Retail Disrupted E3: Brand Choices
The third in a special series of podcasts reflecting consumer insights from Bigeye’s national study, Retail Disrupted. In this episode, we identify the factors that most influence consumers’ brand choices and look at COVID-19’s impact on people’s attitudes toward recycling, upcycling, and sustainability. To consider what the findings mean for retail and direct-to-consumer marketers, we’re joined by experts Ksenia Newton, Chantal Schmelz, Michael E. Smith, and Brandon Frank.
Adrian Tennant: Welcome to the third in a special series of podcasts, accompanying Bigeye’s national study, Retail Disrupted: What Shoppers Want From Brands Today. Coming up:
Chantal Schmelz: People are much more aware of the power they have as a consumer and that they need to use that wisely.
Michael E. Smith: There will also need to be an increased emphasis on the reduction of waste from suppliers and on domestic recycling ventures.
Brandon Frank: Refillable packaging has been a really trendy category to look at.
Ksenia Newton: The pandemic has prompted many consumers to reassess their lifestyle, and in particular, their shopping behavior as well. So I think there is a new trend.
Adrian Tennant: You’re listening to a special episode of IN CLEAR FOCUS, fresh perspectives on the business of advertising, produced weekly by Bigeye. Hello, I’m your host, Adrian Tennant, VP of Insights at Bigeye. A full-service, audience-focused creative agency, we’re based in Orlando, Florida, serving clients across the United States and beyond. Thank you for joining us. In August of this year, Bigeye conducted a national survey of over 1,500 shoppers aged 18 to 55 that reveals how shoppers’ behaviors have changed during the pandemic, and what they want and expect from brands today. In today’s podcast, we’re going to explore some of the data points that reveal which factors influence their brand choices, we’ll discuss consumers’ attitudes toward recycling, upcycling, and sustainability, and consider what the findings mean for retail and direct-to-consumer marketers. Last year saw a surge of activism among Americans looking for ways to advocate for the issues that matter most of them. It’s estimated that around 26 million Americans participated in demonstrations over the death of George Floyd and others in 2020, making Black Lives Matter the largest movement in the country’s history. Many retailers and brands showed support for the movement on social media, with Blackout Tuesday, a collective action to protest racism and police brutality. Today’s socially conscious consumers buy from companies that donate a portion of their proceeds towards a certain cause or whose business practices support a particular group or value. Generation Z, those born between 1996 and 2012, and Millennials or Gen Y, those born between 1980 and 1995, are increasingly demanding that companies take a stand on social issues – with over half of these younger shoppers more likely to purchase from a store if they know it supports a cause or community they care about. One way that socially conscious consumerism is changing the retail industry is through re-commerce: the selling of pre-owned or pre-used products online. Depop is the fastest-growing peer-to-peer social shopping app and around 32 million items are available. You can think of it as a hybrid of eBay and Pinterest. Users scroll through listings of used items, including clothing and accessories from luxury brands, such as Chanel and Hermes, and they can buy, sell, or donate products. The resale market is growing 11 times faster than traditional retail, especially among younger shoppers. These consumer behaviors are expressions of the so-called “circular economy”, that prioritizes the use of sustainable materials while keeping products in circulation for as long as possible. The concept is not new. In 1961, Kenneth Boulding first wrote about the economy of “the coming spaceship earth”, where he described how our planet’s limited resources must be conserved. With the effects of climate change being felt across the globe, consumers increasingly expect companies and brands to choose sustainable materials, reduce wasteful packaging, and minimize their carbon footprints. Data points from Bigeye’s national study reveal how widespread recycling and upcycling behaviors are, and highlight key differences that exist between generations of consumers.
