Skip to Content

Merging sustainably

18 June 2021

This week, we look at the how addressing the sustainability question now also drives merger and acquisition activity

Retail news was broken this week in New York, where Etsy announced it was buying Depop for $1.625bn. Etsy, as an American-based marketplace focusing on craft and vintage goods, and Depop, as a social-based European fashion start-up, look to have strong synergies across the two brands, so in many senses nothing major. However… there are two particular points that are noteworthy and have a wider significance in the industry about how Etsy is buying in to a younger Millennial and Gen Z customer base. Firstly, is Depop’s look and feel – it’s messaging, and layout is closer to a social media feed like Instagram, rather than a traditional online store layout, which is also mirrored in its peer to peer and social dynamic. Alongside this, it has a major emphasis (and following) on being part of the circular economy, encouraging re-use, repair and reimagining clothing rather than replace. Both of these points hint at what are important for an increasingly economically active demographic, and how to tap into them. The fact that the ‘old’ company making a push into Gen Z territory is only 6 years older than the ‘young’ company also demonstrates the pace at which the industry moves when looking at the cutting edge.

As highlighted in the recent Capgemini Conversations for Tomorrow report, one interesting aspect to the sustainability conversation is just how many elements there are to it, and consequently how, if tackled comprehensively, transformative an agenda it is for a retailer. From product ranges, to supply chains, to people and policy – all aspects are affected. A good example of this is Pets At Home, who launched their 2021 Social Value Report this year. It outlines 20 sustainability topics that it aims to influence, such as climate action, resource consumption, health and wellbeing, packaging and recycling, diversity and inclusion, social mobility and inequality and human rights. It’s quite a list and does demonstrate just how challenging a topic it can be for retailers to make sense of, and orchestrate, and then articulate an effective strategy to address its many dimensions.

Finally, on a different note, there’s an interesting retrospective article this week about how Mulberry were able to adapt quickly to closed stores at the beginning of the pandemic. A big part of this was having a single view of stock across their supply chain, which means that it was easier to operate a store as a fulfilment centre, routing orders coming in online to be fulfilled from individual branches. This kind of flexibility demonstrates an increasing desire in supply chains to focus on resilience as opposed to efficiency, harnessing data differently to make quick decisions to react to changing circumstances. For a further deep-dive into retail supply-chain resiliency in a post-Covid world check out Capgemini’s recent ‘wake-up call’ research report. In a tangential point, an article in the Economist (Paywall) this week noted how the use of ‘efficient / efficiency’ in UK Parliamentary Debates has been overtaken by talk of ‘resilient / resilience’ in the last year, coming from almost nothing ten years ago. Perhaps there’s more between politics and supply chains than first meets the eye!