As part of The Retail Exchange podcast series, business journalist and broadcaster Declan Curry sat down with Dr Dorothy Maxwell, head of sustainability at House of Fraser, to discuss the retailer's new sustainable store at Rushden Lakes in Northamptonshire.
DC: Big news from House of Fraser is that you’ve opened a new store – your first in years – it’s by a nature reserve in Northamptonshire. Tell me more about it.
DM: This story is very special to us because it is our first official sustainable store; it’s certified to a sustainable building standard called BREAM, and basically that means from its energy efficiency it has a very low carbon footprint. It’s also situated in a nature reserve, so we work very hard to bring the nature in and make sure we protect that site, and it has a whole range of other features that make it low impact on the environment.
DC: That’s really quite something! So you’ve got wetlands and birds, ducks and geese and whatever else all as neighbours?
DM: Yes, so the store, House of Fraser is the anchor store in this retail park and it borders the Nene Valley wetlands and this is a protected nature reserve, exactly as you say, for birds, also for ancient forest and the Wildlife Trust are the custodians of this nature reserve. House of Fraser has partnered with them so we can support them to do their job, to protect this nature reserve, and we can work together in this interesting combination of wildlife meets modern retail and do it successfully.
DC: That must be quite a remarkable interface between human migration – people coming to shop – and bird migration – birds coming in from wherever they are, actually we must be near that point of year now?
DM: Absolutely and one of the interesting things about this nature reserve and the birds is that a lot of the birds on migration from places like Siberia, in Autumn time, are coming over and they're nesting and that’s one of the reasons that this is so protected.
DC: How do you make that work? How do you have a thriving viable retail space with all the logistics that surround it, sitting comfortably with bird migration and nature doing its thing?
DM: Yeah, again, this is an experiment but we, and all of those who’ve been involved in the planning of Rushton Lakes, and indeed all the other tenants who are at Rushton Lakes, have been designing this concept for many years and planning this, and one of the key features in making it work is that you have an organisation like the Wildlife Trust based there permanently to ensure protection but also to engage people. So whether you are a store like House of Fraser that’s based there and making sure our employees are engaged or whether you are a customer coming to shop at the shopping centre, the Wildlife Trust are proactively working with all these groups, such that everybody can do their bit to make sure that this site remains protected. The other thing is the way the site is designed, only certain parts are accessible to people who visit the site, so that’s very important; some are just completely off-limits and as a partner of the Wildlife Trust, we have great plans as we come into the Autumn to use nice hi-tech binoculars and things like nesting bird cams and other things so we can get a little bit of a peak into that wonderful life without in any way bothering the birds and so forth. So that’s really the way we are planning to do it and we are determined to make it a success and to ensure that site it protected.
DC: It also means that you need to have a bit of a re-think about what goes in the store, what are the elements of the store, what is needed to make a store work – you'll have had to have thought all this through and perhaps make some modifications to how things used to be done in the past?
DM: That's true and for this store, for me, it really is the unique aspect of it. So, given that it is in a nature reserve, we worked very hard to bring that natural aspect inside the store as well. So we have amazing internal features and the key one is a living wall and this living wall is two storeys high – it’s about six metres by eight metres. So it’s 2000 local plants, is basically what it is, and it makes up the whole central atrium of our store. Where you usually have digital screens and advertising and so forth, we have these wonderful local species. And above that, we have an art installation by an artist called Cecilia Smith, and Cecilia Smith is an RSPB Award-winning artist, so she's used to working with birds, and she has this amazing installation of birds in flight that sits above the living wall. It’s a wonderful aesthetic that really brings this natural aspect into the store and is a key feature.
DC: The point of it is what? Is it to make customers feel a little bit warm and have some fuzzy goodness or…
DM: Well, it has a natural aesthetic that brings harmony with the natural setting but the other thing about living walls very practically are they're excellent for air quality and they're excellent for well-being. They also have a real function and the bird installation are the local birds – the lapwings and so forth that are at this nature reserve. The idea is we are trying to link the two together by having these additional features in the store.
DC: And this is an important point, that yes, it has to be sustainable, but it also has to work as a store – it also has to encourage people to shop and has to bring money into the till?
DM: Absolutely, and you know, bricks and mortar stores, it’s all about the experiences nowadays for customers too. One of the things we've done by partnering with the Wildlife Trust is that we have had the Wildlife Trust train all our staff on the local wildlife, so we can have that interaction, so the combination of that, of the living wall, of the installation and coming to this wonderful site for a day, you can really get many, many experiences out of it and overall it’s a positive experience is the intent for the customer.
DC: Okay, this is one store – it’s your first new store in the best part of a decade and for you, I imagine, it’s a showcase of what sustainable retail should look like in the future?
DM: That’s correct and the biodiversity aspects we've been talking about there, they're a natural feature of it, but sitting behind all that are the more harder engineering aspects that make this store highly energy-efficient – it has a carbon footprint that’s about 50 per cent less than any other store in our estate, so thinking to the future, all these things are incredibly important. We've made it zero waste to landfill, we've used low impact materials in everything from the floors through to the packaging materials. So we really built in all these elements of what sustainable retail is and what the boundaries will continue to be as that pushes into the future.
