As the cost of living rises, consumers are prioritising value. But what does ‘value’ really mean, and how can retailers strategically align with customer values whilst still boosting sustainable long-term growth? In this digital feature, Retail Week explores four ways retailers are getting it right. 

What constitutes good value differs widely from consumer to consumer, and ‘value’ has come a long way from the simple price-to-quantity evaluation it once was.  

It's a careful balance of quality, choice, personal income, brand perception, ethical attributes and loyalty, and retailers operating with tight margins must navigate the difficult task of offering the combination of value, sustainability, and convenience that shoppers desire.  

And retailers do have to step up to the challenge. Whether that’s finding ways to be sustainable that don’t put further pressure on the bottom line, partnering with other businesses to drive innovation or utilising next-level tech to keep customers abreast of the latest deals, retailers are finding new ways to offer value propositions that meet customers where they are.  

4 key areas of change:

• Value by design
• Effortless ethics
• Tech-driven frugality
• Collective impact

Effortless ethics

A growing driver for consumer purchase decisions revolves around brands’ ethical and environmental business practices. Retailers that can help consumers economise whilst also living more sustainably are already tapping into this new perception of ‘value’.  

The environmental impact of brands and products can be a significant driver of loyalty, but some consumers associate sustainability with increased cost – and it’s fair to say this can be true.

A survey by GlobeScan of nearly 30,000 adults across 31 markets found that 75% of global consumers agree that environmentally responsible products became more expensive from 2021 to 2022. 

Ensuring products are produced, sold, and disposed of in the best ways for people and the planet can be a costly endeavour, and retailers continue to recognise the need for pursuing more ethical ways of doing business without impacting already tight margins.  

There are some ways that retailers can cut both costs and possibly help environmental impact. Done right, sustainable retailing can help boost profits while also giving consumers a better product, service or experience.

Promoting pre-loved

This sort of sweet spot initiative often centres around reducing waste.

Ikea launched a trial of an interesting waste-reducing concept in August 2023, with the hosting of second-hand sales. Held within the car parks of two of their UK stores, the fully booked events encouraged customers to buy and sell pre-loved home furnishings.

Free to attend and sell at, the initiative aims not only to drive footfall to stores, but also brings benefits to the community and environment, reducing waste headed to landfill.   

Turning the tide of returns

A report from the BBC Future Planet in February estimated that out of the more than 100 billion garments produced each year, 65% end up in landfill within 12 months. And returned garments themselves are often a major contributor to this figure, so for environmentally conscious shoppers avoiding returns is a must.  

Fewer returns could increase positive customer experience, too. When an order is right first time, it helps reduce pain points for shoppers – with no returns process to handle and no shipping costs to navigate, the shopping experience is simplified, and retailers can see a boost to loyalty.  

Fit-first-time tech

In fashion retail, reducing returns is a big focus and fit technology is playing a growing role in tackling this problem.

Tech firm Snap told Retail Week in March 2023 that 66% of shoppers using augmented reality to try before they buy are less likely to return their purchase, with 80% feeling more confident in what they have ordered.  

John Lewis is one retailer focusing on fit and styling technology, partnering with Zyler in July 2023 to create a virtual try-on service for its fashion rental platform.

Customers can input their height, dress size and bra size, and upload an optional headshot. The aim is to give a clear view of an item’s fit and length – improving service, driving down returns, and boosting customer experience. 

Virtual try-on is in the beauty space, too.

MAC Cosmetics has been running an online virtual try-on tool for its lipstick and eyeshadow ranges since 2020. Shoppers can enable their device’s camera to view shades in real time or upload photos of themselves or a model to test the product shades. Following use of the tool, consumers are encouraged to book a virtual one-on-one appointment with a MAC artist to support their purchase decision.  

Backing eco innovation

At the more future-facing end of the scale, Walmart is piloting making clothing out of carbon emissions captured from its supply chain.

