Tweet me!I have just returned from the FMI Sustainability Conference in San Francisco so I am fully saturated with a fresh, no pun intended, view of where retail grocers are in the quest towards sustainability. In a word, they are still confused! They aren't confused about what they need to do, so much, as to what to say they are doing and how much of a leadership role they should take.
Retailers, in general are tackling the low-hanging fruit – the cost reduction and efficiency projects, but they are very sensitive, even hesitant, to characterize these efforts as sustainability driven. They will use the word "green" to refer to LEED building projects or renewable energy utilization, as there really is no argument there. They will also talk about their efforts in the area of Corporate Social Responsibility such as Fair Trade, Ethical Sourcing and Charitable Giving, but to many "Sustainability" is a precarious thing to claim. Perhaps it's the broad applicability of the word across social, economic and environmental areas – are uses easy to be misinterpreted? I don't know that I can cite an example. "Green washing" is to be avoided, but I think the hype is easily separated from the really tangible stuff.
Retailers also seem to disagree as to what their level of responsibility is when it comes to sustainability. In direct conflict with a previous remark from Lee Scott of Walmart, one retail executive clearly stated that retailers should not attempt to lead or guide consumers towards more sustainable products. Someone sitting next to me responded – "that's unconscionable"! Market dynamics should drive the marketing, expanded assortments and pricing of "green" products. And guess what, it is!
What is very apparent to me, is that retailers, by just putting one foot in front of the other, responding to consumer demands, regardless of thier position on sustainability, are transforming their organizations to reduce energy consumption, eliminate waste and sell more sustainable products. The projects that improve recycling processes, energy management systems or are related to mechanical systems, like HVAC and refrigeration are pretty straightforward. But, the challenge that will lie ahead, if they haven't developed a holistic sustainability strategy about products and product information requirements, is one day they'll realize that they have ended up with many new applications to manage supplier product lifecycle assessments – one for produce, one for dairy, one for seafood, etc… - others to manage supplier scorecards – other traceability applications to prove the pedigree of "wild caught" seafood, organic produce and other products and others to translate relevant product info into consumer ready terminology for their access and edification.
This isn't futuristic – it's happening. For example, have you seen the organic chicken that comes with a tracking number? Consumers can go on the web and check the packages origin just like a shipping package from FedEx or UPS. In my opinion, market dynamics are driving consumers to live more sustainability and to seek sustainable products. What do you think?
By Leslie Hand, Research Director, Global Retail Insights (Source: IDC Retail Insights, August, 2009)