DC: But how then do you expand that thinking to embrace the rest of the estate – all the other older stores from a different time, that aren’t as sustainable as this one?
DM: Well, if we have new stores, and for any future new stores House of Fraser has, there's no doubt about it, a new store gives you the opportunity to leapfrog in terms of the environmental performance improvement but with existing stores, we are already working very hard to maximise their environmental performance and making good progress – but you are limited by older stock, there’s only so much you can do. However, when you do a refurbishment, we build in improvements on energy, on resource efficiency and water and it is possible to do that – just not as much as you get with a new store.
DC: All of this is expensive of course, it all requires investment and in House of Fraser, like any other business, there are multiple demands on limited investment funds – where is sustainability in the priority list?
DM: The really interesting thing about House of Fraser is that sustainability is a core bid of the business. We have built it in as one of our core values – House of Fraser has five values that underpin the business and respecting people and planet is one of those – and we've built it into our key performance business metrics. So it is absolutely at the core of the commercial agenda that is part of any retailer.
DC: But you also have to improve technology, the business wants to expand in China and overseas, you want to keep attracting new customers here in the UK and changing your technological offer so that you are speaking to millennials and Gen Z. That’s a lot of new innovation that needs a lot of funding – funding that you would like to have for sustainability?
DM: Well, I think with any business it’s a balance on where you put your investment, but you know, here's the really interesting thing. When we look at this new store in Rushton Lakes and if we look at the return on investment for the design and now that we’re starting to see the operation, I mentioned that it has about a 50 per cent reduced carbon footprint, that brings significant operational costs. If you look holistically at that whole picture as a retailer, there's a really strong business case for building in the technology that gives you those sustainability links.
DC: True, but it’s easier to do it in a store when you can build that technology in from the start – much harder to retrofit?
DM: That’s true and the return on investment for a new store will be much more compelling for your CFO than it is for an existing store.
DC: Is this important to customers? Do customers say to you, we want you to demonstrate sustainability? We want you to show that you are treading lightly on the planet?
DM: It’s a great question and the answer is, absolutely. We've asked our customers this question many times and in many ways and they tell us – 8 out of 10 of them tell us – that sustainability informs where they shop, what they spend their money on and that they are expecting us to have good environmental and ethical performance. So I think that is a feature of our customer and particularly a premium retail customer is expecting that.
DC: Do they see it as a positive difference? What I mean by that is, do they just expect you to be as good as the others or, not markedly worse in terms of sustainability and environmental performance, or do they actually seek out companies with a stellar sustainability record, and actively choose to shop with them?
DM: It’s very interesting because nowadays we’re seeing quite a number of apps that are guiding customers on the retailers that have the best sustainability performance and while the metrics vary and sometimes they're right or wrong, those are out there and they're increasing and customers are using them so that would indicate that the answer to your question is yes, this is important.
DC Shows what happens when knowledge is put in the hands of consumers and how it influences their buying decisions.
DC: Having one store that is remarkably sustainable and drawing lessons from that to adapt your existing estate on a store by store basis, that’s all fine, but there is more to retail than that of course; there's the whole logistical and supply operations that customers never see. When you look at other retailers – you’ve got Marks and Spencer which has had Plan A now for quite some time – how do you take what you’ve learned from the operation of Rushton Lakes, and make that into a sustainability policy that runs across the group?
DM: Well, before we even had the new store at Rushton Lakes, we had put in place our sustainability program and we call it ‘Responsible Retailer’ – I guess that’s our version of Plan A at House of Fraser, and the scope of that is absolutely every bit of our business; it’s all the way from the materials that go into our house-branded products and the other products we sell in store, how it gets from A to B, how it’s manufactured, the packaging it goes into as well as how the stores operate. And then what the customer does with the product when they get it home or not, and so forth. So that whole scope is already part of the Responsible Retailer program and the store-related improvements, whether they're existing or an amazing new store like Rushton Lakes, again that's just one piece of us being a sustainable retailer.
House of Fraser Rushden Lakes
DC: There are limits to how sustainable retail can be of course, given that at its core, retail is about getting us to buy more stuff all the time…
DM: Yeah, the consumption aspect is a massive, massive feature and I call it the elephant in the room for any retailer, and you know, I have to say, for House of Fraser, this is something we have faced into head on. The ultimate vision for me in terms of our Responsible Retail Program is that you walk into a House of Fraser store, and everything from the products, the packaging, the experiences you're having in the restaurants and the food you're having, is really credible from a sustainability perspective. And I do feel that that’s possible and that’s basically the route that we are early into but we are for sure, moving on.
DC: Customers are telling you that sustainability is important – what else are they saying about department stores in general? What do they see as the role of department stores in the retail landscape?
DM: Well, we are probably moving a little bit out of my sustainability area of expertise, Declan, but I think one of the key things for customers is in a bricks and mortar context, that they have experiences. Of course, increasingly customers are buying online so for House of Fraser, we've been around so many years, beyond having a bricks and mortar offering we have an e-comm offering and customers can shop 24/7, 365 days a year in House of Fraser because we’re online and they are the sort of things that customers are expecting.
