EDITORIAL Imperfect Goods, Sustainable Trade and Taxed Retail – Editorial

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The world is changing and so is retail (Image: Fotolia)

eBay’s launch of Imperfects – its subsite that sells slightly flawed clothing from brands like North Face, Timberland and Puma – shows just how far the sustainability revolution has come. As protesters stick to oil refineries, consumers are already looking to buy more sustainably and make a big impact, not just on the environment.

There are clear benefits for the planet of shifting to a more circular mode of consumption and, eBay included, it offers great brownie points to retailers who join in and make it happen.

However, this has long been seen as a trade-off: sales can increase if you act sustainably, but this comes at a cost to businesses as it makes things harder and more expensive. But is this thinking outdated?

It seems so. Research published this week suggests that from 2021, sustainability initiatives will contribute around 20% of companies’ bottom lines. Not only does this increasingly drive sales for brands and retailers that adopt more sustainable practices, but it also saves them money. It’s a real win-win.

It also ushers in a new era of collaboration between brands and retailers and their suppliers, as well as between the suppliers themselves and, according to the report, this will see even more savings/income coming from sustainability as we let’s enter the 2020s.

Embracing sustainability – and its growing business benefits – marks one shift in retailers’ view of business fundamentals, but their almost unanimous welcome of an online sales tax marks another.

As a government consultation launched in February ends in May, a snap survey of retailers found 89% support the introduction of an online sales tax to level the playing field between physical retailers who have to pay professional rates and pure players. who don’t.

The caveat is that many are also calling for some subtlety in how this is applied, with a blanket tax being largely rejected in favor of reductions or a complete waiver of it for essential items, for small retailers and maybe even for digital goods.

The complexity of how to tax e-commerce is revealed by the almost 50/50 split of views on click and collect location. Half say it should be taxed as e-commerce, the other half don’t.

This sheds light on the future issues that retailers – and retail tax collectors – are going to face. Increasingly, online is not a thing in itself, but part of the retail experience. The complexity of today’s buyer’s journey only makes it even more confusing.

The rise of the metaverse, the growing use of virtual reality shopping proxies – see the trial in Barcelona we reported on last week that connects home consumers with personal shoppers in the fruit and vegetable market via VR and 5G – and the use of mobile to shop in-store will all make what it means to shop online rather debatable.

It’s hard enough for retailers to master, but the metaverse is going to prove very difficult for the powers that be to regulate, let alone tax. Good luck with this HMRC.

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