How sustainable are US DTC brands?
DTC brands often tout themselves as being environmentally conscious and making efforts to improve the retail industry’s relationship with the planet. Brands like Grove Collaborative, for instance, are promising to be plastic-free by 2025. So we decided to put them to the test and discover just how sustainable US DTC brands really are. We studied 50 popular DTC brands in the U.S. to discover the truth.
1. DTC brands still rely on plastic packagingThe retail industry has long been a major contributor of plastic pollution globally. Around 80% of the plastic waste in the oceans alone originate from product packaging. Reducing plastic should be a major focus for a DTC brand promoting sustainability. Yet a third of brands (32%) are still shipping in plastic bags over recyclable cardboard packaging. A full 52% use some type of plastic packaging overall. And in fact, only 4% of brands are providing their customers with the option of less packaging at checkout.
With alternatives like compostable mailers and mushroom-based styrofoam becoming more available and affordable, this simply isn’t an area brands can afford to fall behind in. Even if you cannot switch all your packaging immediately, offering customers a choice at checkout will make a big difference in brand perception and customer experience.
2. Returns are often the most sustainable aspect of the post-purchase experience.Likely because the same aspects that make returns more convenient are also eco-friendly, DTC brands are most likely to have optimized their returns process for sustainability. 100% of brands use packaging that is reusable for a return. 54% promote paperless returns. Both of these options also make for a hassle-free returns process. Brands that aren’t offering these options need to immediately update their processes in order to remain competitive.
3. DTC brands don’t do a great job with messaging what sustainability practices they do have.Only 6% of DTC brands include sustainability messaging in their shipping notification. 22% include sustainability messaging on their packaging. Both the shipping notification and product packaging are key moments in the post-purchase experience to communicate your brand values to your customer, reinforcing their loyalty. Brands must utilize these opportunities in order to create a loyal customer base. Updating your shipping notification is an easy change you can make today, even if updating the messaging on your packaging will take longer.
4. Finally, only 6% of DTC brands offer carbon-neutral delivery.Again, the retail industry is a massive contributor to greenhouse gas emissions. McKinsey found that the fashion sector alone was responsible for 4% of total emissions in 2018. For brands seeking to put their money where their mouth is, offering carbon-neutral delivery is a massive differentiator. Because so few brands are offering it at the moment, hopping on the carbon-neutral delivery train now makes an excellent differentiator from your competitors.
ConclusionFor DTC brands, sustainability is a must for maintaining life on this planet - but it’s also a crucial value they can use to win over consumers. With value-aligned Millennials now the most influential consumer base in the economy, brands must run sustainable programs, offer sustainable options, and message about their work. Brands should be using their Operations Experience to improve their post-purchase sustainability and messaging, optimizing for the good of the planet and their profitability.
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