Adrian Tennant: A HuffPost article, published in 2016, found that every American on average throws away around 81 pounds of clothing each year, even though 95 percent of it could be reused or recycled. Today, that’s changing as we see more interest in the circular economy, as well as consumers disenchanted with the speed at which brands and governments are addressing climate change. London-based trend forecaster The Future Laboratory has dubbed an emerging group of consumers “Regenizens” – using technology, communities, and entrepreneurship to further entrench the post-ownership ideal. But how widespread are these behaviors? In Bigeye’s national study, across all respondents, approaching two-in-every-five report buying previously owned clothes or accessories from a thrift store, 38 percent, and donating items of clothing to a charity, also 38 percent, in the past six months. Around one-fifth have bought from a store specializing in pre-owned or vintage clothing and swapped clothes with a friend. Gen Z respondents are the most likely overall to engage in these activities with Gen Y being very similar in its behavior to Gen Z. Gen X, made up of respondents born between 1965 and 1979, is the most likely to have donated items of clothing to a charity, such as Goodwill, at 45 percent – compared to 27 percent of Gen Z. But at just 4 percent, Gen X is three times less likely to have used an app to swap clothes with other people than Gen Z, among whom 12 percent report doing so. Respondents identifying as female are more likely than other gender identities to engage in these activities, with the single exception of buying clothing items on eBay, where males are very slightly more likely to do so at 13 percent. Respondents identifying as Hispanic or more likely than non-Hispanics to engage in eco-conscious activities with the single exception of donating items to a charity, where non-Hispanics are 13 points more likely to do so at 41 percent. However, Hispanic respondents are 13 points more likely to have bought from a store specializing in pre-owned clothing at 31 percent, compared to 18 percent of non-Hispanics. Earlier this year, I asked Ksenia Newton, a content strategist at Brandwatch, whether Gen Z and Millennials’ adoption of pre-owned, vintage, and thrift store clothing reflects a shift in consumer behavior away from so-called “fast fashion.”
Ksenia Newton: While Gen Z and Millennials were mostly concerned last year about their health and jobs, both generations remain deeply concerned about the environment still. So that’s one thing. And also I think the pandemic has prompted many consumers to reassess their lifestyle, and in particular, their shopping behavior as well. So I think there is a new trend. People are reassessing how they shop. And I think fast fashion can co-exist with secondhand shopping, but I also do think that a lot of people are reassessing really looking at it and into maybe when it comes to fashion specifically, maybe looking into better fabric, a more ethically produced fabric, and something that they can wear over a longer period of time or reuse their existing items. I do think it’s a new trend.
Adrian Tennant: This was a topic I also explored with Chantal Schmelz, a strategist and marketer based in Zurich, Switzerland. Chantal is working with an innovative textile startup called Yarn-to-Yarn that addresses recycling in a unique way.
Chantal Schmelz: Probably a lot of people already know cradle-to-cradle as a concept of [the] circular economy and Yarn-to-Yarn is kind of the adaption to the textile industry where you use materials that can either be easily separated, once clothes are being returned after use. For example, you need to be very careful what patches you sew onto your clothes, what color imprints you use and what tags you use, what buttons, what zippers because they need to be, ripped off before the reuse can start. And also like with cradle-to-cradle, it’s essential that you don’t mix raw materials in a way that they cannot be separated anymore. So you don’t glue it, you nail it – because then it can be separated. And with Yarn-to-Yarn, you use fibers that can be separated chemically or with bio enzymes easily. So that in the end you have cotton and polyethylene fibers, as raw materials in the end. So you can have new yarn created out of the raw materials easily. So it’s the same process as cradle-to-cradle for the textile industry. And at the moment, it’s based on a bio-enzyme process that allows separating cotton and polyethylene fibers, so that they can be totally 100 percent reused at the end.
Adrian Tennant: I asked Chantal why she thought Gen Z and Millennials are expressing greater interest in re-commerce and recycling than older generations.
