Why sustainability matters in retail:
Sustainability has been a hugely important social topic for many years, and it continues to impact our daily decisions – including where we spend our money and which brands we stay loyal to.
According to multiple research studies, climate change is perceived to be the biggest challenge of our generation. Public concern for the natural environment has risen globally by 16% since the pandemic, making many of us re-evaluate our consumption habits. However, the call for climate action has been prominent for a long time. The market for ethically sustainable goods has risen almost fourfold in the last 20 years. Many businesses are adopting an accountability approach to sustainability to reduce their carbon footprint and strengthen customer trust.
A survey conducted by the US Cotton Trust Protocol found that 52% of respondents stated that consumer demand for sustainability was the fundamental component driving change within the retail industry. An online study discovered that the desire and expectation for eco-friendly retail were prominent across most age and gender groups. This suggests that sustainability does not only concern the younger generations (traditionally associated with Millennials or Gen Z) but all customer segments collectively. This highlights how important it is for shopping malls to consider how best to meet these changes and begin their sustainable journeys…
How does sustainability impact customer loyalty?
A study conducted to ascertain the impact of sustainability on consumer behavior revealed that the rising cost of living, coupled with fewer choices due to changing social and economic circumstances, has made consumers adopt more sustainable spending habits. They found that 53% of customers choose to invest in durable products that could be reused, recycled, or repaired to spend less.
In addition, the same study found a direct correlation between sustainability and brand loyalty. It’s no news that customers are becoming increasingly proactive in pursuing a more eco-friendly lifestyle, which is significantly changing how they interact with retailers. More often, consumers choose to engage with brands that have ethical or environmentally sustainable practices and values. Studies show that 50% of consumers are more likely to buy from a brand openly committed to sustainable practices, while 28% would avoid brands that could not meet these expectations. It is clear that customer expectations have a direct impact on customer loyalty. 88% of consumers say they will be more loyal to a brand that supports social or environmental issues.
The facts speak for themselves – in order for retail destinations to support rising consumer expectations. To drive customer engagement, they must align themselves with sustainable practices by implementing green loyalty initiatives within their shopping malls.
Why you need green loyalty!
Green loyalty programs can be a great way for shopping malls to incorporate sustainability, meet growing customer expectations and build brand engagement.
Green loyalty can be as simple as incorporating or encouraging sustainable practices. For example, customers can access charity donation points, recycling banks, and ‘re-fill’ sites where shoppers can bring their unwanted items and repurpose or reuse them in exchange for rewards. Remember, the key to encouraging customers to go green is offering them an easy and convenient way to participate!
These green initiatives demonstrate to your customers that you align with their core values. This is a crucial component in building an emotional connection with your shoppers. Naturally, customers feel more confident and engaged with retailers they deem to be transparent and responsible. Implementing a green loyalty program within your shopping mall can help drive purchase intent amongst your customers and build brand advocacy. By incentivizing sustainable behaviors, shopping malls can engage their customers by inserting elements of gamification into their retail journey. For example, consider using a mobile app to update customers on their progress and highlight how close they are to their next reward (e.g. 3 Donations= Reward).
Global retailers are already seeing the impact that green loyalty can have. Brands such as Boots, H&M, MAC cosmetics, Kiehls, IKEA, and many others have joined the eco-revolution. Their sustainability initiatives allow customers to return empty items for free products, money back, or exclusive discounts. These are great examples of how offering green rewards for sustainable behaviors motivates customers to engage with your brand!
Examples of green loyalty initiatives:
At Coniq, we know how sustainable initiatives can impact customers. Apsys Beaugrenelle Mall rewarded members with ten loyalty points for every plastic bottle they brought to the shopping center. The client then used the donated plastic bottles and up-cycled them into an impressive art sculpture. The loyalty campaign was a great success, and the client saw a 23% increase in transactions in just one month. The campaign drove 28% of new loyalty member sign-ups and generated 1373 visits to the shopping mall during the promotion. These results highlight how green loyalty can have a substantial impact on the way that your customers interact with your shopping mall.
Another way to engage your customers is by creating unique green experiences. For example, offer customers the opportunity to plant trees, join an allotment masterclass or even try their hand at gardening! Offering an experiential retail experience gives all customer segments a chance to do something fun while doing their bit for the planet. Moreover, your customers will be more likely to resonate with and return to your mall if you offer them an experience unavailable elsewhere.
A Coniq client pioneered a green initiative focusing on planting trees for one month. The program planted trees every time a customer made a transaction, referred a friend, or downloaded the app. By the end of the month, a total of 5,000 trees had been planted.
Green loyalty programs have mutual benefits as customers earn exciting rewards while feeling good about their environmental impact. Shopping malls can boost brand loyalty by creating a community of brand advocates. Research shows that shoppers referred by a friend or family member are known to have a 3-5 times higher conversion rate, with a 16% higher lifetime value. So, green loyalty is definitely something worth investing in!
What can green loyalty bring to shopping malls?
Green loyalty programs can increase customer footfall by encouraging customers to shop in-store. If a shopper recycles and instantly receives the reward, they can redeem and spend this reward while they are in the mall. As a result, the frequency of store visits increases and ultimately drives sales within your shopping mall. Incorporating green rewards and sustainable programs as part of your environmental, social, and governance (ESG) strategy in your shopping mall can boost your retail destination’s reputation and look great to potential investors.
When it comes to sustainability, shoppers often see ‘greenwashing’ marketing campaigns. They speak of sustainable projects without a clear understanding of what they mean or how they are actioned. One of the ways to demonstrate genuine commitment and build trust with your customers is by putting words into action. A green loyalty program is a great place to start! By encouraging your shoppers to complete eco-friendly tasks in exchange for rewards, you can highlight your commitment to the cause. You can also show customers the changes happening in real time while engaging shoppers with exciting offers unavailable elsewhere.
More ways loyalty can help you go green:
- People partnership: There are many ways to encourage your shoppers to go green and increase brand loyalty. Why not try partnering with a sustainable organization or charity? This can help improve your mall’s visibility and simultaneously grow your eco-community. In turn, you can drive traffic back to your shopping mall, enhance your social engagement and build your brand image! What’s not to like?
- Go digital: Another simple way to reduce your carbon footprint is to go digital! Physical cards can be unreliable, costly, and polluted. Therefore, switch to digital solutions with gift cards stored in virtual wallets or mobile apps. This way, you can collect and access unlimited data using a more cost-efficient, eco-conscious, and convenient mechanism for customer rewards.
- Green transport: A great way to start your customer’s green experience is by rewarding sustainable practices before the customer walks through the door. Try increasing the number of electric parking slots or rewarding customers and employees for using cycle-to-work schemes and public transport.
- Support sustainable: Show your support by sourcing sustainable products and materials. Investing in recyclable and compostable options is a great way to reduce consumption. Cut the cost of production and practice what you preach!
- Clean energy: Consider eco-friendly alternatives to fuel your mall’s electricity. Implement solar panels, use energy-efficient LED light bulbs, or recycle wastewater to replenish indoor plants and outdoor green spaces.
To conclude, it is clear that economic and inflationary pressures, the impact of climate change, and Covid 19 have changed how customers shop. Now, more than ever, consumers want to reduce their overall expenditure, lower their consumption, and adopt sustainable practices. As a result, retail destinations must incorporate sustainability to meet growing customer expectations and nurture their customer relationships. That is why we have created this list of top tips to help start your mall’s sustainability journey…so why not try for yourself?
