It’s not easy being a retailer today. These organizations may have hundreds or thousands of sites across the globe, which makes it a challenge to plan and execute a holistic sustainability strategy. But with the right planning and implementation, organizations can quickly transform operations to increase economic returns and satisfy stakeholder demands.
What Challenges are Retailers Facing Today?
With hundreds, or even thousands, of sites across the globe, retailers face big challenges gathering, normalizing and managing the data from thousands of vendors that provide insight into cost and consumption across energy, water, waste and carbon. To add to this complexity, the industry is also amid a major transformation in its business model, driven by the impact of online sales. For some, this transformation has led to smaller store footprints, larger distribution centers, and a more complex distributor supply chain. This makes portfolios even more disparate and harder to manage. Last but not least, retailers must manage disparate national, state, or local regulations on waste, including single-use plastic bans, recycling requirements, fines for hazardous waste and more.
What Retail Trends Support the Sustainability Transformation?
- As more regulations take hold (for example, plastic bag bans or recycling regulations), and as online orders increase, retailers must alter their operations. A sustainability strategy informed in part by waste audits and regulatory tracking will ensure retailers are compliant with more sustainable packaging both in stores and at distribution centers.
- Customers, employees and shareholders demand more transparency into sustainable business practices and a reduction in energy, water, waste and carbon. This makes annual reporting on sustainability goals – and progress toward those goals – an essential task.
- Frequent employee turnover affects how employees feel about company mission, they don’t necessarily support sustainable practices. However, a solid sustainability strategy supported from the top down is also an employee engagement tool and a reason for employees to stay, reducing turnover.
What Should Retailers be Thinking About?
Some of the following actions can help retailers address current trends and external pressures while maximizing savings and resource efficiency.
- Develop and communicate a sustainability strategy from top leadership and engage employees at every level of the company to participate, from the CFO to the store sales associates. Engagement and a sense of ownership inspires participation in meeting company objectives and greater satisfaction with less turnover.
- Utilize data to gain a better understanding of consumption by site and set benchmarks to help identify and prioritize efficiency efforts to see greatest returns. However, evolving store profiles, as well as the expansion into global markets, will complicate analysis of cost and consumption data, so there should be a method to normalize data.
- Track varying regulations for water, waste and energy across the entire portfolio and be prepared to implement operational changes to reduce resource use. Once changes are rolled out portfolio-wide, you’re more likely to be compliant with new regulations ahead of time.