Chantal Schmelz: I think the awareness of climate change and sustainability issues have become widely known, especially amongst younger ones who have the perspective of living way longer than we will be on this beautiful planet So they see what’s going on – like old-fashioned industry and they see that they need to change their behaviors now. And I also think it’s especially in these ages – 18, 26, in between – they haven’t formed their consumer patterns so much, until then as probably you and I already did. So it’s going to be much harder to turn around our consumer patterns than with the younger generations. So I think they are the early adopters, in that case, reconsidering the power they have as a consumer, to make an impact on the industries. Because there are bigger brands who now recognize that if they want to keep a stable consumer base in the future, they will have to adapt to those trends now and come up with re-commerce possibilities, products, solutions, to go with this development.
Adrian Tennant: I asked Chantal if she was seeing a rejection of “fast fashion” in Europe.
Chantal Schmelz: I would say that we see public outrage whenever there’s like a new media article or report out. For example, a few months back there was this report on Amazon destroying all returns because it’s too much of an effort to reuse them. So if they’re returned, they’re just destroyed. So huge public outburst. However, living in a high-price country [Switzerland], the temptation is to still smuggle in some of the fast fashion into your shopping, because otherwise, you will only buy one shirt per year! I think there’s still a long way to go before there’s you could say it’s a rejection of fast fashion. I think people are much more aware. They’re more aware also of the power they have as a consumer and that they need to use that wisely. But rejection? I wouldn’t say yet.
Adrian Tennant: Finally, I asked Chantal in what other ways she sees socially conscious consumerism influencing brand marketing.
Chantal Schmelz: I think, at the moment, because there are these public outburst reactions blaming a lot of fashion brands, but also other brands like grocery stores have already picked up on that trend – implementing specific labels on the products, showing CO2 impact of production from this product to kind of give the impression that they also care. And to make it easier for you as a consumer to make a wise decision.
Adrian Tennant: It’s not just Gen Z and Millennials that are interested in re-commerce. In a recent interview, applied cognitive neuroscientist Michael Smith, who’s the author of the book, Inspiring Green Consumer Choices, shared an anecdote about his son who belongs to the next generation, dubbed Alpha.
Michael E. Smith: One time over the summer, I took my son – who had just graduated from middle school – into a thrift store, and he had never been acquainted with the context. And he was thrilled by it to learn that he could get a perfectly good piece of clothing for a huge discount, relative to, department store prices. And he just liked the thrill of being able to repurpose goods.
Adrian Tennant: Michael pointed out that there’s one type of re-commerce that most of us have direct experience with already.
Michael E. Smith: You know, we don’t really think of it very often as, a resale organization when we think of things like clothing and whatnot. But I was struck recently by something we have long taken for granted as a somewhat unsavory task. But somewhat of, an iconic form of re-commerce. And that is the buying and selling of used cars, a really big-ticket item that happens to virtually every car over the course of its lifetime. And, you know, traditionally it was hard to learn about a vehicle’s history, its reliability, its current mechanical status. It was hard to compare between alternatives because they weren’t really comparable. And one didn’t really trust the claims of the seller. And, you know, beyond that negotiating fair pricing, was frequently a nightmare, at least on the consumer side. but in the US one of the biggest re-commerce operations to emerge in recent years is the company CarMax, mainly an internet-based platform, with a gigantic inventory. And they worked to increase trust in transactions by being easy to shop from, by de-risking the purchase by making it easy to return a car. And by being trustworthy and transparent about the vehicle’s history, they document it online for you to check, and as well as its current mechanical status. And by eliminating the pain of price negotiations, they’ll tell you the price you can decide if you think it’s fair, based on all your research. And you can take as much time as you want to do that. As a result, they’ve been hugely successful in the marketplace since their inception. I think other e-commerce operations could learn a lot by studying them.
Adrian Tennant: Let’s take a short break. We’ll be right back after these messages.
Marissa Martin: I’m Marissa Martin on Bigeye’s operations team. Every week, Bigeye’s podcast IN CLEAR FOCUS explores how consumer behaviors are evolving as a result of COVID-19. From the influence of Generation Z, with its interest in social and environmental issues – to the fast-growing Hispanic market and the opportunity it presents – Bigeye interprets signals from primary and secondary research, identifying the trends driving consumer spending today – and those that will have the greatest impact tomorrow. If you’d like to put Bigeye’s research-backed, data-driven insights to work for your brand, please contact us. Email email@example.com. Bigeye. Reaching the Right People, in the Right Place, at the Right Time.
