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Commerce Uncovers: Sustainability Sells

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It’s been impossible to miss the unprecedented rise of ecommerce in 2020 as global lockdowns sent people shopping online. It was the strongest growth for more than a decade. As a result, these increased online sales has meant more packaging and waste during a time when practices which exploit the planet need a critical overhaul. 

As a population however, a noticeable increase in people looking for climate friendly brands and solutions is seen, with 73% of UK consumers wanting to be more sustainable in 2021. With social causes and environmental impacts becoming more apparent and impactful, consumers are re-thinking where they buy and willing to spend with companies that align with their green values. For some, the cheaper cost is no longer the most important factor. 

Today’s shoppers are looking for brands that get it right and “walk the talk”, and nearly half are willing to pay a premium for brands that support recycling, sustainability and are environmentally responsible.   

Companies now need to look at how to align their values with sustainability. After receiving customers complaints, clothing brand Patagonia committed to replacing their plastic packaging with sustainable options, and documented their investigation and change process online. 

Elsewhere, global brands like L’Occitane are working towards a goal of using 100% recycled plastic in their bottles by 2025, whilst smaller independents like Serious Tissues are changing the world from the bathroom by selling UK made 100% recycled toilet rolls with no plastic packaging. 

Sustainability in ecommerce is moving from its status of being niche to essential. As consumers become more environmentally aware and take their money to ethical companies that are making the necessary positive changes, it’s time for more brands to make the better choice and show their sustainable credentials.  

To understand how brands can play a role in turning consumers’ climate change goals into reality, download and read our whitepaper Sustainable Now.

Sources 

Allure – https://www.allure.com/story/garnier-one-green-step-report-2021  

IBM – https://www.ibm.com/downloads/cas/EXK4XKX8  

Internet Retailing – https://internetretailing.net/sustainability/sustainability/uk-consumers-are-becoming-more-socially-and-environmentally-responsible–and-are-calling-out-brands-that-make-meaningless-climate-pledges-21022  

Internet Retailing – https://internetretailing.net/industry/industry/ecommerce-grew-by-46-in-2020—its-strongest-growth-for-more-than-a-decade–but-overall-retail-sales-fell-by-a-record-19-ons-22603  

Patagonia – https://www.patagonia.com/stories/patagonias-plastic-packaging-a-study-on-the-challenges-of-garment-delivery/story-17927.html  

Serious Tissues – https://serioustissues.com/  

 

 

Sustainable Now – the7stars Whitepaper

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Please download Sustainable Now – our whitepaper co-written between the7stars and Global, which helps brands understand how they can play a role in turning consumers' climate change goals into reality.

     

    Commerce Uncovers: The Range

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    This month The Range became the latest online retailer to launch their own marketplace allowing other brands the opportunity to sell to their customers. Approved sellers will receive exclusivity rights to avoid competing with other sellers on the platform but will also have to deliver items to customers directly and manage returns process.  

    We often hear about the rapid increase in DTC retail however the stats show that marketplace shopping is still miles ahead. In the UK 57% of shoppers now buy from marketplaces, compared to the 13% who order directly from retailer websites. This was accelerated further by the pandemic when between March and June of 2020, the average online shopper made 11 purchases from online marketplaces but just 3 from an online retailer* 

    Whilst marketplaces like The Range are nothing new (*cough cough* Amazon) their existence gave many brands a lifeline during lockdowns as traditional retail outlets closed, but at what cost? Fees vary massively for brands looking to sell on marketplaces, The Range reportedly charge between 7-20%. When you factor in the cost of delivery, returns and fulfilment this doesn’t leave much profit margin for sellers. 

    Sellers also need to be careful with their choice of marketplace. Whilst onboarding as many as possible might seem like a logical step, these marketplaces have different audiences in the same way as media does, so they need to make the right choice. This way they can fully optimise their marketplace homepage to be an extension of their brand.  

    For those retailers such as The Range who have pivoted towards marketplaces, there is an opportunity for a huge additional revenue streamNot only can it provide a bigger pull to new and current customers to get more items in one place, but there is also advertising revenue to be made. Take ASOS as an example, they started selling media space within their listings to drive users to their most “strategic brands” but with job vacancies for programmatic execs it’s clearly something worth investing in.     

     

    *Source: E-Commerce News  

     

     

    Commerce Uncovers: The rise of buy now pay later

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    It is recently reported that John Lewis is about to launch its own buy now pay later (BNPL) product as they respond to consumers thirst for more convenient and easier ways to pay. With talk of M&S following suit, BNPL schemes have been the fastest-growing online payment method in the UK last year and are predicted to account for 10 per cent of UK e-commerce spending by 2024.

    The agreements, provided by firms such as Klarna and Clearpay, are a flexible payment method that allows customers to make a purchase when they may not have the funds at that time. They can then pay for their goods flexibly – and interest-free – either within a 14-day window, 30-day window or in instalments.

    Klarna recently has raised $1billion (£720million) of new funds amid rapid growth. The Swedish firm reported to be valued at $31billion making it the most valuable fintech firm in Europe.

    Greater regulation is not far behind, but that will only bring further consumer confidence in the payment mechanic.

    Shopping cart abandonment is one of the biggest issues that online retailers still face, with a lack of payment options being one of the key drivers. The payments landscape however, is evolving at pace, responding to consumers’ drive for convenience and the ability to have more flexibility in their purchasing decisions.

    Retailers need to think about what payment methods they want to integrate to give their customers the right choice.

    What else we’ve uncovered:

    You Tube is testing the ability to shop directly through videos, as it creates a shoppable platform.

    Amazon quietly buys a competitor to Shopify as battle hots up.

