Up until recently, sustainability was a niche practice in the retailing industry. However, corporations have been taking initiatives over the past few years in order to reduce their environmental impact. In today’s society, issues like climate change, excessive waste, and unethical labor practices are much more prominent than they were a few years ago. Because of this, consumers are becoming more aware of sustainability issues. They also expect retailers to keep up with their changing expectations. Retailers can gain a competitive advantage by allowing consumers to shop more consciously. However, this notion is still challenging because consumer expectations are changing rapidly and sustainability initiatives can be expensive. These additional expenses have to be borne by the retailers as well as the consumers themselves. Then the challenge lies in taking the first step with all the risks that are involved.
With this being the case, let’s examine how retailing can be made more sustainable through the lens of Green Retailing.
Factors Driving A Greener Retailing Movement
Before we dive into Green Retailing, let’s understand the driving forces that give such a movement its momentum.
Supply chain management of natural resources
In retail, both products and the production process rely on natural resources. Natural resources are limited. This already means that over-dependency on them is not sustainable. For serving customers in a viable way, businesses have had to consider alternate resources.
Products and their environmental impacts
The use of the product itself can have environmental impacts. For example, the release of gases or the use of non-biodegradable packaging. This has made businesses and regulators take note. CFCs harming the ozone layer were banned. Manufacturers and Logistics companies are beginning to offer greener packaging & shipping options.
Gases that contribute to climate change and energy
During the combustion of fossil fuels, greenhouse gases, and hazardous air pollutants are released into the atmosphere. This naturally has a major impact on the environment. Businesses thus have pressure to reduce their environmental impacts by using energy efficiency and renewable energy.
Environmental toxins and chemicals
The majority of products contain chemicals. Some of these chemicals have the potential to be harmful to people or the environment. Savvy consumers now want safer products and retailers that can deliver have an advantage. Therefore, manufacturers and retailers are working to bring greener products to market.
Disposal of waste
The retail sector sees several types of waste – unsold products, unrecyclable products, and costs associated with dealing with waste. Creating waste has significant environmental impacts, such as releasing methane, a potent greenhouse gas. The concept of zero waste has gained popularity, and facilities are developing innovative ways to reduce waste and reuse products.
Pathways for Greener Retailing
Everything from sourcing raw materials to manufacturing, logistics, packaging, and last-mile delivery can be made more sustainable. Here are some ways to get the green retailing process started:
- Reduce your paper usage – This may sound like an obvious one, but in many sectors, the lack of digitization still means heavy paper usage.
- Streamline your manufacturing process – In most cases, your manufacturing process can be audited for wasted movements, wasted by-products or raw materials, etc.
- Consider renewable energy sources– This is a step that can help reduce costs as well as make retailing greener.
- Invest in the recycling of old goods – Many retailers including luxury companies are going into resale and manufacturing products out of recycled material. This is an indication that the industry is soon going to view green retailing as mainstream.
- Don’t forget your storefront – Make your in-store displays and decor more eco-friendly by using refurbished or recycled materials.
- Rethink Unsold Goods – Samples that are no longer sold can be repurposed or donated.
- Leverage Technology – Using digital showrooming and sample manufacturing reduces costs as well as waste.
- Green Supply Chain – Reduce your carbon footprint through efficiency. Reevaluate your pack sizes, packaging material, warehouse locations, transport routes, modes of transport, etc.
- Second Life Packaging – Businesses are creating packaging made for repurposing. For instance, certain brands have seeds in their biodegradable packaging so that they can be grown into plants.
Communicate Your Efforts
With all your green initiatives, don’t forget to communicate your efforts. Make sure you are transparent about your initiatives and that your consumers know how you’ve taken steps towards green retailing. Customers, Consumers, Employees and other Stakeholders all have their own reasons for preferring green retailing solutions. By being transparent, you can make sure that everyone is aware of what sets you apart.
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What is Retailing Doing Right?
According to a Boston Consulting report, Retailing is responsible for almost 25% of global carbon emissions. To be responsible for almost a quarter of the world’s emissions is significant. Many retailers, however, have taken the matter at hand. Supply Chain remains the channel with the highest carbon emissions. Therefore, the sector is examining the value chain from every angle to reduce waste and emissions.
Big Retailers are Making Green Moves
Tesco in the UK has partnered with Loop, a local startup, allowing its customers to buy products in reusable packages. Customers can now buy more than 88 registered Loop products. They can then get their deposit back upon returning their packaging. Boots UK also implemented a similar approach. In Boots’ case, however, customers would return their product packaging in exchange for loyalty program points.
Online Retailing has also changed practices to reduce impact. For instance, Amazon, has moved away from plastic delivery bags. Customers now receive their Amazon orders in easily recyclable cardboard material. The company has also said that it will keep an eye open for more environmentally friendly packaging and solutions.
What is Yet To Come in Retailing?
According to Deloitte, 55% of consumers opted for a sustainable product or service in 2021. A trend that is becoming more visible, especially among Gen Z shoppers. But consumer pressure is not the only current acting force on retailing. 59% of investors are granting their investments to retailers that share their environmental values.
Green initiatives such as emission audits and better packaging material are the tip of the iceberg. The challenge remains in developing more sustainable products. It also lies in enforcing environmentally friendly choices on material suppliers. The sector is yet to find the right balance between sustainably produced products and affordability. But with growing customer awareness, products’ price tags are not going to be a deterrent. Those shoppers who care about the impact of their decisions would be willing to pay more for greener alternatives.
What Does This Mean for You?
Sustainability is not a one-and-done type of goal to achieve. For your business to achieve it, everyone should be on board. This includes the government or regulators, investors, material suppliers, product designers, and of course, your customers and end-consumers. It’s an ongoing process of improvement.
Remember also that it’s not an all-or-nothing approach. On the contrary, every step counts in the green retailing journey. Start by reviewing processes at your business to identify areas for impact reduction. Set yourself easy to achieve, yet measurable goals. Start small but remain consistent.
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