Brand Managers Guide To Embracing Sustainability

Emmanuel ProbstMarch 14, 202314 min

Being a “sustainable brand” has different meanings to different consumers. Some brands are purposefully built around sustainability. “Oatly was born sustainable. Its very existence is the manifestation of their mission. Specifically, to help support ‘a systemic shift toward a sustainable, resilient food system’ . . . to ensure the future of the planet for generations to come.”

Some brands have a purpose that aligns with sustainability. Although denim is notorious for requiring large quantities of water to create jeans, Levi’s new collection, Water<Less uses 96 percent less water. Levi’s implements sustainable practices through its entire design and manufacturing process and is working to source cotton that is 100 percent sustainable.

Some brands must shift to sustainability. Volkswagen’s mission is to power a grand switchover to electric vehicles and has enshrined the mission in VW’s new tagline, “Way to Zero.” They aim for total carbon neutrality by 2050, with the hope of creating a sustainable production process from design concept to showroom.

What To Do Next

Implementing sustainable practices is no easy feat and often takes years. The work begins with asking three key questions to gain important context:

  • How does my audience perceive my brand in terms of its sustainable and environmentally responsible practices?
  • How prevalent is sustainability in the context of my specific markets, product categories, and competitor brands?
  • What can I implement almost immediately that will improve the perception of my brand as it pertains to sustainability?

From here explore these eleven pillars to sustainability in business today:

1. Transparency

Burned by misleading claims, data breaches, supply chain issues, and counterfeit risk, consumers expect full transparency from brands across the value chain—how they source their products, their contribution to society and the economy, and their vision for the future. Further, brands are expected to reveal information about their prices, margins, operations, and financial statements. If brands refuse to provide these details, people will hunt for information elsewhere and can end up spreading negative information about the brand.

In contrast, brands that communicate transparently on production, costs, and even sensitive information increase consumers’ perception of authenticity and drive trust as well as positive sentiment toward the brand. Some brands even move toward “radical transparency” hoping to lure back disillusioned customers. For example, H&M-owned Arket lists where its products are made and shows pictures of the manufacturing floors.

In the event of a crisis, brands must become transparent by responding immediately, admitting they are at fault and apologizing. In doing so, the brand will regain the trust of 90 percent of consumers as long as it takes steps to resolve the issue. In a similar vein, San Francisco-based fashion apparel brand Everlane gives its customers access to insights into all its costs along with detailed information on the factory where its products are made.

In the long run, brands that refuse to become more transparent about their practices will suffer as consumers question what they have to hide. Admittedly, transparency is more challenging for some industries than for others. When an eight-story factory collapsed in Bangladesh in 2013, killing 1,134 people and injuring 2,500—the deadliest garment factory disaster in history—it took several weeks for brands such as Benetton, Prada, Mango, and Wal-Mart to understand why their labels had been found among the ruins. These brands rarely owned their manufacturing plants and relied on an opaque system of subcontractors and agents known as “indirect sourcing.” This system often prevents brands from monitoring worker conditions.

This distrust extends to business leaders. A survey conducted by the Financial Times showed that just 15 percent of non-marketing business leaders saw a strong brand as important and only 20 percent saw it as very important to increase profitability and deliver future cash flow.

2. Upcycling, Recycling, And A Product’s Renewed Identity

Through recycling and upcycling, an old—and sometimes dysfunctional—product transforms into a new product with a clear past and present identity.

The past identity of the product is the starting point of its biographical story. From there, marketers can elaborate a narrative that describes the past identity of the product, which makes the product more meaningful to consumers. Note that the past function and identity of the product may not serve its current identity (for example, a worn-out airbag transformed into a backpack). Although this past identity is effectively useless, it supports the product’s storytelling potential. Scholars coined this phenomenon “past identity salience.” These researchers highlight that storytelling products do not require an abundance of details. Rather, customers notice simple cues and then create their own stories.

Marketers can use these biographical stories, instead of creating stories about the product itself or the brand’s value. For example, the Swiss brand Freitag highlights the fact that its bags and accessories are made of truck tarps; the Upcycling Deluxe store enables its customers to search for products based on what they used to be.

