Greentailing

Greentailing
Green flags of opportunity
March 01, 2009

Justin Doak

Let’s face it—retail has certainly been dabbling in green practices over the past couple of years, but the industry as a whole is experiencing a paradigm paralysis, despite the paradigm shift that has occurred in other market sectors. Current economic times undoubtedly slow development, but it shouldn’t halt the pace of innovation—in fact, it should escalate it.

Retail’s hesitancy to adopt comprehensive green practices is surprisingly peculiar, especially since retailers are keen to aligning with the likes of the consumer—a consumer who is changing. More than 80 percent of the U.S. adult population shows some type of green motivation, according to new research by the Natural Marketing Institute. For an industry whose success depends upon consumer demand, I raise the first green flag of opportunity for retailers looking to differentiate themselves and capture the attention of a strengthening consumer type.

Today, there is a flood of experts coming together to guide retailers through the economic downturn. They call for reductions in quality, product mix and payroll—but why not call for efficiency and resourcefulness in the way energy is used, products are transported and packaged, or materials are reused? Why do we not hear about comprehensive water-use reduction programs, the installation of T5 lighting or the use of on-site renewable energy to leverage the price associated with peak energy demand? Any of these strategies would save a national retailer millions of dollars and lessen the need to trim away the very core competencies and people that built the brand. This is the second green flag of opportunity I’ll raise for retailers planning a store for the future.

Perhaps the decision makers in the retail industry have fallen victim to the stigma that green is expensive. The truth, however, is that green is not expensive—change and development are. So the first obstacle we face is getting retail owners to understand how a sustainability program works within the traditional expectations of the retail business model. Just like the development of any prototype, the real investment is in the smart planning all of us green folks talk about. In times like these, people rarely deviate from the norm, but sometimes deviation is exactly what is needed. Now is a great time to explore options, such as lengthening the payback horizon associated with major equipment upgrades to better reflect hold-times. It is equally as smart to look for operational efficiencies and greening practices that can ramp up net operating income, while also delivering the green programs demanded by shareholders and key publics. This means it is time to get creative and coordinate existing resources and staff with leaders in the industry, and implement free and low-cost, quick-return measures. This is the third green flag.
The stores of the past could afford inefficiencies due to a lack of competition. The store of today has afforded inefficiencies due to a “buy now, pay later” culture and cheap resources. However, the store of the future won’t have such luxuries, and consequently, will require a comprehensive green program. The level of competition; skyrocketing price of energy, water and materials for construction, operations and production; escalating real estate; forthcoming government compliances; and changing cultural expectations will drive sustainability hard and quick into retail.

The store of the future is on the horizon. It will have a smaller real estate footprint; be cognizant of its waste; track its water and energy use; realize that access to public transport and established communities will secure stable sales; be an energy generator, rather than an energy consumer; communicate green practices and products to its customers; and participate in green programs in cooperation with its landlord. The store of the future will be resourceful (reusing whenever possible), will grow its regional product lines and will provide both customers and employees with a comfortable and healthy environment to work and shop. This is smart business; this is retail in the future. The irony is that once retailers realize the aggregate savings associated with portfolio-wide efforts like this, they’ll wonder what took them so long.

Over the next year, I will share exciting innovations and resources that are shaping the retailer of the future. The opportunities are endless, especially as you consider the unique systems retailers have developed to deliver their distinctive product lines. We’ll also explore methods for developing a green prototype, third-party certification opportunities and challenges, working with your suppliers, educating contractors, work force training, staff awareness and customer communication.

In the meantime, I ask one question: what green flag can you raise to help deliver the store of the future for your company?

Cheers,
Justin Doak
CEO, BlueBin Inc.
For green retail questions, contact justin@thebluebin.com.