Sustainability makes sense

Airbnb: Where does it go from here?

Airbnb is a phenomenal company that continues to disrupt the hotel industry. It’s a beast of a competitor with about five million listings on its website while 3.5 million people stayed at an Airbnb property on its best night in August this year.

This has helped it gain a valuation of more than $30bn but its co-founders are concerned. It earned only a modest $100m on its impressive $2.6bn of revenues – equating to a return of only 4%. This is nothing like the margin levels many of its traditional rivals such as Hilton or Expedia achieve.

Airbnb has no obvious opportunities at this stage for extensions into other lucrative areas, unlike many of its Silicon Valley compatriots. Amazon, for instance, is profitably extending its tentacles all over the place and it’s a similar situation with Uber and Google, which are moving well beyond their initial profitable core businesses.

While Airbnb mulls over potential areas of growth to help deliver the massive (ten times being an expectation) returns its many venture capital backers are now demanding, its founders have another pressing, and possibly conflicting, issue. They are looking at positioning the business as an entity that isn’t wholly beholden to delivering financial results.

They have recognised the company needs to work on what is best for the broader Airbnb “community”, which includes its guests, property hosts, employees and cities in which it trades. Managing this array of parties, not just shareholders, has also been increasingly on the mind of Deliveroo, whose “community” consists of food-buyers, riders, restaurants and cities.

There is growing recognition that consumers are increasingly unwilling to spend money with companies that solely focus on short-term financial returns and fail to take into account broader responsibilities such as sustainable practices. Those businesses that fail to be socially conscious are being shunned by a growing number of young people.

This new way of thinking and operating is starting to permeate the fashion industry, which is being called out by consumers for unsavoury practices such as waste, animal welfare and child labour.

Kresse Wesling, co-founder of sustainable luxury brand Elvis & Kresse, has called the wasteful actions of many companies “unacceptable” and is vehement about unshackling from what we regard as success – purely sales and profits. She prefers a situation where the planet and people are equal to shareholders.

Elvis & Kresse’s model is about operating with different metrics. Wesling says while traditional company models are inextricably linked to revenues and profits, her business success is based on the level of donations it gives to charities and renewable energy projects, and the amount of materials it reclaims from waste and landfill.

The company converts this material into luxury products, including belts and bags, many of them created from end-of-life hoses sourced from the fire brigade. These narrative-driven or action-oriented products represent the future, according to Wesling. This approach has caught the attention of big fashion brands and Elvis & Kresse now works with the likes of Burberry, from which it rescues significant amounts of leather off-cuts.

Some of the firehose waiting to be used by Elvis & Kresse

Elvis & Kresse is proving a successful agitator and has helped push adoption of sustainable practices up the agenda of large fashion brands. More than half (52%) of fashion industry executives have said sustainability targets act as a guiding principle for almost every strategic decision they make, according to the Pulse Of The Fashion Industry report by the Global Fashion Agenda and Boston Consulting Group, up 18 percentage points on last year.

At a time when many leisure and hospitality businesses are finding it tough to justify their existence based on old practices, it’s time they took a long hard look at the “story” they are trying to tell and ponder whether the tried-and-trusted metrics they have been beholden to are no longer fit for purpose.

Glynn Davis 

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Viewpoint: Fast fashion needs to face up to sustainability challenge

H&M is one of the leading fast fashion businesses but this massively successful company has recognised that a growing group of environmentally conscious shoppers are giving it – and the other fast fashion brands – a bit of a headache. Its core, young, customer is at the forefront of finding the wasteful nature of fashion […]

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Digital Retail Innovations Q&A – ZozoSuit

Following the launch of the Digital Retail Innovations 2018 Report (sponsored by Webloyalty) a series of Q&A’s with the leading figures behind some of the key entries in the report are being published.   Here is a Q&A with Takehiko Ono, General Manager, Zozo International Business,  which is placed at number 31 in the report for […]

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Lessons for the High Street: 50m

Welcome to our brand new series of articles on retailers that are operating in ways that provide some interesting and valuable lessons to the wider industry.   Name: 50m Location: Eccleston Yards, London SW1 In a nutshell: Running a co-operative shop model where each contributing member is given a 50 metre space for their goods. […]

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Retail climate becomes hard to stomach

Philippines-headquartered quick service restaurant chain Jollibee hit the UK market at the weekend when its first outlet opened in London’s Earls Court. The company announced it has high expectations for its proposition, which has fried chicken dish Chickenjoy as its flagship product. This opening reminded me of the time I was invited to dine at […]

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Data is the driver

When Boparan Restaurant Group launched a 50% discount on food for emergency service workers this week to support police, firefighters and NHS staff during the winter, it triggered the simplest of reward schemes that targets specific customers. To qualify, I suspect these essential workers simply have to show their ID card at the group’s Giraffe, […]