Repurposed products escape the stigma of the past because they have been transformed into something new. No matter how disgusting the product’s past identity might be (a recycled tire or an old mosquito net), this “past identity salience” turns into a positive contribution to the product story. Research shows that in-store revenue more than quadruples when marketing touts the past identity of a product. Online “likes” for such upcycled products more than doubled and it was chosen 12 percent more often when its past identity was prominently mentioned.

These unique, storied objects make their users feel special and allow people to create their own version of the product story.

3. Recycling

Ipsos’s studies show that consumers are concerned with the packaging of a product and the way it is disposed of when protecting the environment and adopting sustainable behaviors. That is, 56 percent of consumers are keen on avoiding products that have a lot of packaging, well ahead of other actions they could take to help protect the environment, such as not flying (43 percent) and eating fewer dairy products (36 percent).

Recycling is by far the action that people believe is the most helpful for the environment, even though the actual positive impact of recycling product packaging is much lower than avoiding long-distance flights or not having a car. Therefore, brands invest heavily in recyclable packaging, as it is the most impactful and likely the easiest sustainability-related initiative they can implement. Among the most innovative brands, Nespresso provides its users with bags to store used capsules they can ship back to stores at no charge. Also, cooking school Haven’s Kitchen offers its signature sauces in 100 percent recyclable pouches. On a larger scale, Colgate has redesigned its toothpaste tubes so that they can now be recycled in curbside bins. The brand expects all tubes in its portfolio to be recyclable by 2025, although Colgate will likely need to educate its customers on recycling the tubes after decades of throwing these tubes in the trash.

4. Compostable Packaging

No Evil Foods packages its products with fully compostable materials. The brand also partners with nonprofit organizations to reclaim plastic waste that would otherwise be landfilled, burned, or flushed into waterways. Kencko aims to make fruit and vegetables more accessible with its just-add-water mixes of freeze-dried fruit/vegetable powders. The brand has phased out conventional single-use plastics in favor of fully compostable packets (made from plants) to minimize its footprint. In a similar vein, chocolate and granola brand Alter Eco’s pouches use non-toxic ink, eucalyptus, birch, and a layer of non-GMO corn.

5. Reduce, Reuse, Recycle Programs

Beyond packaging-related initiatives, an increasing number of brands implement programs that involve their customers and generate store traffic while doing good for the environment and the local community.

In the Food & Beverage arena, Good Culture proposes cottage cheese that is good for people, the animals, and the environment by investing in family farms to elevate animal care and well-being, land stewardship, and milk quality. Also, Dash Water infuses its waters with “wonky fruits,” ones that stores and consumers would reject because they are bent or somewhat misshapen.

With its “Back to M·A·C” program, M·A·C Cosmetics encourages its customers to return containers and receive a free M·A·C lipstick. In line with this initiative, Body Shop gives away $5 gift vouchers to shoppers who return and refill their pots and bottles. Cosmetic retailer Lush rewards customers with a free, fresh face mask when they return five clean, empty pots to a store.

Patagonia’s “Buy Less Demand More” initiative offers used goods alongside brand-new products on its website.

6. The “Right To Repair” Movement

Most of the goods we buy are designed to wear out, become obsolete, and look a bit uglier and less desirable to force us to replace them. The lifespan of many consumer products is controlled through tech interventions, a practice called “planned obsolescence.”

Light bulbs, for example, could last for decades, as evidenced by the Centennial light, a light bulb that is still shining after 120 years at a fire station in Livermore, California. Such early incandescent light bulbs relied on a carbon filament eight times thicker than the more modern tungsten filament.

As light bulbs became a mass-market commodity, brands figured they could drastically increase sales and profits by making light bulbs disposable. This led to the creation of the infamous “Phoebus Cartel” in 1924, the brainchild of light bulb manufacturers Osram (Germany), Associated Electrical Industries (United Kingdom), Philips (Netherlands), General Electric (US), and La Compagnie des Lampes (France), which all colluded to cap light bulb’s lifetimes at 1,000 hours.

Planned obsolescence then cropped up in other industries and now exists in various forms, such as repairs costing more than replacing products and aesthetic upgrades that relegate the older product versions as out of date or less stylish.

Batteries in smartphones, laptops, and other consumer electronics eventually die, hard drives run out of space, or operating systems can no longer be upgraded forcing users to replace the product with a new one. One of the most obvious manifestations of planned obsolescence is in home printers, where microchips are programmed to prompt the user to replace ink cartridges that are not empty. Most recently, printer manufacturers lost cases to people claiming their “right to repair,” and in particular, the right to refill ink cartridges.

