The retail industry is a big player in the global economy and in people’s live, and thus is a sector with the ability to reshape sustainability. Here are a number of trends to watch out for:
1. Corporations leading the way
More and more retailers are becoming active players in creating more pathways in sustainability. The big corporations are stepping up to do their part. Ikea, for example, has announced it plans to invest $1.7 billion in renewable energy projects.
In 2014, Ikea added 87 wind turbines to its renewable energy facilities, bringing the total to 224. It also installed 150,000 solar panels, increasing the total to 700,000. IKEA has solar running at almost 90 per cent of its US store locations. That totals almost 40 megawatts worth of generating capacity.
The world’s biggest retailer, Walmart, has more than 335 renewable energy projects in operation or under development, providing more than 2.2 billion kilowatt hours of renewable electricity annually. Together with renewable electricity from the grid, 24.2 per cent of Walmart’s electricity needs globally are supplied by renewable sources.
And Apple chief executive Tim Cook has announced that his company is planning to build an $850 million solar farm in California. Apple expects this farm to supply power for its Silicon Valley operations, which includes its Cupertino headquarters, stores and data centre. It is expected to be completed in 2016.
2. More sustainable product lines
Big retailers are now starting to take a serious look at their supply chain to create more sustainable offerings. Target, for example, has introduced “Made to Matter – Handpicked by Target”. This is a first-of-its-kind collection that brings together 16 leading natural, organic and sustainable brands. This covers six categories – baby, beauty and personal care, grocery, healthcare and household – and the sustainable products in each category can be found throughout its US stores.
In the UK, Sainsbury has launched the country’s first certified sustainable tuna sandwich. The fish is sourced from the Maldives using a low-impact pole and line technique. And in Australia, Woolworths says it’s working on high-risk areas like forestry products and palm oil, and has banned palm oil from its private label food products.
3. Enter the number crunchers
According to Ernst & Young, chief financial officers of companies are now playing a more active role in sustainability. We can expect this trend to continue. EY data shows that 65 per cent of companies claimed their CFO had become involved in sustainability. Respondents cited cost reductions (74 per cent) and managing risks (61 per cent) as two key drivers of their company’s sustainability agenda. Another reason for the growth of interest from CFOs is that 66 per cent of companies said they had seen an increase in enquiries about sustainability-related issues in the past 12 months from investors and shareholders. Also, 80 per cent of companies saw sustainability initiatives creating more business for them. One thing is for sure: with more CFOs involved, you can bet sustainability will increasingly become a first order issue for companies.
4. Rise of the watchdogs
As more companies claim to embrace sustainability, we can expect more monitoring of their activity, not to mention ratings systems holding them to account. Rankabrand is a European non-government organisation. It conducts ratings of hundreds of consumer brands based on a detailed methodology that considers labour practices, climate change and other environmental issues. It ranks brands from A (best) to E (worst). In the electronics sector, Apple and Nokia get high rankings but Samsung, LG, Asus and HTC are right on the bottom.
Ethical Consumer UK is a UK non-profit that considers the environmental, human and animal impacts of companies. Brands are given a score out of 20. It ranked M&S as the most ethical clothing retailer.
Ethical Clothing Australia ranks how Australian made clothing manufacturers comply with labour standards, climate change and other impacts on the environment, such as water use and pollution from non-organic cotton production. 3Fish, Carla Zampatti, Bianca Spender and Cue get high rankings. Wrangler, Lee and Tommy Hilfiger are among the worst.
5. Pop-up shops
Brands are moving into existing storefronts for limited periods and making it their own without renovation and expensive repairs. Combined with mobile payments and online shopping, it’s a more sustainable way for retailers to do business.
Think of the lumber allocation, energy costs, and manufacturing equipment that goes into setting up a shop. As the Sydney Morning Herald reports, pop-up shops are on the increase in Australia. Even Myer has opened pop-up sites in Melbourne at Southern Cross Station and Sydney’s Bondi Junction to sell last-minute small items.
And in the US, Zappos, which is famous for speedy delivery and free 365-day return policy, has opened a pop-up store in Las Vegas to be open 24 hours a day. Consumers can view products in the store and scan them at kiosks or with their smartphones to see additional colours and sizes from the online selection. Zappos will be using a technology called ShopWithMe that will allow consumers to put merchandise into both a physical shopping cart in the store and a digital cart on Zappos.com and check out. Think of the real estate savings.
6. The sharing economy
The growth of phenomena like Uber and Airbnb has helped turn the sharing economy into a major force. While some might say that could hurt retailers who sell shareable products, the opposite seems to be happening. As reported by NRF, U-Haul has an Investors Club that encourages crowdfunding of trucks. Naked Wines offers customers in the United States, United Kingdom and Australia the ability to crowdfund independent winemakers for a monthly investment. In return, they get discounted wines.
RocksBox allows subscribers to access a “personalised rotating closet of designer jewellery” sent in sets of three at a time. H&M collects and repurposes used clothing through a garment recycling program, and IKEA has introduced a second-hand campaign in Norway to let customers sell used items during a two-month promotion. IKEA has even turned its Facebook page into a digital flea market on selected days.
7. Farmers markets
No matter where you live, there’s every chance of a farmer’s market around the corner. Urban Ecology Australia says it preserves farmland and sustainable agriculture, supports and stimulates the profitable trading, viability and business growth of independent primary producers, hobby farmers, community and home gardeners, and associated produce value-adders, while providing customers with regular supplies of fresh food and access to improved nutrition.
Farmers markets are also good for building communities. As Jane Adams, spokesperson for the Australian Farmers’ Markets Association says, consumers are more inclined to shop for seasonal, fresh food at a farmers’ market because it ticks all the environmental boxes. And, she says, it’s a social and educational way to shop.
“I think that resonates with people,” Adams says. “If you shop at farmers’ markets you’ll see shoppers talking to one another as well as to the farmers and the producers. It’s a very friendly and healthy way to do your shopping.”