How Retail can help to mitigate Environmental drift

 

Climate change is under everyone's eyes and the scientific community confirms that it is a global drift very close to the point of no return.

The main responsibilities of these changes belong to the ruling class that has ignored repeated signs that the current economic system is no longer sustainable, being based on energy from non-renewable/polluting resources plus raw materials extracted, processed and then quickly sent to landfill.

In general, politicians think more to the next election than to future generations and are satisfied to be informed (or worse) by lobbyists of incumbent companies, giving up analysing and weighing neutral sources. Furthermore, most managers focus on safeguarding their privileges by making conformist choices, rather than striving to understand the changes and work towards a medium and long-term future, possibly at the expense of some immediate results.

In this context, Retailers cannot only influence their own category and political representatives, but can move from words to facts.

Efficiency improvements

The first aspect to focus on is energy saving in Stores.

The transition to LED lighting, in addition to few years payback and then producing advantages for a much longer period, can be the opportunity to consider lighting as a means to enhance the goods with scenography techniques.

The transition to high efficiency heating/cooling systems can complement ancient and forgotten techniques, such as strategically positioned vents to create natural airflows. A modern review of these techniques can use sensors and actuators controlled by an intelligent algorithm for opening, closing and possibly activation of electric fans, depending on the internal/external temperatures, the season, the day of the week, the time and maybe weather forecasts, leveraging the buildings thermal inertia. Finally, the installation where possible of photovoltaic panels is an increasingly profitable investment, with the additional advantage that greater energy production hours match Store opening.

The search for organizational methods and technologies to produce goods/services with less waste of energy, work and raw materials have always been the basis of every economic activity, Retail included, but often adopted strategies was developed in a world that is disappearing.

We already entered the Fourth Industrial Revolution characterized by intelligent systems able to see, hear, understand, act and learn, which are leading manufacturing and services industries (including Retail) to implement strategies and business models until recently unthinkable.

We are moving from the automatic and rigid systems of the Third Industrial Revolution to the autonomous and adaptive systems based on Artificial Intelligence (AI) of the Fourth. In the manufacturing industry, investments for the purchase of robots may be relevant, but Retail can often just adopt new Cloud-native Software as a Service (SaaS), immediately accessible without initial investments. The problem is more an open mind and the will to understand, than the capital availability.

Timeless problems for Retail as the optimal management of assortments, prices, promotions and stock can have advanced and automatic solutions, not limited to few best-sellers but to all the products in stock through “AI infused” management software. The fast and low cost predictions can be extended to the long queue (the usually big number of slow moving items) giving an additional economic advantage.

To maximize advantages, the software tools must be integrated, configured and manually controlled only for a period. People should be devoted to sectors where they express their best, such as empathy towards customers, the solution of their problems or the identification of new and unexpressed needs. The store associate shift towards activities that they do best, leaving repetitive ones to machines, will also help the transition to an increasingly automated society without excessive job destruction.

Intelligent Retail (or Intelli-tail as we say for aKite) allows optimal stock level while reducing any capital waste and reallocate it in sectors that improve the customer experience. Avoiding up front to order and transport products that in one way or another will be sold off or even destroyed, reduce direct costs and also pollution of the supply chain still based on internal combustion trucks. For chains that directly manage the supply to their stores, the savings are even more direct.

 

Circular Economy

As already mentioned, a growing part of consumers and producers is becoming sensitive to the Circular Economy principles aimed at reducing the waste of raw materials and energy needed to produce goods and services. See also http://akite.net/en/news/circular-economy-retail

In addition to contributing to store and supply chain efficiency, the area where Retail can have an even more profound effect is the increase of products useful life, through repair and resale as used, perhaps after a refurbishment in the shop or factory. The prejudice that, especially in clothing, second-hand products recall poverty, must be fought. It is a trend starting from young people and cultural elites and about to spread into wider layers. At the very end, stores can become collection centres for materials to be selected and sent to recycling, rather than to the landfill.

Another trend that Retailers should take is towards high quality products, better suited to sustaining a more intense and extended use. How many drills and little or not used clothes, just to give some examples, are present in our homes!

Selling higher price products is certainly more difficult, but it is the segment in which the experiential factor (staff empathy and competence) is more important and where physical stores can exceed eCommerce. Some Retailers could become experience sellers only and physical products sent from the factory directly to customers' homes without passing through the store.

In the catering field, being promoters of the advantages of balancing less meat consumption with more vegetables could reduce ingredients cost and doing well for the customers and the planet health. The strong impact of the livestock industry on the greenhouse emissions and the use of land and water to produce livestock feed is generally underestimated.

Finally, a careful selection of the “greener” suppliers is a valuable service to customers and an invitation to the latecomers to change, before being cancelled by the laws of the new emerging market.

 

Conclusion

Regardless of political orientation, it is a question of choosing whether to be an active part of a new social responsibility or whether to remain entangled in a dying system. Choosing to leave the comfort zone you will immediately intercept the sympathy of consumers more sensitive to the new movement.