The Candid Voice in Retail Technology: Objective Insights, Pragmatic Advice

With Fuel Prices Rising, Will Green ‘Reemerge’?

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When fuel prices skyrocketed back in 2008, “green ” was everywhere . Advertisements, television shows, consumer goods – all were being presented through a lens that used a greener filter than anything we’d seen before. For RSR, it became the perfect opportunity to benchmark the retail industry’s overall feelings and actions about environmentally sustainable practices, a topic that’s long been important to us.

What we found, however, is that while the topic was vastly intriguing for retailers to read about (making for some of the most widely-read reports we’ve ever published), when it came to answering the survey, retailers felt their hands were a bit tied. They knew there was tremendous waste in the supply chain, but they had little leverage in making it more efficient (even more so for smaller retailers). They knew the amount of packaging being used in the products they were selling was completely over-the-top, but again, they were unable to control it. Instead, they would have to settle for making changes the one place they knew they could: reducing the amount of energy consumed in their own stores and offices.

But yesterday, while I was in Atlanta attending the NRF’s annual Supply Chain Summit, green was all the rage. During my own presentation of our latest Supply Chain Report’s findings, the audience had questions about the eco-benefits of the evolving supply chain: with customers shopping across channels in ways that were unthinkable just a few years ago, and with retailers’ supply chains in drastic need of overhaul to fulfill orders across channels with greater flexibility and efficiency, what were the eco-related cost implications? Would DC bypass eliminate touch points, waste, and ultimately save money? What would using store inventory to fulfill orders across channels mean for transportation costs?

American Shipper’s publisher, Jim Blaeser, hosted a panel of retail executives entitled “Leaders Find Green ROI “. Within, Home Depot shared stories of how it has seen vast savings by making sure trucks are just loaded a little more efficiently. Across its vastly distributed enterprise, it’s reduced the amount of energy wasted in stores by simple efficiencies (including the simple task of painting roofs white) adding up to real bottom-line savings. It recycles its own corrugted cardboard, converting it into the packing boxes it sells, and because of the savings associated with the process, can offer moving/packing boxes for a lower cost than competitors. And in Home Depot’s case, customers are driving demand for greener products – the difference being the company is listening to their demands. Five years ago, Home Depot offered 2,000 eco-friendly certified products; today that number is over 4,500. And in large part, the demand came directly from consumers, via social media, emails and blog postings asking for alternative solutions in their daily lives.

In many of the cases presented on the panel, company-wide efficiency processes were born of the actions of a single, conscientious store associate. For example, Boscov’s has completely changed the packaging and recycling structure of the materials used in shoe packaging after a store manager discovered an eco-forward system being employed by one employee at a store in New Jersey. And at Kohls, the executive team recently suggested that it might want to scale back the number of promotional flyers printed for in-store distribution. The marketing department disagreed, insisting they were a necessary component of the business – it wasn’t enough to get flyers into customers’ homes via mail and newspaper delivery, they must be in stores, as well. One store decided to save all of its unused store flyers for a month and return them to the marketing department’s corporate offices. The stack of unused printed materials was impressive enough to convince the marketing department these flyers were overkill, and with amended printings, the company saved millions – literally millions – last year. That’s real money, and it was born of a grass-roots initiative.

In short, eco-friendlier actions lead to cost savings; always have and always will. And for retailers willing to pay these opportunities mind, reevaluate the tasks they perform day-in and day-out and how they can be made more efficient, there is money to be saved/made. They hype may have died down – and that’s a good thing – but green hasn’t gone anywhere at all. The question is what happens to the hype cycle on the consumer side when prices climb at the pumps this summer.

 



Newsletter Articles May 8, 2012