Beneath the surface: 4 ways retailers can drive sustainability from the bottom up

Chris Biggs, Global Head of Retail for the Boston Consulting Group (BCG) recently shared robust research data suggesting that 90% of consumers are more concerned about sustainability than ever before. While further figures from BCG around today’s consumer attitudes speak for themselves:

• 41% recognise that recyclable choices and sustainable packaging influence their buying decisions
• 70% are willing to pay a price premium of 5% for sustainable products
• 60% of consumers going out of their way to recycle and purchase products in sustainable packaging

Sustainability practices rapidly moving mainstream are plain to see on our high streets and with online brands. In fashion, Boohoo, Zara and H&M are encouraging customers to reuse and recycle unwanted clothes through in-store collection points and aggressively promoting sustainable ranges. And close to our HQ, Asda’s flagship sustainability store in Leeds continues to add new products to its refill zone, with other stores and brands set to follow suit.

But these high visibility shifts in sustainable retail are just the tip of the iceberg. There’s a lot more that progressive retailers can do that sits below the surface, out of consumers’ eyelines. From recycling and waste reduction to saving water; there are many obvious ways retailers can push the sustainability agenda. But these are initiatives and approaches with the potential to make a bigger difference to climate change longer-term and this is where we, as supply chain experts, can really play our part.

Initiatives consumers can see

Whilst those looking for short-term kudos and quick wins may scramble to redesign packaging and create merchandising that bends marketing messages to name-check the circular economy, there’s much more to be done. Moreover, consumers are justifiably sceptical about the authenticity of many brands’ sustainability claims, creating a strong ‘push’ for businesses to go the extra mile and ensure their words and actions are truly aligned with enduring strategic initiatives.

For retailers to truly evolve with the consumer in 2022, Kyle Monk, Director of Insight & Analytics at the British Retail Consortium suggests that sustainability “must be at the heart of their business and across their entire supply chain”.

Sustainability at the heart

Here are four powerful ways that supply chain strategy can support ESG and CSR agendas:

1. Reducing carbon footprint

The right supply chain technology can play a central role in planned reductions to carbon footprints. With a wealth of smart decision-making data to hand, supply chain professionals can become better equipped to make good choices on how, when and where they move goods, clued up on the carbon credentials and the implications of different modes and distribution processes.

2. Better inventory management

Next-level inventory management with clear visibility across the product life cycle can also play its part. Gaining visibility, data and insight to drive efficiencies across an entire product lifecycle, from purchasing and cost-base through to stock holding and store delivery can help to move organisations away from a buy-one/sell-one model. Within the supply chain, the evaluation of local or ESG-compliant sourcing options, use of alternative trade lanes and re-routing all have potential parts to play.

Customer gratification is also a key driver. Consumers are increasingly opting for hybrid-shopping, rather than just online. Confidence the products they want are available is a sure-fire route to securing customer satisfaction and loyalty. But in today’s constrained market, this is no easy feat. Strong relationships across expert networks, a problem-solving approach and rapid response must go hand in hand with data-driven decision-making capabilities. On both fronts, strong supply chain management partners can help with the heavy lifting to put smiles on the faces of today’s discerning shoppers.

3. Tightening up logistics

We know supply chain sustainability can be significantly boosted by focusing on:

• the mode of transport used
• the routes used
• the frequency of booking

Beyond that, we envisage that progressive supply chain professionals will be exploring more technologically advanced solutions. Expect more radio-frequency identification (RFID) and tracking technologies, creating the kind of visibility that empowers increased agility – as well as helping to identify areas where inefficiencies need to be tackled.

4. Enabling mutually beneficial collaboration

When it comes to developing an agile growth strategy that begins to tick sustainability boxes in a meaningful way, retailers will need to move away from a reliance on internal-only data. Collaboration with partner organisations and suppliers is set to enable the development of a “thinking” supply chain, seamlessly drawing from multiple data sources to synthesize insights.

What’s more, tech-enabled two-way communication with suppliers can begin to add an extra dimension to sourcing strategies and unlock supply chain improvements in line with sustainability principles. Technology enabled collaborations can deliver mutual advantages and points of difference for those organisations that are prepared to react quickly, drive strategic decisions and push hard for transformational change.

Out of sight, out of mind?

We know that the role of supply chain in sustainable retail practice may be ‘hidden’ from consumers, but better partnerships, communication, problem solving and agile decision making – all underpinned by smart supply chain data and technology – are likely to provide a firm focus for retailers looking to further their sustainability agendas over the year ahead and beyond.

If you’d like to chat to us about your 2022 supply chain sustainability goals, don’t hesitate to get in touch.