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January 28, 2020

Transparent supply chains key to navigating UK retail slump in 2020

Retailers are being urged to provide transparency in their supply chains as a new study indicates sustainability will be a key influencer in purchasing decisions during 2020.

By Beth Wright

Retailers are being urged to provide transparency in their supply chains as a new study indicates sustainability will be a key influencer in purchasing decisions during 2020.

Data and analytics company GlobalData has revealed conscious consumers will pose the biggest threat to clothing and footwear retailers in 2020.

When asked about their intentions for January, 19.2% of 2,000 UK consumers surveyed said they planned to spend less than average on retail products with 48.9% of them saying they are making a conscious effort to buy less.

“Although some shoppers will struggle to keep up this mindful mentality past January, the shift away from spending on non-essential retail products is set to continue throughout the year as consumers prioritise spend on holidays, activities and meals out, and especially as sustainability concerns seep into their consciences,” says Sofie Willmott, lead retail analyst at GlobalData.

“With sustainability becoming a bigger consideration for more consumers, the easiest way they can reduce their impact on the environment is by not buying anything new. Buying second-hand items or reducing the number of clothing and footwear products they purchase is a win-win for consumers who are focused on spending their disposable income wisely while also acting in a sustainable way, but these shifting shopping habits will not help struggling retailers in what is already a challenging and highly competitive trading landscape.”

Warning signs were evident in Primark’s first-quarter results (for the 16 weeks to 4 January 2020) released this month with the largest UK clothing retailer reporting a marginal decline in UK like-for-like sales, indicating that volume growth will be difficult for clothing retailers to achieve in 2020.

Willmott says it is vital that retailers provide transparency in their supply chains to navigate the challenge. Years of building a production process with an aim of providing fast fashion at accessible prices will be difficult to transform into an environmentally sustainable operation at first but retailers should clearly convey the steps they are taking, she urges.

“A brand’s positive environmental stance must be communicated through aspects that customers can interact with. For example, & Other Stories offers 10% off a purchase when you bring back an empty beauty container and H&M has garment collection bins in-store which customers can donate a bag of clothes to and receive a GBP5 voucher. 

“Sustainable clothing pioneer Reformation has taken it to more of an extreme giving their customers the option to purchase ‘climate credits’ such as a credit for an international flight for GBP22 which offsets the carbon emissions.”

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