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How can sustainable sourcing reignite customer loyalty?

As increasing numbers of customers are considering sustainability within their procurement processes, Keith Tully of Real Business Rescue explores how your green credentials and business practices can encourage customer loyalty.

Sourcing sustainably consists of taking into consideration the environmental and social impact, in addition to the economic side. As ethical brands educate customers on actively selecting products which have been sourced responsibly, loyalty from environmentally conscious consumers is likely to develop into an unwavering channel of recurring income, which in turn, promotes the brand vision.

In addition to your products, consumers are interested in the quality process in motion behind the scenes to determine which brand to direct loyalty towards. Purchasing selective products and supporting handpicked brands reinforces consumer beliefs, so customers are likely to use their purchasing power to support wider environmentally friendly initiatives.

Conducting a supply chain quality check

If your production process consists of a series of suppliers or is conducted entirely in house, delve into the sustainability practices followed by each party. From the point of view of an agricultural business, this consists of how ingredients are grown, picked, packaged and the treatment of labour workers. Ensure that the production process supports itself, for example, procuring locally sourced raw foods to support the local economy. If your brand follows sustainable practices and publicises this, it is likely to be rewarded by customer loyalty.

If your business is neglectful of operating sustainably, customer loyalty is left hanging on one element – the end product. By failing to establish an emotional bond with consumers, this reduces the value of your brand identity and any distinctive brand USPs, making it easier for consumers to turn towards a competitor brand offering a similar product.

Importance of brand sustainability to consumers

A survey carried out by professional services firm, Accenture, found that over 70% of consumers said they are purchasing more environmentally friendly products than five years ago, and 81% said they expect to buy more over the next five years. This shows that consumers are turning to sustainable brands, calling for businesses to establish or reinstate commitments to operating environmentally friendly. The survey found that more than half were prepared to pay more for sustainable products which could be reused or recycled.

A host of examples reflects the change in social attitudes, such as the introduction of the plastic bag charge which is due to increase to 10p as of April 2021, preventing unwanted plastic carrier bags from entering oceans and threatening aquatic life.

Leading supermarkets, Asda, Morrisons and Waitrose have also been trialling sustainability stores consisting of extensive refill stations to eliminate packaging and promote recycling. Greenpeace, a global movement fighting climate change, called for supermarkets to cut their use of plastic packaging in half by 2025 by taking the following steps:

  • Promote naked products and concentrates
  • Eliminate single-use water bottles
  • Remove non-recyclable packaging, including laminates and films
  • Develop in-store and home delivery reuse options

In addition to government lobbying, Greenpeace works with the Environmental Investigation Agency (EIA) to assess the plastic footprint of UK supermarkets.

The environmental impact of British businesses is likely to be under greater public scrutiny, directly impacting your reputation and consumer perception. As a fraction of consumers may be more interested in product variety and price point, the remaining, including a younger generation of consumers are more concerned about the fairness of the manufacturing process. Committing to purchase products from environmentally friendly brands is a determining factor influencing buyer decisions. By forming an emotive relationship with consumers based on your sustainable sourcing practices, customer loyalty is likely to last a longer-term.

Real Business Rescue
Keith Tully

Keith Tully, Partner

Keith Tully is a partner at Real Business Rescue, a leading company restructuring, and insolvency firm made up of UK’s most renowned licensed insolvency practitioners. Keith regularly advises company directors in financial distress on the best route forward to recover their business, including how to withstand Covid-19 pressures or facilitate an efficient exit.

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