Expert Eye: Four Steps to an Impactful Sustainability Programme for Retailers

Capgemini’s Tim Bridges outlines how retail organisations can achieve impactful and positive change through sustainability strategies

Written by: Tim Bridges



There’s no longer any doubt about it – consumer preferences and purchase decisions are strongly impacted by sustainability and ethics, and an organisation’s stance on them, according to new research from Capgemini. 
 
Nearly four in five consumers want to make a difference in saving the planet for future generations, and more than three quarters are concerned about the humane and fair treatment of workers; these trends have been further accelerated by COVID-19.
 
We know that consumers are more attuned than ever to brand authenticity and purpose. When asked, 78 percent of consumers said that consumer product and retail organisations (CPR) have a larger role to play in society, and 53 percent prefer to engage with CPR organisations that showcase strong sustainability credentials and embody a sense of purpose.
 
Furthermore, climate change and societal wellbeing are impacting consumer preferences which, in turn, have huge knock-on effects for CPR organisations. The bell has rung for corporate change, and while most organizations recognize this, they are underestimating the pace that is needed to transition to sustainable practices.
 
Sustainability is linked to a common misconception around cost, with many business leaders believing that it diverts money from other business priorities. However, it’s been well documented that eco-innovation boosts revenues, and our own research supports this: 77 percent of executives pointed to an increase in customer loyalty as a major benefit from sustainability initiatives and 63 percent have seen a revenue uptick.
 
How to achieve impactful, positive change
 
The good news is that nearly half of CPR organisations have started to deploy sustainability initiatives across some of the regions in which they operate. 
 
However, when it comes to achieving this at scale, fewer than a quarter have accomplished widespread coverage. There is clearly work to be done to meet consumer expectations and for these initiatives to have a positive impact on the planet. Here’s how organisations can achieve impactful, positive change:  
 
Empower employees and consumers: First, internal changes need to be infused into an organisation’s culture for success. Business leaders must make their employees advocates of sustainability and create a culture of awareness and responsibility across the enterprise value chain. 
 
On the consumer front, companies also have a huge role to play in educating and supporting their consumers. By making the environmental and ethical footprints of their products clearer, consumers can make choices that suit their beliefs. In line with this, organisations should assess how their ranges match their target customers’ values and sustainability ambitions to ensure they are aligned. This means evaluating what’s on the shelves, how much it costs, and the role loyalty and reward can play in driving positive incentives for change.
 
Position technology at the core of sustainability initiatives to drive value: New technologies can help businesses to leapfrog their existing sustainability initiatives and open untapped innovation opportunities. The possibilities are vast – from digital twins, to blockchain, to AI. 
 
One successful example is British cosmetics retailer Lush, which is using AI and machine learning in its ‘Lens’ app, which lets customers use their phones to scan the company’s packaging and label free products. This gives the shopper product information like ingredients, price and even videos of how to use them – and simultaneously allows the retailer to gain a deeper understanding of its customers’ needs and desires.
 
Build in robust sustainability governance: Without an action plan, accountability for sustainability is ineffective. Successful management requires a clear strategic vision and committed leadership. Underpinning this must be an in-depth governance structure that helps an organisation to scale its sustainability strategy across business units, overseeing the objective-setting and reporting processes, and strengthening relations with external stakeholders.
 
Collaborate with the broader ecosystem for a greater impact: Sustainability cannot stop at the perimeter of one’s organisation; partners, suppliers and distributors must also be considered. Sustainability-led collaborations with an organisation’s ecosystem can help alleviate the environmental and social impacts deeply embedded in the sector’s supply chains.
 
As with all transformations, the road to long-term, impactful change will involve an overhaul of internal systems, services and operations. It’s a big task, but CPR organisations must move quickly to stay competitive. To turn ambition into reality, they need to accelerate sustainability at scale, exploiting technology’s potential to drive and realise the sustainability imperative, educating and empowering consumers and employees, putting robust governance in place, and extending sustainability to the entire ecosystem.
 


About the Expert 
 
Tim Bridges leads Capgemini’s Global Sectors and the Consumer Products, Retail, Distribution (CPRD) global sector practice, a portfolio that includes major global retail, fashion, restaurant, consumer products, transportation, and distribution brands such as McDonald’s, Coca-Cola, Meijer, Office Depot, Domino’s, and Unilever.