Planned obsolescence is also damaging to the environment; we dispose of over 350 million ink cartridges a year, along with rare minerals mined to power our phones and laptops and highly polluting batteries.

The right to repair movement is gaining traction. The EU, UK, and US have enacted legislation that enables farmers to repair their tractors that were locked out by technology and directed the Federal Trade Commission to prevent manufacturers from enforcing repair restrictions.

The right to repair movement stands for extending the life of products, making spare parts available, and legalizing repairs; repair cafés, Makers Labs, and community initiatives such as “The Restart Project” teach people to repair their broken electronics. The right to repair is a key tenet of the circular economy, one that relies on processes and economic activities that are regenerative or restorative by design.

7. The End Of Planned Obsolescence Is An Opportunity For Brands

The new regulations and initiatives outlined above are expected to extend the life expectancy of white goods (dishwashers, toasters, and other countertop appliances) by up to 10 years. Even brands unaffected by these regulations will need to transition, as product reviews from many publications now include sustainability ratings and influence consumer choice. To harness the end of planned obsolescence, brands should

  • Advertise the longevity of a product: Get ahead of the trend by taking a stance on longevity and sustainability, a tangible manifestation of brand purpose.
  • Develop an ecosystem: A longer product life means a greater opportunity to keep customers in a brand ecosystem and sell companion products and services, such as subscriptions.
  • Involve customers in the design process: Fashion apparel brand Freitag immerses its customers in the product creation process; customers choose the colors, materials, and patterns of their items in-store and create dummy templates the Freitag crew brings to life by sewing and riveting the materials while customers are watching.
  • Designs, repairs, and upgrades are all great means to generate store traffic. Once in-store, cross-sell and upsell other items and educate customers on how to use products.

8. Recommerce

As consumers demand more sustainable products and practices, brands must embrace and propel recommerce, the selling of previously owned products that buyers reuse, recycle, repair, or resell. Recommerce is predicted to account for 14 percent of the footwear, apparel, and accessories market by 2024, up from 7 percent in 2020. Apparel resales alone could become a $64 billion market by 2024. By 2025, recommerce is projected to grow 11 times faster than the broader retail clothing sector.

According to The World Economic Forum, clothing production has roughly doubled since 2000 and shoppers keep their garments for only half as long as they used to. The silver lining is millennials and Gen Z are value-driven consumers who prefer to buy from brands that engage in sustainable practices. Some even shop exclusively for secondhand apparel, allowing them to wear higher-quality garments they couldn’t otherwise afford while minimizing their carbon footprint and reinforcing their social credentials.

Early movers in the recommerce space were marketplaces such as The RealReal and Poshmark, along with peer-to-peer resale platforms like Depop. Name brands are starting to respond, working with logistics providers that help set up their resale market operations. As such, The Renewal Workshop takes damaged and returned inventory from retailers and turns it into renewed products that are then sold through brand-owned websites or shared marketplaces. It provides technology and logistics to its brand partners such as Carhartt, The North Face, Prada, and Pearl Izumi. Further, it accumulates data on items that flow through its system and shares this data with brands to help them improve the design and production of future clothing lines. For example, fashion brand Fendi relaunched its signature monogram print “Zucca” as it noticed a surge in demand for vintage, preowned Fendi garments in the iconic print. The same can be said of Dior’s vintage “saddle” bag, which is going through a revival 20 years after it made its debut under John Galiano.

9. The Circular Economy

Our rate of consumption has increased four-fold since 1970 while the population has only doubled. In contrast with the linear economy where we produce, consume, and dispose of goods, the circular economy proposes to extract fewer raw materials and reuse the ones we have already extracted. It is a framework to tackle global challenges such as waste, pollution, and biodiversity. This framework involves not only recycling but also remanufacturing, refurbishing, reusing, and repairing by sourcing energy through product production, distribution, usage, and disposal.

Over the next few years, consumers will likely be drawn to a circular economy for its convenience; a circular economy enables consumers to put a product back into the supply chain as a “rent, recycle, or resell” product. Today, only 9 percent of our economy is circular, making the circular economy possibly the biggest transformation companies will embark on since the Industrial Revolution.

