It was clear from the event that retailers from around the world have started to identify the ways in which they can make the most material, positive impact on society and are adapting their strategies, products and marketing accordingly. A number of supermarkets spoke at the event about how they are encouraging healthy diets, pharmacy chains discussed their focus on wellbeing and the BBC’s Blue Planet II team made a showstopping appearance to show us how connecting audiences emotionally to the world was their contribution to conservation.
Technology’s underused potential
However, few retailers are really seizing the opportunity that modern technology provides to make their own operations and supply chains more sustainable or to help their customers make more sustainable purchasing decisions. We already consume 1.7 Earth’s worth of resources, and the devastating impacts of the likes of global food waste, fast fashion and rare earth metal extraction are well documented. More and more, we are seeing retailers taking a stand on these issues and using their scale and purchasing power to tackle problems like unsustainable palm oil cultivation or plastic packaging, making sustainable decisions on behalf of their consumers.
However, considered, strategic use of technology will enable them to go even further. Today, retailers have more information available to them on their supply chains, products, operations and customers than ever before, thanks to the explosion of connected devices and data provided by the Internet of Things and Industry 4.0. These technologies give retailers the power to make vast improvements in the efficiency of all parts of their operations, reducing their direct impacts like carbon emissions, waste and resource consumption. Leveraging these technologies to tackle sustainability challenges is a key focus of the Capgemini Group.
Tackling direct impacts is rightly many retailers’ priority, but industry leaders can make an even greater positive contribution by influencing their consumers’ habits too. Sustainable shopping and consumption patterns attract growing interest around the world, with Nielsen finding 66% of consumers willing to pay more for sustainable goods (up from 50% in 2013), so there are financial as well as moral and sustainable drivers for this. Retailers can now aid sustainable shopping by improving the accuracy, accessibility and availability of product impact information, nudging more people to change their behaviours and reduce their environmental footprints, as well as retaining and attracting customers. The technology, data and means of doing this exist, and need just be applied in a slightly different way, yet very few retailers are taking full advantage of these capabilities. I was asked to speak at the summit about how retailers can do this, ultimately helping push humanity back to consuming within planetary limits.
Starting the journey
The first step is for retailers to use their existing infrastructure and data to better understand the impact of the products they are selling – they can’t influence consumers if they don’t understand this themselves. Without delving too far into the world of product footprint assessments or life cycle analysis, at a basic level, four activities are vital for a retailer to improve transparency of the impacts of the products on its shelves. In true millennial style, let’s take an avocado as an example:
- Monitor: The proliferation of connected devices in today’s economy greatly facilitates the monitoring of environmental impacts at each stage of production. For example, digital agriculture advances help us to understand the average water consumption of my avocado or connected logistics platforms can collect the fuel consumption and emission data from shipping my fruit to Britain from South America.
- Collaborate: Farmers, processors and retailers must work together to share information on the water and fertiliser consumption, carbon emissions from transportation, materials used in packaging and average spoilage rates of my avocado to understand its total footprint. Whether this is by implementing and enforcing industry-wide minimum standards or sharing data on a platform open to all partners, technology plays a key role.
- Trace: Understanding the impacts of separate stages of the value chain is not enough and is less useful for trying to impact consumers’ decisions; the impacts described above must be traced throughout my avocado’s lifecycle. Product information management systems could be used to gather and store impact data as it goes through the value chain so the end to end view can be provided to the consumer. Various companies are starting to develop blockchain solutions to ensure transparency and trust in this tracing process, for example, orange juice producer Refresco and Dutch retailer Albert Heijn now enable consumers to track the progeny of every bottle.
- Track: The impact of a product does not end when it leaves the store; consumption has greater impacts than the actual production of many products; Unilever estimate that 63% of the impact of their products occurs during consumption, for example, from heating water for showers or laundry. Ideally, returns and disposal should also be considered, or, for perishables like my avocado, wastage rates. Connected products can feed back more data to manufacturers on how, when and where they are being used, adding to this footprint understanding.
All the above processes and technologies are widespread; retailers track products from source to shelf and leverage connected devices and digital technology to optimise their operations. However, they are rarely integrated and leveraged for the purposes of sustainability, missing an opportunity to influence consumers and reduce the largest environmental impacts of their business, as well as demonstrate real leadership in innovation and sustainable thinking. The next step is for retailers to disseminate this information in clear, accessible ways, and be more proactive in influencing their consumers. Perhaps one day my local supermarket will inform me that the most environmentally friendly decision I could make when shopping for my next avocado would be to choose a locally sourced apple instead…or it might not even stock avocados at all.