Through a special arrangement, presented here for discussion is a summary of an article from Retail Paradox, Retail Systems Research's weekly analysis on emerging issues facing retailers.
In our first benchmark report on environmental initiatives in retail, What Can Green Do for You? released in May 2008, 86 percent of survey respondents reported packaging of private label product as the strongest opportunity they saw to drive eco-brand awareness. Soon afterward, the Great Recession brought bread and butter cost-savings (most especially in stores and in the computer room) back to top of mind awareness.
Behind the scenes, however, eco-packaging moved forward. Most of the single-serving bottled water we buy now comes in bio-degradable plastic bottles. Most recently, retail giant Whole Foods and CPG goliath Procter & Gamble have passed regulations for sustainable and recyclable packaging.
Whole Foods used the "M" word (mandate), requiring suppliers to use easily reused or recycled, non-toxic packaging materials. The ideal scenario is to switch to glass whenever possible. This follows other mandates on organic beauty products passed by the chain this summer. Concurrently, Gisele Bundchen, an endorser of Pantene's products, announced P&G's plans to switch to sustainable packaging made from sugarcane. Other product lines, Pro-V, CoverGirl and MaxFactor, will follow over the coming two years.
The point here is that the switch to greener packaging our retail respondents identified almost three years ago is slowly coming to fruition. We're fairly certain the switch is either cost-neutral or cost-saving, but both announcements focused much more about brand building. While it has been fashionable to talk about sustainability, there were many who thought it was all about "green-washing" -- pretending to be green, rather than actually taking any meaningful action. These announcements tell us that some major players are taking sustainability seriously. After all, these kinds of changes don't go into place overnight.
This year,
we're running our third annual benchmark study on sustainability.
Early responses are interesting:
- One half of respondents report green initiatives have reached the point of being "strategic initiatives for the entire enterprise." Thirty percent report it as a tactical initiative for specific departments.
- A plurality, (32 percent) believe they haven't yet identified all the ways the "green agenda" will impact their enterprises. In other words, they expect more change is going to come.
- While more than tw-thirds still report cost reduction as their primary motivator for green initiatives, 51 percent believe it's just the ethical thing to do.
- Packaging and store operations energy management remain the biggest opportunities
for cost reduction.
Ironically, while retailers continue to use green as a brand builder, they also seem ahead of the customer. Sixty-four percent report their customers aren't yet demanding greener products or storefronts.
Discussion Questions: How has the recession affected the retail industry's movement toward sustainability? Are retailers looking to sustainability as less of a cost-reduction maneuver and more of a branding tool? Where do you expect to see progress in the years ahead?