By: Carl Rydson, Carl Rysdon, Vice President, Retail Industry
Carl leads the Retail Industry team for Ricoh USA. He brings more than 30 years of experience helping retailers and brands solve their complex business challenges.
During his career, Carl has successfully partnered with many of the top global retailers and CPG brands to help them better serve their consumers and improve their bottom lines via a wide range of business transformation solutions in all areas of operation.
Nearly half of all global consumers are choosing to buy from brands with a clear commitment to sustainability. But there’s a paradox about sustainability in retail that often goes unspoken: how do retailers balance the desire for growing profits with the need for more meaningful sustainability efforts?
Because the demand for new products will never go away, the risk to the environment never will either. So, what’s a retailer to do?
Thankfully, despite the gravity of the issue, there is a lot to be optimistic about. In fact, 86% of consumer industry CXOs believe that “with immediate action, they can limit the worst impacts of climate change and move toward an improved future.”1
Here’s a look at ways retail businesses can make the most impact:
What you sell
Promoting sustainable products
Retailers can promote products that are environmentally friendly, such as items made from recycled materials, organic and natural products, and energy-efficient products. By offering sustainable options, they are encouraging customers to make more environmentally conscious choices — in fact 50% of Canadian consumers are willing to pay more for sustainable products.2
In addition to product changes, retail businesses can work with suppliers that promote more sustainable manufacturing practices to reduce waste and minimize carbon emissions.
Manufacturers can achieve this with AI, which can identify opportunities for energy efficiencies, prioritize emission reduction strategies and even alert operators to production anomalies. IoT devices like smart sensors and meters can be installed within manufacturing plants and warehouses to monitor, analyze, regulate and control energy usage. And even before products get to their QC stages, tools like AI visual inspection can identify defects and ultimately reduce unnecessary waste in the production process.
Antiquated buying strategies that were once based on high volumes and low unit prices, have contributed to excess product that ultimately must be disposed of in some form. For retailers, the solutions have been less than environmentally ideal – but without many other options previously available, products have been incinerated, destroyed, or simply shipped off to landfills.3
But today, there’s a better way to tackle this growing issue. Retail businesses can leverage technology to optimize inventory management and build more eco-friendly stock levels. By monitoring sales trends and analyzing data from a variety of sources, automated systems and advanced analytics can help retailers better predict inventory levels and reduce the likelihood of overstocking product—something that benefits not just the environment but their bottom line.
Automation tools can also significantly reduce the amount of paper that’s required in the inventory management process. By digitizing the workflow retailers can keep digital inventory records, attach POs, receipts, even manuals to specific item records.
Shelf replenishment and dynamic pricing
In Canada, grocery stores produce nearly 1.31 million tons of food waste every year which contributes to the staggering 20% of national methane emissions that come from organic landfill waste.4
Thankfully, technology can be a powerful ally for grocers and can help drive more eco-friendly retail practices. For example, digitized tracking products like 2D barcodes are helping food retailers improve inventory forecasting and expiry management of perishable foods while also addressing recall readiness. Or predictive data analytics that can quantify how weather changes will affect the sale of certain fresh food products based on past sell trends.
And, as food items approach their sell-by dates, dynamic pricing systems can help retailers automatically markdown items, making them more likely to be purchased instead of wasted.
How you sell it
As online purchases continue to increase, so do returns. And with only 50% of returned products going back on the shelf, the rest end up in landfills.5 So while retailers might be making more eco-friendly products, if they still end up in the dump there’s no real sustainability improvement.
Augmented reality can help reduce the rate of returns by helping online shoppers make better buying decisions. By empowering customers with better ways of buying products, retailers can improve their return rate and reduce the carbon footprint created by moving product back up the supply chain and into the landfill.
Where you sell it
Retailers can improve energy efficiency and produce fewer emissions from their stores or facilities by using more renewable energy sources such as solar or wind power, LED lighting, and optimizing HVAC systems.
AI can optimize energy consumption by analyzing data on occupancy, temperature, and lighting levels to adjust heating and cooling systems and turning off lights and equipment when not in use.
With positive pressure from executive leadership, consumers and investors, the retail industry can move the needle on sustainability.
The retailers that get it right will focus on making changes to what they sell, how they sell it, and where they sell it.
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