On July 25th, we hosted a panel in Bentonville, AR addressing Technology Enabling Sustainability in Retail. We spoke alongside leaders in innovation and sustainability from Walmart, SAP and Accenture on the different initiatives our organizations are implementing to contribute to a more circular and sustainable industry. We’ve put together key takeaways from the discussion as well as recommendations for companies hoping to develop more sustainable practices.
Pictured from left to right: Laura Phillips, SVP Global Sustainability, Walmart; Debbie Krupitzer, Innovation Lead, SAP; Ann Starodaj, Head of Sustainability, Optoro; Nicholas Whittal, Managing Director, Accenture.
Combating Plastic Waste is Essential
- Plastics are becoming a large issue for consumer packaged goods (CPG) brands, with many products depending upon single use plastics, but only 14% of plastics are actually reused or recycled.
- There aren’t many incentives in place for waste management companies to recycle, increasing the buildup of plastic waste.
- Walmart and many other large retailers have made public statements to eliminate waste from their processes and have created stricter guidelines for their private brands and suppliers.
Circularity is Key
- The idea of a circular economy, simply defined as minimizing waste and maximizing resources, is talked about frequently but difficult to put into practice.
- The growth of ecommerce and omnichannel retailing has contributed to an influx of returned and excess inventory and retailers have encountered challenges in handling and reselling these items.
- Many retailers and brands have begun implementing programs that encourage their consumers to bring used products back to their stores.
- Take back programs allow brands more visibility and control into how their product continues to exist in the market after the primary consumer has used it.
- A popular example of this is the Re-Commerce initiative REI has in place.
Data and Technology are Your Friends
- Acquiring actionable data is an important step that enables retailers to assess their impact and make more sustainable decisions.
- Technology has enhanced visibility into the supply chain, especially when it comes to reverse logistics and returned inventory.
- Retailers and brands can enhance their sustainability strategy by capitalizing on technology and the large influx of data.
- Many new technology companies have been founded with goals to help retail become more sustainable and ethical. For example, EON has developed RFID tags that are being sewn into clothing. These tags contain information on sourcing and instructions on how to recycle the product at end-of-use.
- In the last 15 years, the sustainability community has made impressive strides to bring environmental responsibility into private industry.
- The younger generation of millenials have an increased interest in sustainability and the environment, specifically in regards to the products and companies they shop with.
- Sustainability is not only good PR; it’s good business.
- 61% of customers are willing to pay more for visibility into product origin.
- Retailers should find ways to engage this consumer mindset by creating business models that incentivize and enforce these behaviors.
Recommendations for Business
- It’s important that retailers and brands see the value of implementing sustainable initiatives to ensure the longevity of their organizations.
- The favorability of circular economy is growing. It’s imperative that retailers find processes to eliminate product end-of-life and encourage reuse.
- Many large retailers like Walmart have pledged to stop working with suppliers who use unsustainable practices and materials in their packaging and supply chain. Ensure that your organization is aware of how products are produced and their typical life cycles.
- Think about your consumers and how you want them to engage with your product. Be sure to include recycling instructions or green labels on packaging to ensure your customers are educated on how to treat your product after end-of-use.
- Bring sustainability into your conversations and your ecosystem. Talk to your suppliers, your merchants, and your partners about this and how you can influence others to tackle this together.