-- BY VAIJAYANTI KHARE
Retail is that part of a country’s economy that is made up of businesses that sell goods through multi store malls, boutique chic stores or mom & poppasals, on streets and crossroads, at markets and bazaars and souks, at trade fairs and exhibitions, by mail-order, internet, door-to-door, and even the home-stores.
The retail industry in all its forms is among the most public of industries. Retailers employ millions and directly enable most consumer purchases. That puts them in a unique position to advance sustainability by educating consumers and offering products with recycled content, durability, and ethical supply chains. On the other hand, retailers must respond to the market at large, which can lead to challenges in influencing consumer behaviour.
One cannot help but notice the increasing and thriving global names on Durbar Marg, Lazimpat, New road, Kumaripati and even downtown Baneshwar (airport road), or the likes of CG Mart and KK Mart vying for locations, or the competitive presence of electronic and electrical appliance stores whether home-grown, china-stamped or mega brand franchised, as also the ever replicating Bhat Bhateni stores, city Malls and the renewing of stores in Patan, Thamel, Bhaktapur, Ring road, Thapathali, Tripureshwar, Bouddha and more. This pattern of retail outlet growth in Kathmandu is mirrored in other cities and semi urban towns. Almost all the business houses talk of their beginnings into business through this retail-at-your-doorstep model.Retail has been the main stay of business and continues to be so.
Retailers can go a long way to advance principals of sustainability in the products they sell, the way they treat stakeholders both internal and external, and address the big environmental and social challenges of our time; and continue to derive financial value from these activities, infact, even increase the goodwill, visibility and marketability of their products.
As more favourable economic conditions slowly return, retailers envision a prosperous and profitable future but they must manage growth while accounting for a Responsible and Sustainable retail model.
Evolving technology, changing supply chain models and consumers empowered with information on retailers’ business practices are each impacting retail and changing long-established standards in the industry.
Technology, Big data, Demographics, New consumption patterns and Resource constraints are the five forces impacting retail, each of which brings in unique pressures and requires careful consideration from the C-suite before a sustainability strategy can be mapped out.
All these trends converge in one area of business: Sustainability.
While sustainability plans may vary slightly with different retailers depending on size, number of locations and regulatory oversight, there is no denying that these factors affect every retailer in some significant way or another. There are two classes of sustainability performers – contributors and leaders, depending on how confident retailers are in their ability to influence consumers and suppliers.
Leaders & Contributors
Leaders are more likely to impose strict sustainability criteria on their supply chains and act more proactively towards their consumers, supplying more sustainable products.
Contributors concentrate on managing down their direct environmental footprint and on working with own-label products to reduce impacts and provide consumers information on sustainability issues and lifestyle changes.
As with any fast-moving business phenomenon, there are some who are content to sit on the sidelines while others blaze a trail for the industry. However no company worth its name can afford a passive approach, as public pressure will not abate. One recent study found that 93 percent of Asian consumers expect companies to do more than just make money, and only 16 percent believe that these companies have made any positive impact.
Although it continues to be a challenge, green retail has been gradually gaining ground over the past decade, particularly as corporate sustainability programmes have become more developed and the benefits to the business in terms of economic, social, and environmental impacts are more obvious. As retail has come to be seen less about buying goods and more about creating experiences, consumers increasingly show a preference for shopping in environmentally friendly environs. That change in the mindset has opened the door for increased corporate funding and additional resources to support retail sustainability programmes.
Factors that Influence & Potential for Improvement
Energy, Water, Waste reduction, and Site Maintenance are the four main influencers on retail operations.
As Energy use represents the largest direct expense for most shopping centres, reducing energy use has an immediate impact on retail sustainability, while simultaneously providing the largest potential for lowering costs. Techniques can be integrated into new retail construction (or adapted for existing), including renewable energy use, reducing energy demand through energy efficient lighting, and recycling waste heat.
Water represents another major environmental consideration for retail operations. In no uncertain terms, shopping centres use a tremendous amount of water. The use of potable water can be reduced significantly, by employing water conserving plumbing fixtures and installing sub-metering to track water consumption.