DC: Because when you look at newer generations and their use of technology and demands on their time, it’s a startlingly different demand from what department stores have had to supply in the past. They expect the use of new technologies like virtual reality and artificial intelligence – they want more curation of products – all of this is part of the mix of what keeps a department store relevant.
DM: That’s true. Again, not particularly my area! But from the sustainability side, you know, when you look at our house brands – and we are moving into being proactive about communicating their sustainability credentials, we have our first in store actually only in the last month which is our Howick Range which is organic cotton and knitwear – that aspect is one unique aspect now that is part of the offering from House of Fraser. So offering those sustainable elements is also about giving the customer something they're telling us that they want, something that’s also at the right price as well for them, and meets what our customer is interested in, but is unique and different and perhaps something you wouldn’t have seen in House of Fraser previously.
DC: And I know its slightly outside your area of direct responsibilities, so thank you for sharing your thoughts on it. It does give me a sense that it’s part of the excitement of doing the type of job that you do, as being part of that process of development, of reinvention in department stores.
DM: That’s true and you know, a lot of people call sustainability ‘change management’ and House of Fraser is going through a transformation and having this sustainability program is very much part of that.
DC: Where does the brand go next? What is the next innovation that we should expect? Or actually, when customers start going in looking for their Christmas shopping for example, we’re now at that point of the year already, what's going to wow them? What's going to attract them?
DM: I think that they will see more experiences. I think that they will see more premium offerings across the categories and of course, they're going to see more sustainable products, they're going to see more sustainable packaging and also more interesting and sustainable food offerings.
DC: And given the economic climate – we've seen inflation rising, wages are starting to fall behind prices again – are we at a point where department stores have to start offering promotions or being more aggressive on price and value?
DM: Not my bag, Declan! I won't even comment! [laughs]
DC: That’s fine. It’s part of that sort of wider discussion about the store can be excellent in sustainability but still fundamentally has to work as a store in the current consumer and economic climate.
DM: Absolutely and you know, this is the balancing act that any business has. Sustainability has to have an incredibly strong business case and personally my own experience has shown that the two can go hand in hand if you really integrate this into the heart of the business, and we've already seen in our Responsible Retail Program, some significant operating costs from the sustainability improvements that we've made, but also with sustainable product streams this is an important part of the market – in the UK its worth over 1.5 billion per annum – that's a very important market share and it can be a revenue generator for retailers. So I think there’s a misconception that sustainability means that you're not going to be profitable and in actual fact, it should be the opposite.
DC: How did you become Head of Sustainability? What's your life story to this point?
DM: Well, I am qualified as an Environmental Scientist and I'm working now about 20 years in sustainability in different parts of the world, and I've worked with other consumer brands and retailers. So I really came to be at House of Fraser primarily because I love fashion and I know and truly believe that fashion can be transformed and retail can be transformed into a more sustainable business model, and I'm very passionate about doing that. another thing that interests me about House of Fraser, they have two Royal Warrants and I'm very honoured to have been nominated – only in the last month or two – to be His Royal Highness’ Ambassador on Responsible Business for London. So there's a really interesting synergy there with House of Fraser because when you hold a Royal Warrant, you have to have really good sustainability credentials and we’re working very hard on that. so, a nice dovetailing of many of those things.
DC: And I'm assuming that’s Prince Charles that you're referring to there?
DM: The Prince of Wales, correct.
DC: You can't really fake a conversation about sustainability credentials with that man, can you? This has been his life’s work!
DM: You cannot! The Prince has a complete respect for his knowledge on sustainability and he really understands that area so well and it’s a great honour to be able to support him as one of his Ambassadors.
DC: Do you have a typical day?
DM: So my day can be quite varied because my role interacts with so many parts of the business, so its varying from things like a new store like Rushton Lakes, which is all-encompassing, through to working with our creative teams, through to working with our buyers on things like how we source our products and doing it responsibly and so forth. So it can vary from very practical things to quite esoteric things.
DC: And obviously, you love the job that you do now, but what is your next challenge? What's the next achievement you'd like to be able to write on your CV?
DM: Well, I really do love the job that I do. I think we have a lot of work ahead of us at House of Fraser so, I think that will be a focus of my work, and particularly being an Ambassador for the Prince of Wales, that’s something that I really would like to make sure that we unlock some improvements in areas that he's interested in – and there are many around things like sustainable cotton and sustainable fashion. So that I think will be a very important focus for me for the next two years.
DC: Have you been able to tempt him to visit Rushton Lakes?
DM: No, but here and now, I'm putting the invitation out there! I think he would love it, this wonderful, beautiful, beautiful nature reserve. Yeah, wildlife needs modern retail!
Listen to the audio file at www.theretailexchange.co.uk where you can also listen to previous podcast episodes, including Stores of the Future 2.0, Creating Top Shops, What Shoppers Want and Is Mainstream Retail Dead?