10. Rent: It’s Cheaper

In more and more categories, people choose to rent rather than own goods. Besides our growing concern for the environment, this trend is bolstered by social media: our posts on Instagram and other platforms often depict an idealized lifestyle captured with a picture or a short video that does not require owning anything but only using it for a few minutes. Conversely, younger consumers who live through social media are hungry for newness.

Brands like Spotify, Netflix, and Zipcar have helped demonstrate the benefits of rentals as consumers have realized that there was a limited upside to owning a CD, DVD, or even a car. This new mindset is propelling the success of rental and preowned businesses such as Rent the Runway, which rents fashionable outfits, and The RealReal, which sells gently used luxury brands. In China, YCloset operates a subscription model in which customers access a range of clothing and accessories for a flat monthly fee. We will also increasingly seek “rental native” brands, created exclusively to be rented or accessed through subscription models.

11. Recommerce As A New Model For Brand Engagement

Recommerce offers new opportunities for brand engagements. Brands can extend their relationships with existing customers and foster new ones with shoppers who might not have otherwise purchased items at full price. Indeed, 50 percent of recommerce shoppers try a new brand, offering companies a chance to capture a younger and less affluent audience. As such, recommerce is a cost-effective channel to acquire new customers and extend customer lifetime value with brand loyalists.

That said, authenticating products is a major challenge for marketplaces, consumers, and brands alike. Lawsuits between secondary marketplaces and brands have outlined the issue; brands argue that these marketplaces cannot guarantee the authenticity of products without the input of brands themselves. Ultimately, this erodes consumer trust and negatively impacts items, prices, and margins.

To address this challenge, the World Economic Forum is leading an initiative that enables brands to attach a digital identifier to their products (for example, a unique QR code displayed on the label of the item). This identifier enables the brand to authenticate an item instantly as the product finds its way to a recommerce platform. This “certification” model is similar to the role Visa and Mastercard play in authenticating and securing payment transactions. In the long run, it offers a scalable way for brands to sell their items through recommerce. World Retail Congress Chairman Ian McGarrigle notes that “digitization is what allows brands to track the life cycle of a product, which is a building block of the circular economy.”

This QR code also enables consumers to learn about the provenance of products, from the farm where the cotton was harvested and the factory where the garment was manufactured. In the meantime, recommerce platforms like Grailed rely on in-house moderators to screen digital listings, while the company Mercari uses photos to authenticate items.

Overall, recommerce presents a unique opportunity for brands to address their customers’ sustainability concerns while protecting their brand identity, gathering data to inform research and development, generating additional profits, and increasing customer lifetime value. Furniture brand IKEA is one of the pioneers of recommerce. Through its “Buy Back & Resell” service, IKEA allows customers to sell back their gently used IKEA furniture in exchange for a store credit. The goal is to provide a more affordable and sustainable way to acquire furniture.

For Jennifer Keesson, country sustainability manager for IKEA US, the firm is “passionate about making sustainable living easy and affordable for the many, and want to be part of a future that’s better for both people and the planet.”

Key Takeaways

  • Consumer spending in the US is at an all-time high; goods have become cheaper and we can shop online 24/7 without having to comply with restrictive store hours.
  • We consume all these goods because marketing convinces us they make us happy, loved, and esteemed, but too many products make us feel happy one moment and miserable the next.
  • Consumers influence business decisions by which brand they buy, based on its environmental impact.
  • Brands feel obliged to talk to their sustainability agenda and show their actions through initiatives and commitments to various time frames.
  • Consumers expect full transparency from brands across the value chain and to understand how brands source their products, their contribution to society and the economy, and their vision for the future.

In the long run, brands that refuse to become more transparent about their practices will suffer as consumers question what they have to hide.

  • Recycling and upcycling transform a product; it is given a clear past and present identity.
  • Repurposed products escape the stigma of the past because they have been transformed into something new.
  • Combating planned obsolescence, the “right to repair” movement is gaining traction as we become increasingly concerned with the downsides of consumerism, including its environmental impact.
  • Brands can also address the demand for more sustainable products and practices through recommerce, the selling of previously owned products that buyers reuse, recycle, repair, or resell

Contributed to Branding Strategy Insider By: Dr. Emmanuel Probst, excerpted from his book Assemblage: Creating Transformative Brands

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