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Have climate change fears impacted consumer spending?

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Few of us could ignore the news over Christmas that bushfires were ravaging Australia, with the disaster claiming nine lives since December 25, 2019. Many are attributing the ongoing event, and those like it to the effects of climate change.

But Australia, of course, isn’t the only example. Closer to home, on December 28, 2019, The Met Office recorded Britain’s “hottest ever” December temperature, reaching an unseasonably warm 18.7C in the Scottish highlands.

Climate change is undoubtedly having an adverse effect on the planet, but is it impacting the way consumers buy retail? Let’s look at Christmas 2019’s shopping results to find out.

Festive spending and the environment

fast fashion
Shoppers want to buy fewer cheap clothes due to climate change concerns.

In late 2019, Barclaycard conducted a survey that found over half (62%) of UK shoppers said they would make fewer Boxing Day purchases because of environmental concerns. At the top of their blacklists were ‘fast-fashion’ purchases (67%), with seven in ten shoppers saying they would avoid purchasing “cheap clothes” altogether.

The same survey estimated that 60% of post-Christmas Day (Boxing Day) shoppers would make their purchases online instead of heading to high streets. So, are consumers really buying less because of the environment? Or are they simply using different methods to buy the products they want?

The Black Friday effect

While the popularity of shopping over the Christmas period has declined, it doesn’t mean consumers are necessarily doing this for environmental reasons. In fact, consumers are purchasing Christmas gifts earlier on and particularly during Black Friday where they can source the best deals, says Barclaycard.

Research from the Office for National Statistics revealed that November 2019 saw the lowest period for consumer spending in more than a year, the findings, (not including Black Friday results), confirm that consumers were indeed delaying on their purchases to gain further discounts.

Boxing Day 2019

Boxing Day high street spending was estimated to be down by 12% from 2018. However, if shoppers are to shop at all post-Christmas, they’re more likely to do so online, with digital spending expected to rise by 10% to £1.1bn.

Retailer analysts, Springboard says the declining popularity of Boxing Day shopping is down to the discount freefall culture retailers are engaging in, with many starting it earlier. For example, Marks & Spencer and John Lewis commenced their online sales on Christmas Eve in 2019.

How businesses can deliver sustainably all year round

packaging
UK millennials want items delivered in recyclable packaging.

While the popularity of online spending shows little sign of waning, studies show that consumer groups do want to minimise the environmental impact of their online purchases.

Millennials are the most vocal group about buying retail goods sustainably. In particular, they want to see a decline in the use of non-recyclable packaging. Overall 73% of British shoppers would prefer to buy from businesses that use environmentally conscious packaging, with 67% saying they would rather buy from businesses that “respect the environment” generally.

Real Business spoke to Patrick Eve, Managing Director of global e-commerce returns specialist ZigZag to find out how businesses can be more ethical in their delivery processes…

“We work with smaller brands such as Spoke, Seraphine, Isabella Oliver and Baujken as well as larger ones such as Topshop, Selfridges, GAP and Superdry. Our mission is to cut the cost, waste and friction involved in the returns process whilst boosting customer loyalty and experience.

“We believe that there are a number of ways retailers can boost their production range to reduce returns and the impact that that has on our climate.

“Know your market – understand the data around your sizing and colour range to ensure that your product range is going to sell (and not be returned) in key markets and optimise production levels so that retailers don’t under or overproduce.

“Look carefully at your packaging and understand how you can maintain the unboxing and gifting experience without over packaging and look at reusable packaging and paperless returns options where possible.

“Reduce the number of styles and SKUs (stock-keeping units), that you produce to avoid overproduction and dead stock, and look at more sustainable materials such as bamboo in your products.

“Ensure you have a clear process in place for the swift handling of returns and refunds to ensure customer loyalty and get shelves back on the shelf as quickly as possible. This includes identifying channels for the re-sale, refurbishment and donation of out of season returns and excess inventory.”

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