Adrian Tennant: Today’s shoppers are more informed, connected, and demanding than ever before. To examine how the rise of e-commerce during the pandemic has disrupted the retail industry, Bigeye recently conducted a national study with over 1,500 consumers. Our exclusive report, Retail Disrupted: What Shoppers Want From Brands Today, reveals that while people enjoy the convenience of online ordering and home delivery, many still prefer to shop in physical stores. But their expectations of merchandise selections, in-store technology, and customer service are all heightened. To understand consumers’ new shopping behaviors, and mindsets – and what they mean for retailers, direct-to-consumer marketers, and traditional brands – download the full, complimentary report available now at Bigeye.agency/retail. Retail Disrupted: What Shoppers Want From Brands Today.
Adrian Tennant: Welcome back. You’re listening to Retail Disrupted: What Shoppers Want From Brands Today. So which factors are most likely to impact personal brand choice? In Bigeye’s national study, for almost nine-in-every-ten respondents, the most important factor is the visual appeal of the product. Eighty-nine percent say this is extremely, very, or somewhat important to them. Almost four-in-every-five shoppers say that a brand’s policies and stances related to the environment and sustainability are important – 79 percent – with similar percentages citing whether a brand is based in or manufactures its products in the USA (78 percent), and whether a brand is local to their community or a small business, (77 percent). Respondents identifying as male are three points more likely than females to say that a brand’s policies and stances relating to the environment and sustainability are important to their choices, at 81 percent, while all of those identifying as nonbinary or other gender select whether the packaging is made from sustainable materials or can be recycled or upcycled. Let’s take a closer look at how brand choices are influenced by the generation to which respondents belong. Among Gen Z, 48 percent think that whether the packaging is made from sustainable materials or can be recycled or upcycled is extremely or very important. Forty-five percent think a brand’s policies and stances related to race, gender equality, or LGBTQIA+ issues are extremely or very important. Now among Gen Y, 44 percent think a brand’s policies and stances related to the environment and sustainability are extremely or very important. Forty-three percent think a brand’s policies and stances related to race, gender equality, or LGBTQIA+ issues are extremely or very important. And among Gen X respondents, 46 percent think that whether a brand is based in or manufactures its products in the USA is extremely or very important And 40 percent think a brand’s policies and stances related to the environment and sustainability are extremely or very important.
Adrian Tennant: When it comes to physical retail stores, refill, recycle and reuse top Gen Z’s wishlist. The so-called Regenizens’ eco-conscious behaviors are reflected in our study results with over one-quarter of Gen Z respondents wanting department stores to make it easier to refill reusable containers (26 percent), including those used for beauty and skincare products. This is Gen Z respondents’ most important consideration, five points higher than Gen Y and eight points more than Gen X. Respondents identifying as Hispanic are four points more likely to select this, at 24 percent, than non-Hispanics. Gen Z are also more likely than other generations to want the ability to drop off recyclable waste so it can be upcycled into new products, 25 percent. I recently spoke with Brandon Frank, the CEO of Pacific Packaging Components, and an expert on sustainability, clean beauty, and recycling. With over three-quarters of all respondents in our study saying that whether a product’s packaging is made from sustainable materials or can be recycled or upcycled is important to them, I asked Brandon how brands have been responding to these changing consumer attitudes.
Brandon Frank: The selection of glass and aluminum has continued to be popular and that when plastic needs to be used, the most sustainable option and that most people are going toward is to use the highest percentage of post-consumer recycled resin as possible. We know that there’s a lot of bio-based resins and other, biodegradable additives and things like that, but we follow the sustainable packaging guidelines. And we really say that you know, if you’re going to use plastic, use the highest percentage of PCR that you can. There’s a lot of supply chain issues with that right now because the largest companies in the world are buying up most of the highest quality PCR, which leaves a lot of large middle and small brands struggling to be able to meet MOQ and price points. but the industry is responding.
