For several years now, France's major retailers have been working to promote more responsible retailing. They have implemented a range of initiatives motivated not only by the level of maturity of civil society, but also by a legislative framework that is increasingly committed to protecting mankind and the planet (see our article " What are the foundations of a CSR purchasing policy?)
After 2 major phases of action on packaging and product integrity, Common Responsibility is now focusing on the notion of sustainable design and use of all products, right through to their end-of-life.
In France, this3rd phase is supported by Law no. 2020-105 of February 10, 2020 on the fight against waste and the emergence of a circular economy. circular economy.
But how does this new phase play out in French Retail?
The main driver for the practical application of the Circular Economy obviously concerns the nature of the products distributed: consumable or non-consumable.
With this in mind, it's only logical that retailers with a strong focus on foodstuffs should concentrate on product eco-design, the ongoing quest to reduce packaging and even the reactivation of the good old deposit system. Monoprix, for example, has positioned itself at leader on this subject, as in addition to glass bottles, it is currently testing the deposit for baby food jars.
Today, we are also witnessing the development of bulk sales in conventional retail outlets, not only on traditional shelves (cereals, starches, seeds, etc.), but also on hygiene and drugstore products. In this respect, the anti-waste law is helping to develop bulk sales: since January1, distributors with bulk sections have been unable to refuse the use of customers' own containers (provided they are clean).
On the other hand, retailers with a substantial, even exclusive, share of non-food products have entered a market that was exploding out of their control: the second-hand market.
In the Generalist segment, Leclerc is leading the way with the creation of a second-hand space in 2018, focusing on household appliances and high tech.
It has since been followed by other chains, and Carrefour has just opened its 8th second-hand store, while U is testing it on 3/4 POS.
This activity generates traffic, an offer sometimes absent from traditional departments, and additional sales, as the customer receives a voucher valid throughout the store.
Some banners will activate only certain departments, such as Cora, which is launching a second-hand textile business with Patatam, or household appliances and other bazaar items with Easy Cash.
Please note: don't confuse the second-hand market with the collection of used products. Indeed, the collection of used products is an integral part of the Circular Economy, but often the products are integrated into a specific Second Hand sales network. H&M was one of the first to take back old clothes in exchange for a voucher.
That said, some brands, such as Okaidi and Jacadi, have no qualms about devoting dedicated space in their stores to second-hand collections.
IKEA also launched its take-back program very early on, but only for its own collections, with a fairly lengthy process of photography and validation... a normal process given the weighty nature of the products. On the other hand, like ZODIO, the 2 chains have set up take-back schemes for household linen by the kilo (but always subject to certain conditions), which, if well orchestrated, makes them attractive for certain operations: typically at the time of the white sale.
As for household appliance suppliers, they had long since positioned themselves in the repair market (the Darty contract of confidence), but have now launched into the second-hand market, which is all the easier and even more profitable for them, since they take back old products from customers!
That said, not all specialist retailers (or some manufacturer-distributors) have tried their hand at this, which seems very surprising in certain sectors: jewelry, childcare, wedding dresses ....
But beyond the occasion, today's society is moving towards the economy of Use or Functionality.
The economy of functionality can be defined as a system that prioritizes the use rather than the sale of a product. It aims to develop integrated solutions for goods and services with a view to sustainable development. In this way, economic exchange is no longer based on the transfer of ownership of goods, which remain the property of the producer or distributor throughout their life cycle, but on the willingness of users to pay a use value.
It differs from the rental concept concept, which until now has been reserved for exceptional needs (a car, bicycles on the Ile de Ré, a disguise...).
In recent years, the reasons for renting have gradually changed:
- purchasing power issues have added fuel to the sellers' fire (consumer credit regulations have tightened)
- consumer volatility: "I want to be able to try out and always have the latest object".
- responsibility: "Can I share instead of holding in my own name?
These developments have enabled consumers to consider use rather than ownership in new product categories: hifi, telephony, household appliances, etc.: the notion of use has become part of consumers' daily lives.
As a result, rental services reserved for just a few specialists are becoming widespread in the major chains. This adaptation is reflected in the form of the contract between the retailer and its customer: subscription.
Electrical retailers have made no mistake about it, and a brand like Darty, for example, now offers a vast range of products: from vacuum cleaners to the latest smartphones and electric bikes...
Le Petit Ballon" allows wine lovers to receive a selection of bottles on a regular basis, without having to go out of their way to discover new horizons. And our teenage girls are already embracing the convenience offered by sites like My Little Box!
Even more surprising are the even more personal products: sporting goods!
Décathlon is currently testing several subscription formulas in Belgium. This transformation calls for reflection and piloting on the part of retailers, who have to rethink their organization, their processes, their scope of responsibility...and their business model!
But on this last point, it looks like a good deal! On the face of it, subscription-based rental offers excellent value for money:
- the relative saturation of the subscription by the consumer,
- of the security deposit to cover damage to equipment,
- the reuse of equipment on the basis of adjusted stock levels,
- and, of course, the "negligence" of the consumer, who over time becomes less and less assiduous (gyms have been demonstrating this for a long time).
In this respect, the notion of subscriptions as the new El Dorado of organizational economic performance is not really up for debate, since some software publishers specialize in managing corporate subscriptions (ZUORA in partnership with INSEAD, for example).
So why not Retail, which is not the enemy of its own economic performance!
After second-hand, rental and subscription, what are the other major developments in retail?
Retail is essentially self-service. Products therefore have to be calibrated and packaged for this form of automation. This approach generates billions of tons of superfluous packaging. It's easy to imagine that bulk packaging could be the solution, but breakage and shrinkage are still far too high, and some products are not entirely suitable for it! So what's the solution? The famous old counter sales be the solution? Admittedly, it would entail a significant increase in payroll, but it fits in perfectly with a new experience of the customer journey, and becomes feasible for the hypermarket model based on a darkstore scheme!
Another way of reinforcing the Circular Economy could be through a militant soft discounter, with reduced ranges and drastic specifications, and above all, one that could allow itself to postulate changes in consumption patterns: toothbrush containers without packaging, or revolutionary private labels with solid toothpaste: the distributor is a player in changes in consumption patterns.
And finally, Retail needs to turn to service provision: garden centers to maintenance services (you don't buy a lawnmower anymore, you ask for a gardener), DIY with discovery workshops and outsourced work.
However, the major general retailers are still confronted with this notion of consumables! Without realizing it, they started the trend some time ago by developing catering facilities in the hyper-urban concept, initially to cater for a more nomadic clientele, who lunch outside. After offering in-store catering, how do we bring this catering into the home? The development of prepared meals cooked by real chefs at the point of sale (Monoprix, for example, already offers baskets containing all the elements of a meal, similar to the Quitoque model).
So, this new way of living the household food supply would come back to us very expensive!!!! And the multiplicity of subscriptions could also become a household cash flow nightmare!
So there will probably always be a balance to be struck between subscription, service and ownership!
By Catherine Fedrigo