    Shopify to introduce Shop Pay to Facebook and Instagram to help businesses capitalise on social commerce

     

    Sources

    Econsultancy – https://econsultancy.com/stats-roundup-coronavirus-impact-on-marketing-advertising/

    Internet retailing – https://internetretailing.net/mobile-theme/mobile-theme/almost-a-fifth-of-the-uks-population-have-used-buy-now-pay-later-as-they-shift-away-from-credit-cards-and-towards-mobile-22843

    This is Money – https://www.thisismoney.co.uk/money/markets/article-9333191/John-Lewis-offers-online-buy-pay-later-scheme.html

     

     

     

    IAB Gold Standard: Supporting digital growth with digital responsibility

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    UK digital ad spend fell 5% YoY between Jan -June 2020, a reflection of the impact that the global Covid-19 pandemic has had – however, digital consumption has surged in the wake of shifting behaviours, with video ad spend rising 5.7% in H1 2020. This drop-in ad spend is not representative of time spent online, which hit record levels as people turn to digital sources for news, social contact and entertainment. 

    Supporting the growth of ad spend continues to be paramount for those in digital media, but there are mounting concerns that, while spend increases, the quality of digital buying practice is being neglected. As such, the7stars has a keen focus in 2021 and beyond on maintaining operational excellence and supporting initiatives like IAB Gold Standard.

    IAB’s Gold Standard Certification aims to improve the digital advertising experience for all users, by combating ad fraud and safeguarding brands through safety protocols. With IAB reporting increased digital consumption, it is ever more important to minimise risk to brands and ensure quality is maintained. 

    Accordingly, the IAB has published its Gold Standard 2.0 for digital media planning, a series of best-practice initiatives that will keep digital growing in the years to come. Guidance ranges from supplier-side tech implementations to guides for creatives to ensuring brand safety. The steps include:  

    Reducing fraud through the ads.txt and app-ads.txt initiatives: Ads.txt is a mechanism on websites that allows the owners of content to declare who is allowed to sell inventory, with app-ads.txt the extension of this mechanism to support app inventory. It means that when we see ads for sale programmatically, we can be sure that the ad we are buying is legitimate, which in turn goes some way to stopping rogue traders profiting from counterfeit inventory.  

    Encouraging suppliers to implement Sellers.json and OpenRTB Supply Chain Object: The Sellers.json file will effectively enable SSPs and exchanges to list their authorised reseller partners, along with seller ID. The SupplyChainObject lets buyers view what sellers and resellers have been involved in during a bid request. This will build confidence for buyers and DSPs to use the open exchange having validated each reseller involved in the process.  

    LEAN Principles from the Coalition for Better Advertising: LEAN is an acronym used to represent best practice in terms of digital ad specs: Light file sizes and strict controls on data; Encrypted; Ad Choices logo; and Non-intrusive. Together, this adds up to a better user experience: ads load faster, users know why the ad has been served to them and ads are non-invasive.  

    Never use the 15 bad ads: There are 15 ad formats (formerly 12 with the addition of 3 new short-form video formats) that shouldn’t be on any media plan – these include pop-ups and auto-play sound-on video.  

    Working with TAG (Trustworthy Accountability Group): This is a series of principles to follow that will secure a safer environment for online advertising placements by certifying vendors and content.  

    All in all, these steps work towards making digital ads safer for brands to buy and better for the users they are being served to. Essentially, the key messages are around due diligence – being sure of the ads you are buying – and perspective – considering whether, as a user, you would be happy if you were served this ad in this manner. 

    Will The Experience Economy Rebound In 2021?

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    The7stars’ latest white paper, The Experience Economy Rebound, details the road to recovery for the travel, hospitality and leisure sectors; industries which were placed on life support in 2020 as restaurants closed their doors and events were cancelled, rescheduled, and cancelled again. The past year has told a tale of two halves when it comes to financial stability. While millions were placed on furlough and faced uncertain job prospects, others built up savings. According to ONS data, between April and June 2020, households saved an average of 29.1% of their income – smashing the record set three decades ago.

    However, personal finances are not the only factor likely to impact the rebound of the experience economy. Even as the vaccine rollout progresses, many remain reluctant to indulge in experiences until they are assured of their safety. Following the government’s announcement of the roadmap for de-escalating lockdown, Lightbox Pulse research found the emergence of three distinct groups, each of which will be crucial to an economic rebound in 2021. 

    The most lucrative of these groups is the Experience Enthusiasts, comprising 28% of the population. This group is desperate for a big summer and is willing to splash savings to achieve that. Experience Enthusiasts worry less about coronavirus and are comfortable with visiting virtually every location as soon as they reopen, including airports; making it a matter of when, not if, they book their next holiday. With this group so willing to engage in experiences, the time for brands to convert their enthusiasm into sales is now.

    Around half (49%) of Brits are Pragmatic Participators. While they are cautiously optimistic of a return to normality, members remain to be convinced. Their summer will initially revolve around domestic trips – though they could be swayed if vaccine passports become the norm. Negotiating with this group will undoubtedly prove challenging for brands; however, they are there for the taking. By boosting confidence through cancellation guarantees and flexible rebooking, this group’s long-term potential can be unlocked.

    The Social Sceptics will be the toughest for brands to convert.  Social Sceptics are unconvinced of the safety of travel and are nervous about booking until they are assured their plans will go ahead. This group is keeping it local in 2021 through smaller, family-oriented experiences. This does not mean, however, that brands should simply ignore them: rather, through targeted messaging in trusted sources, they will be persuaded to eventually return to the experience economy. And with many in this group potentially saving up disposable income two years running, the onus is on brands to be at the forefront of their future plans.

    Come the end of 2021, the ‘winners’ of the experience economy will be those brands that not only recognise the varying financial challenges facing the nation, but also react to the nuances in how each of these groups is willing to participate in travel and experiences.