What is "Strategic Sustainability" and why does it matter?

February 21, 2019

What is “Strategic Sustainability” and Why Does it Matter?

 

Strategic sustainability is the design and delivery of socially and environmentally beneficial business processes that also drive profitability.

 

It used to be that customers would buy items and use them until they wore out or were no longer usable.  Today, customer utility is often shorter than item utility. Customers become bored with the items they’ve purchased, or find these items no longer fit their lifestyle, yet the items are often still in usable condition.  

 

Vehicles are one example of these types of items.  Customers are often ready to buy a car with different features long before their existing vehicle stops working.  For most customers,holding onto their old car once they buy a new one doesn’t make sense.  They don’t have the room to park many cars and there is an associated carrying cost, so they trade in or sell their oldvehicle.  For some models, it can drive as much as 75 percent of new vehicle sales.[1]  

 

This is also common with electronics.  Throwing old electronics in the trash when they’re no longer of use to you doesn’t make sense.  Often parties can be found who value the old technology enough to pay something to take it off your hands – and if not, many organizations repurpose old technology into parts or learning tools today.  For instance, Apple offers a robust trade-in program for iPhones.  In a recent investor report Apple states their desire to increase this program as it “places them in the center of the customer relationship”.[2]  

 

Fashion retailers have traditionally viewed sustainability in terms of sourcing, for example,buying items that are made from ecologically favorable materials, or from socially responsible producers.  But they have been slower to recognize the value of participating in the end of life process for their items sold.  The mindset has largely been that once the sale has been made, the item is forgotten, and all emphasis is on getting the customer to buy something new.

 

This is an outdated mindset.  It has resulted in this inauthentic dialogue between customer and retailer where the retailer relies on a one-way message of “buy more, buy more”, offering the same old sales and discounts and then expressing frustration that customers price shop.  It’s become expected that 75% of customers retailers acquire will never return.[3]  

 

In an era of heightened competitiveness, the value of retention cannot be ignored.  By increasing customer retention rates 5 percent, retailers have the opportunity to increase profits more than 25 percent, according to a report from Bain & Company.[4]   The key to driving this increase in spending and loyalty is a combination of clienteling and technology.  Both of these are achieved through Rohvi’s platform.

 

Rohvi has developed a way for fashion retailers to better serve their customers, the environment, and themselves by using recommerce as an acquisition and retention sales tool.  It is strategic, sustainable, data-driven, and profitable.  With Rohvi, retailers use their past sales data to generate unique trade-in offers fortheir customers.  They invite customersto exchange a previously purchased item for a fixed amount of store credit.  The customer can accept the offer online.  In addition to offer generation, Rohvi provides retailers item routing, reporting, and access to fulfillment capabilities.  Customer ownership and data remains the property of the retailer using the Rohvi platform.  


[1] Toyota, Subaru and Honda lead industry fortrade-in loyalty.  Automotive News March6, 2018

[2] Apple’s Answer to Slower iPhone Sales?  Getting Customers to Trade In.  WallSt Journal January 8, 2019.

[3] Ecommerce Loyalty Programs.  Shopify reference of Bain & Companystudy.  2018.

[4] Prescription for Cutting Costs:  Loyal Relationships.  Bain & Company  October 2001.

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