members brought up to speed with the latest trends in the home improvement sector. The forum discussed the current state of the UK retail sector, the continuing growth of e-commerce, overstocking and the word which seemed to be on each of the speakers’ lips; sustainability.

Barclay’s director for retail and wholesale, Ian Gilmartin, outlined the general performance of the UK home enhancement retail sector, including the impact of Brexit on the high street and consumer spending. It wasn’t all bad news though, as Gilmartin revealed that despite weak consumer confidence, retail sales are holding up fairly well in comparison to the ’08 crash.

According to him, consumers aren’t necessarily spending less, they are just spending in different ways. Cue, the emergence of e-commerce and click and collect sales models for online sales, which Gilmartin revealed made up 21% of all total retail sales in 2018. “Those who are doing well are doing so because they are investing and adapting to make improvements to keep of with consumer trends,” he explained.

He admitted the UK was experiencing a tough retail environment, though, and a structural shift in the UK towards online sales has lead to subdued demand and increasing cost pressures for more traditional retailers, with Brexit expected to cause ‘unwelcome surprises’ in the supply chain.

Gilmartin’s fellow speakers, though, were more concerned with another trend facing the retail and home enhancement sector; sustainability. CEO and founder of buyfair, a “premium B2B version of ebay, with a twist”, Dominic Speelman, explained how he had identified a major problem of overstocking in warehouses due to a global issue of cheap production prices leading to over-ordering, and thus an excess of stock.

To tackle this issue, and therefore reduce warehouse carbon footprints and costs, Speelman created buyfair where brands can sell excess stock to other businesses in lots. “There is currently £5 billion worth of overstock currently sitting in warehouses,” he revealed. “After visiting trade fairs, I realised this was a taboo subject and not just a huge problem, but a global one.”

Phil Pond, director of consumer and design insights at Scarlet Opus, also dedicated his presentation to sustainability, but from the consumers point of view: “Thoughts of consumers are frustrated because they don’t think we in business are acting quickly enough,” he said. “In business, things sometimes get in the way of doing the right thing. We need to pick up this challis.”

Pond identified how consumers are becoming increasingly environmentally-minded when choosing where to spend their money, and are now holding businesses to account for their practices; purchasing from those who are embracing and integrating sustainable emphasises into their business models, products and packaging, while avoiding, and even rebuking, those who do not.

“Within two to three years consumers will start to really punish brands not acting sustainably. Over the next 18 months there will be huge pressures from consumers on businesses to be transparent. Consumers are starting to stop blaming retailers for their products and plastic packaging and so on, and are now starting to look at the supply chain.”

Pond identified a generational trend, with young people becoming increasingly environmentally-aware and progressively motivated to pile the pressure on businesses to make changes to products, packaging and practices to become more sustainable: “What we see is a tsunami building quietly of people under 30 somewhere, and it won’t be more than five years before people my age are dragged out by that wave and come rushing back at once.

“This isn’t going anywhere – this is how life is.”