Adrian Tennant: I asked Brandon if he sees any emerging trends in recyclable and sustainable packaging materials.
Brandon Frank: Refillable packaging has been a really trendy topic or category to look at. There haven’t been a lot of examples where consumer buy-in has been at the same level of the excitement around the packaging, which basically means its sell-through hasn’t been as strong as everyone thought. But I think consumer behavior around refillable containers in their homes, trying to reduce the amount of packaging, will continue to be one of the driving themes when it comes to packaging use and brands making decisions based on that as well. So that may materialize – instead of having a bunch of six-ounce, eight-ounce soap bottles that we’re just selling – is that maybe there’s an extra-durable plastic one, or a glass one, with a flexible pouch, with a refillable spout that can be refilled – that glass container – six or eight times. Or tablets to where you drop in a tablet, add water, and kind of mix it up. And now you’ve got a concentrate. So brands really are trying to find ways to just reduce the amount of packaging that they’re putting out there in the world – and consumers are responding to that.
Adrian Tennant: I asked Michael Smith which consumer behaviors, newly adopted during the ongoing COVID pandemic, he expects to see more of in the future.
Michael E. Smith: Well, this is somewhat speculative but I think confronting the fact that we’re living in a world with significant price inflation at the retail level is probably not going to change anytime soon. And part of that is just because prices have historically been artificially depressed because they don’t account for environmental impacts. And because we have been largely off-shoring the pollution and waste associated with the creation and disposal of those products – a strategy that has become obvious as less and less tenable. So we’re going to have to learn to incorporate the costs of consumer items – the true costs – including the environmental costs into the price for those items. And as a result, prices inevitably are going to go up. I think there will also need to be an increased emphasis on the reduction of waste from suppliers, and an increased emphasis on domestic recycling ventures. Again, largely because we no longer can effectively depend on other countries to import our trash. They don’t want it. It’s not that profitable for them, and we’re getting stuck with it. So, you know, the retail sector has to learn to work with domestic recycling companies, to better match their packages and ingredients and whatnot with the capabilities of the domestic recycling sector. Just as evidence of that emerging trend, the biggest company in the collection and of waste, Waste Management, Inc., since the beginning of the pandemic, their stock prices shot up about 60 or 70 percent and their revenue has exploded. Because they have competitive advantages at managing waste at scale: disposing of what needs to be disposed of, extracting what’s valuable from that waste stream, and even harvesting biofuels like the methane that landfills generate – and using that either for selling or for running their own fleet of vehicles. So it’s integrated organizations like that that are domestic who are going to have the upper hand, I think, going forward and addressing some of these issues. And you know they have the scale that they can put pressure on retailers, to have better-integrated operations.
Adrian Tennant: It’s clear from the data in our study and the insights shared by our guests, that brand marketers and retailers will need to adopt new practices to engage more socially abd eco-conscious consumers. Tactics such as communicating the sources of products’ ingredients and raw materials clearly to meet younger consumers’ desire for greater transparency around these factors; reviewing and where applicable, cleaning up manufacturing practices and policies; companies with opaque supply chains or suspected of “greenwashing” can expect to face greater scrutiny and the potential for significant consumer backlash. Offering refillable, recyclable, and upcycling options across a broader variety of product categories – beyond detergents and beauty items. And highlighting in-store waste collection initiatives and real-time upcycling as key components of differentiated, in-store brand experiences.
You’ve been listening to the third episode of Retail Disrupted: What Shoppers Want From Brands Today. My thanks to all the contributors to this podcast: Ksenia Newton, Chantal Schmelz, Michael Smith, and Brandon Frank. To download the full report on which this podcast is based, go to bigeye.agency/retail, where you can also watch the on-demand webinar highlighting results from our national study. I’ve been your host, Adrian Tennant, VP of Insights at Bigeye. Thank you for listening. Until next time, goodbye.