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Retail Insider Wine Dinner with Dan Jago, CEO of Berry Bros & Rudd

Retail Insider held its final event of the year with Dan Jago, CEO of Berry Bros & Rudd, who provided some great insights and anecdotes from his rich career in wine and spirits as guests enjoyed various courses of food matched with wines from the company’s extensive cellars. Senior executives from Hotel Chocolat, Fortnum & […]

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Master of One: Bridgewood & Neitzert

Welcome to our brand new series of articles on those retailers who choose to concentrate only on one very specific product or expertise. In a world where so many are jacks of all trades – we meet the masters of one. Name: Bridgewood & Neitzert Location: Stoke Newington Church Street, Hackney. Specialism: The making and […]

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Movers and Shakers Q & A: Paul Hornby, director of e-commerce, Matalan

Paul Hornby, director of e-commerce, Matalan 1. What is the greatest opportunity for your business? We have a real opportunity to become the most trusted omni-channel retailer of family value. Nobody has – yet – truly nailed the omni-channel customer experience in my opinion, and this is especially true in the value sector. Considering how […]

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Digital Leisure and Hospitality Innovations Q&A: Karma

Following the launch of our 2018 ‘Digital Leisure and Hospitality Innovations top 20’ report, here is a Q&A with Elsa Bernadotte, co-founder of Karma, which features in this year’s report for its app focused on food waste reduction. 1. How did the original idea come about? A staggering ⅓ of all food produced is thrown […]

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Launch Dinner for Retail Insider ‘Digital Leisure & Hospitality Innovations’ report with Rohan Pradhan, COO of Deliveroo

  Retail Insider celebrated the launch of the second ‘Digital Leisure & Hospitality Innovations Top 20’ report at an evening event with guest speaker Rohan Pradhan, COO of Deliveroo. The report, sponsored by Webloyalty, recognises the top 20 leisure and hospitality digital initiatives of the last year and draws attention to a number of industry trends including […]

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Innovative Retailer: Bite Beauty

Name: Bite Beauty generally and its Lip Labs specifically. The Place: Not here sadly. The ladies out there will have to wait to visit a Lip Lab. Or fly to the States/Canada if customised lipstick becomes necessary to continue living. The Story: Some retail sectors we just keep coming back to in this series on […]

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Viewpoint: Keeping it real down the market

Whenever I make the journey to Barcelona, which seems to be quite frequent as the city plays host to numerous technology conferences, then a visit to the famous La Boqueria food market is an absolute must. It is held up as the benchmark for what a market should be and which all too often far […]

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Retail Insider ‘Digital Leisure & Hospitality Innovations Top 20’ report launches

Retail Insider this week celebrated the launch of the second ‘Digital Leisure and Hospitality Innovations Top 20 Report’ at a dinner event at central London restaurant Pied A Terre. The report, sponsored by Webloyalty, showcases some of the very best leisure and hospitality digital initiatives of the year and simultaneously highlights a number of industry trends including the […]

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That’s entertainment

High-profile crowdfunding platforms Seedrs and Crowdcube have both been highlighting their successes recently. The former celebrated raising funds for 66 food and beverage businesses since 2012, which is its most successful sector, accounting for more than 11% of its completed deals, while the latter pointed to the fact 100-plus companies had raised more than £1m […]

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Winners announced for 2018 Transforming Retail Awards

A host of senior retail executives gathered yesterday in central London at Sourced Market to celebrate the second Retail Insider ‘Transforming Retail Awards’ aimed at highlighting some of the most exciting innovations in the retail sector over the past year. The Awards attracted many entries of a very high standard giving the judges a particularly […]

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Viewpoint: Algorithms determining service levels

  Uber recently introduced a system in Australia and New Zealand that bans people from using the service if they are awarded low ratings by drivers. After a number of incidents of bad behaviour by certain passengers the company has brought in measures that take away access to its service for six months if people […]

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Movers & Shakers Q&A – Charlie Pool, Stowga

  Charlie Pool, CEO of Stowga.  1.What is the greatest opportunity for your business? The big goal is to change the entire way people think about their supply chain. Right now the warehouse is the weak link in the supply chain: everything else in a supply chain (i.e. transportation) is short term variable costs for […]

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Digital Retail Innovations Q&A – Slyce

Following the launch of the Digital Retail Innovations 2018 Report (sponsored by Webloyalty) a series of Q&A’s with the leading figures behind some of the key entries in the report are being published. Here is a Q&A with Ted Mann, CEO of Slyce, which features in this year’s report for its work with Tommy Hilfiger and […]

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Beyond the call of duty

We have just hit the tenth anniversary of the collapse of Lehman Brothers and it brought to mind an anecdote I heard from just before that period. Sir Fred Goodwin, chief executive of Royal Bank of Scotland (RBS), and Terry Leahy, chief executive of Tesco, were sharing a platform at a conference when the subject […]

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