Waste reduction is a key aspect of an effective sustainability programme. In addition to ways of diverting waste from landfills and incinerators, operators should consider dividing their waste streams into items that can be recycled or reused and those that will end up in a landfill. Decreasing the volume of items that ultimately end up in a landfill potentially lowers landfill tipping fees, while providing environmental benefits that resonate with consumers who are likely to see the direct correlation with their own recycling efforts.
Finally, retail site maintenance must be considered. A sustainable operations plan needs to address cleaning external facades, sidewalks, and common areas, and what paints and solvents will be permissible. All choices must clearly reflect environmentally sensitive practices. For renovations, operators should consider installing light or reflective roofing materials that reduce the urban heat island effect and reduce energy consumption.
A page from Others’ Initiatives
The SWITCH-Asia programme, is one of the largest partnering and co-operation programmes promoting sustainable consumption. It supports over a 100 projects to develop innovations that help reduce their waste, improve their energy intensity and inculcate consumer behaviour.
In Indonesia, the SWITCH-Asia programme cooperated with the Surabaya and Yogyakarta city governments to develop sustainable lifestyle initiative pilot programmes. The approach to change behaviour and habits is to motivate rather than educate the people involved through a co-design process, based on the belief that a self-enhancing movement would gain its own momentum. The goal is that by 2020 sustainable consumption habits will be well established. In Surabaya, schools compete with each other as part of a campaign on energy and water-saving and other sustainable consumption patterns. Through the schools, these activities reach out to hundreds of households and families. The programme also includes training journalists on sustainable consumption and production, working with bloggers and photographers with competitions, and convening editor roundtables to discuss media policy and strategy on environmental issues.
The pilot campaigns provide information and experiences that can be used for further replication and scaling-up. These examples show that sustainable retail requires a comprehensive and integrated approach. Urban infrastructure, transport and waste management, renewable energy installations, energy-efficient buildings and cleaner retail spaces, need to be complemented by sustainable consumption and lifestyle initiatives.
SWITCH-Asia in India has brought in the Green Retail India project. Working with retailers in metros and major cities across India, the project has used an ambitious sustainability criteria to establish 30 pilot stores from four major Indian retail chains. A first baseline study estimates a 40 percent reduction in energy consumption in these pilot retail stores through ‘simple’ energy efficiency measures, a 30 percent reduction in solid waste, a 40 percent decrease in water use and wastage and a 90 percent increase in site maintenance and cleanliness. Based on the experiences of pilot stores, a roadmap for sustainability for the Indian retail sector is currently being developed.
SWITCH-Asia in China has a project that aims to increase consumer awareness about sustainable lifestyles and green products in the cities of Beijing and Tianjin, which is being implemented in close cooperation with the consumer associations of both cities. Consumer surveys indicate that the main obstacles to greening consumption are that many consumers do not understand what green products are and that available information about green products is considered unreliable. In addition, the price of green products is perceived to be too high. Less than 10 percent of consumers would be willing to pay 10 percent more for energy-efficient appliances. For organic vegetables, more than three quarters of consumers are willing to pay up to one third more, reflecting concerns about contaminated food in China. Some of the challenges include Chinese consumers’ lack of understanding and lack of trust in product labels.
Co-partner a Green and Responsible Retail
A sustainable and responsible retail has two sides, then. On the one hand, the supplier in terms of distributors, dealers, stores ‘n shop-keepers, vendors and all such traders, and on the other, the Consumers. And for sure, there are methods to make it Green and Responsible. We, the new-business-agers have to be the Initiators of Innovative and Effective methods. Not wait for regulations and oversight bodies, not depend on associations and federations, not hide behind the sloth and slug of our colleagues and neighbourhoods and not play dumb or play charades. It is time we become trailblazers, each one of us, and write it out clear, say it out loud for all to see and hear. You are capable of taking the first step. You are more than capable of making a difference. Start Now.
Vaijayanti Khare is known for her dynamic engagements in the corporate, academic, social and development fi elds in Kathmandu over the past decade. Her writings are a refl ection of her hands-on work, insights, studies, success and challenges.