There is a growing recognition among retailers that green initiatives can save companies money – a particular concern given current economic pressures.
Given the fact that damage to a brand’s image may lead to immediate and sustained loss of income, it is unsurprising that the idea of a ‘triple bottom line’, whereby companies take into account ‘people, planet and profit’ to run a successful and enduring business is gaining momentum.
In fact, 49% of the UK’s top 100 retailers are in the process of undertaking ‘significant’ changes to their businesses to make them more environmentally sound, according to a report by retail analyst Martec.
Alongside the identification of increased profit and enhanced brand image, increasing pressure from government legislation to dispose of waste responsibly is an added incentive for retailers to take a proactive approach to waste management. The introduction of last year’s waste electrical and electronic equipment directive (WEEE), put in place to reduce and manage the amount of electronic waste being produced and recycled, highlighted this issue.
While some retailers are taking radical measures to improve their green credentials, including building “eco-stores” that can recycle rainwater and even using the Thames to transport goods to stores, it is important to note that changes do not need to be on such a dramatic scale to have a significant impact on cutting down on waste and reducing energy consumption.
Aspects such as the options offered to consumers at point of service (POS), the route that deliveries take to arrive at a store and the packaging containing goods can all be examined and improved from an environmental perspective and there certainly exists the technology available to help retailers do this.
Overstocking is one example of a problem that affects many retailers. Excess stock often has to be returned by truck to the warehouse, and then out again, resulting in an excessively large environmental impact and higher staff costs.
With more accurate and up-to-date stock control functions, stores can reduce both avoidable transportation costs and the associated carbon footprint, as well as benefiting from gains in productivity.
To help avoid this, retailers can work together to ensure that stock is not making unnecessary journeys. Business analysis technology can provide retailers with detailed information about the number of orders they require, which can then be transmitted to a supplier, who could arrange to make deliveries to multiple outlets, rather than having each retail outlet pick up its stock separately.
The country of origin is also an important consideration for retailers in reducing their supply chain. Clothing retailer, George, for instance, has taken a very forward-thinking approach with plans to stock one million garments designed and produced in the UK.
The proactive decision to support the UK economy and cut down on ‘clothes miles’ is a strong positive message to send out to customers. With this type of strategy in mind, technology companies have built in planning functions to retail software to allow retailers to analyse the journeys products are making from one country to another and their impact on the environment.
For retailers who cannot afford to ensure that all their supplies are locally sourced, dual-sourcing is a useful alternative, whereby retailers source the first batches of a garment from a supplier outside of Europe but source additional stock of the same product from Europe, cutting down on their carbon footprints but still keeping costs low.
The simple alteration of packaging can also impact the transportation of goods. Packaging analysis technology can inform retailers of the most efficient way for items to be packed using the least amount of resources. A decade ago, for example, Nike decided to reduce the number of different box styles it had from eighteen to two, reducing their use of raw material fibre by 8,000 tons per year.