Guest Column | August 26, 2022

4 Ways Retailers Can Use Digital Tech To Deliver Sustainability Gains

By Jason Luther, RetailNext

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Consumer priorities are changing — and nowhere is that more visible than in shoppers’ increased attention to the social and environmental impact of their purchases. Today, nearly half of consumers say they’ve changed their purchase behaviors in a bid to address climate change, and 4 in 10 people now choose sustainable products as often as they can. 

Unsurprisingly, the shift in consumer behavior is reflected in the way that retail brands and merchants operate. More than seven out of 10 retail leaders now prioritize sustainability, more than in any other industry, and industry execs say they now consider optimizing for sustainability to be more important than driving revenue or attracting talent.

Finding a path forward to sustainable retail isn’t easy, though — so increasingly retailers are turning to new technologies to give them an edge. By using cutting-edge digital tools, retailers can reduce shrinkage and waste, improve customer service, ensure compliance with sustainable practices, and maximize efficiency across the value chain — and in the long run, which will help keep environmentally conscious consumers coming back for more.

Here are four ways that today’s retailers are harnessing new technologies to capture sustainability benefits:

  1. Reduce Shrinkage

For any retail business, shrinkage means waste — and in recent years, retailers have seen pandemic-related disruption upend their risk environment and leave them facing additional issues with shrinkage. 

Many retailers are now using new technologies to tackle shrinkage, with 53% of retailers now investing in technology designed to reduce security threats and prevent fraud and shoplifting. Increasingly, though, we’re also seeing merchants seek to join the dots between security and anti-fraud investments, and broader efforts to create smarter and more connected retail environments.

Investing in integrated in-store technology — such as POS, inventory management software, and security cameras — doesn’t just help to clamp down on criminal activity. It also creates data that can be used to eliminate guesswork when it comes to placing orders, helping to prevent overproduction and to unlock other ways to operate more efficiently and reduce waste.

  1. Streamline Customer Service

Poor customer service almost always takes an environmental toll: if customers get poor service and then return products that can’t be resold, for instance, those products often simply go to waste. Repeated customer visits to stores — to exchange products — also mean more transport emissions. 

Omnichannel and digitally connected approaches with BOPIS options can reduce the need for costly and carbon-intensive shipping, keeping customers happy while also burnishing your brand’s eco-cred. Even labor scheduling tools can make a big difference: if your store is properly staffed, customers will face shorter lines and be able to complete their shopping in fewer trips, driving efficiency and reducing impact across the entire retail chain.

Many employee enablement tools also help with sustainability efforts. Workforce management, collaboration, and knowledge-sharing solutions all augment employees’ ability to serve customers better and help them to communicate the environmental benefits of your products. 

  1. Ensure ESG Compliance

For retailers, effective ESG execution depends on ensuring compliance with sustainability policies and best practices both in store and across the supply chain. That requires real-time access to detailed information about every aspect of the retail value chain, from materials and manufacturing processes to energy usage across business operations, to shipping and fulfillment processes. 

The best sustainability leaders use intelligent operational data management to coordinate data sources and ensure visibility and accountability at every step, from supplier to shop floor. For example, in-store compliance tools already use digital imaging to ensure compliance with policies relating to promotions and displays. 

The same tools also can be used to manage sustainability compliance, ensuring that frontline teams execute required tasks efficiently. Are crates being recycled effectively, or simply tossed away? Are returned products being handled correctly to minimize waste? Retailers need to know the answers to such questions in real time to optimize their sustainability efforts.

  1. Make The Most Of Existing IT

While new digital technologies have the potential to support significant improvements in retail sustainability, it’s important to recognize that implementing new hardware is almost always going to have an environmental impact. Removing existing computer systems necessarily creates waste, and adding new infrastructure requires significant materials and energy use across the entire manufacturing, shipping, and installation pipeline.

That’s why it’s so important to seek out IT solutions that require minimal disruption to or replacement of existing hardware. The best sustainable IT solutions are typically software-focused, using algorithms that can be implemented across legacy IT infrastructure at the touch of a button. After all, given a choice between maintaining an existing system and building out entirely new infrastructure, keeping legacy tools in action will usually be the greener choice.

Exceed Expectations  

In the post-pandemic world, consumers are more than ever looking to buy from companies that align with their values and that make them feel good about their purchases. After long months of shopping from home, consumers are also more focused on the experiential aspects of shopping — and that means they’re seeking retailers that embed sustainability into their products, but also into the retail environment itself.

Today’s shoppers are looking to buy from merchants that make top-to-bottom sustainability commitments — and that use every tool at their disposal to deliver meaningful results. With the challenges now facing the retail sector, from labor shortages to supply chain hiccups, there's a growing need for technologies that can streamline operations and emphasize sustainability at every step of the customer journey. 

Driving sustainability in the retail space will still take real leadership and strategic focus. But with the new technologies now at their disposal, retailers can work more effectively to execute that leadership by reducing waste, optimizing customer service, and maintaining accountability across their operations. Customers are demanding more — and with new digital tools, retailers are better placed than ever to rise to those demands and meet their customers' expectations around sustainability and social responsibility. 

About The Author

Jason Luther is the Chief Technology Officer with RetailNext, the leading analytics solution for brick-and-mortar retailers. For more than a decade, 400+ brands across more than 90 countries have deployed RetailNext to boost operational efficiency and further their brand story.