In partnership with Rubi Laboratories, it is exploring converting carbon dioxide into fabric by spinning cellulose into viscose, lyocell and rayon. If the pilot is successful, it potentially offers a cheap and more sustainable source of raw material, with the aim of making the more sustainable choice the most affordable choice for Walmart customers.

Collective impact

Consumers are increasingly mindful that brands should be, and can be, profitable while also being more ethical and sustainable, and many are ready to act with their wallets.

In fact, 63% say they would pay more for brands that act responsibly. That’s according to Ipsos Global Trends report, comprised of 48,000 interviews across 50 markets conducted between September and November 2022. And 79% of those respondents think profitability doesn’t have to come at the expense of ethical decision-making. 

Joining forces

Retailers are now starting to take note. When it comes to the industry's stickiest challenges, the brands that are striving are the ones taking a collective approach to the biggest global and multi-layered problems.  

Take fashion as an example – Tendam, Decathlon, H&M, Ikea, Inditex, Mango and Kiabi joined forces in January 2023 to tackle textile waste. Creating the Association for the Management of Textile Waste, the aims are to help improve the management of clothing and textile waste in Spain and advancing towards a circular model. 

Promotion of more sustainable practices from big-name fashion retailers is contributing toward the antidote for the ‘throw-away’ culture – helping to ease the burden on both people’s purse strings and the planet.  

In a similar vein, home improvement retailers have also joined together to tackle its sector's big issue – Scope 3 emissions (indirect emissions that occur in the upstream and downstream activities of an organisation).

Scope 3 emissions account for more than 90% of retail’s carbon footprint and are the trickiest to address, falling outside retailers’ direct operational control. In June B&Q, Screwfix, Bunnings, and The Home Depot, among others, formed a global taskforce, with the aim of developing ways to collect and report data across the supply chain and working together with the aim to build best practices for helping to reach net zero.

Not only will this aim to provide clear environmental benefits but increase transparency for eco-conscious consumers when they are making purchase decisions.  

Another cross-sector partnership has been formed by grocers Ocado, Co-op, and Aldi joining forces in June 2023 with recycling technology company Polytag and waste management company Biffa to optimise packaging recycling.

Products from the supermarkets are being tagged, which produces real-time data on where, when, and how much packaging has been recycled, building a picture and offering insights on how to improve strategy.

Packaging features QR codes for consumers, which, at Co-op for example, will take them to a landing page on the grocer’s website detailing information about the retailer’s sustainability and charitable commitments. The QR codes, which are GS1 compliant and unique every time, have a serial number that can be used to offer customers fraud-proof rewards and secure loyalty points for supporting recycling initiatives.  

Recruiting mission allies

Dutch confectionery retailer Tony’s Chocolonely launched Tony’s Open Chain in 2019, as an initiative inviting other companies to collaborate in helping to end modern slavery and child labour.

Members commit to adopting Tony’s five sourcing principles, ensuring cocoa beans in their production process are completely traceable, with brands including Aldi, Ben & Jerry's, and Huel currently signed up as ‘mission allies’.

For the conscious consumer, membership to Open Chain clearly signposts more ethically sourced products, helping consumers to shop more responsibly.  

In an interview with Retail Week in 2023, Ben Greensmith, UK & Ireland country manager at Tony’s Chocolonely, highlighted the importance of collaboration. “At Tony’s it is our mission to lead by example and show the world that chocolate can be made differently," he said. "We want to inspire chocolatiers to act and to help us make all chocolate 100% slave free because there’s only so much we can do alone.  

“We are making a big impact. Our five sourcing principles are proven to work – in the co-operative partners we have worked with for over five years, the child labour prevalence rate decreases from 46.5% (the industry average) to 4.4%.  

“But we only source 0.5% of all West African cocoa, we can't change the whole industry alone. Mission allies joining us is the way we scale that impact and enable thousands more cocoa farmers to earn a living income.“