Angshuman Paul discovers that the green mania has gripped global retailers like never before. Reducing wastage is after all the core tenet of good management. Ask Lee Scott!
It’s that time of the year again when reindeers,
stockings, mistletoes (uh... for the romantically inclined!) and gifts are in vogue. Same time last year, a survey carried out in the US confirmed two things. One, that if they had a choice, more than two-thirds of consumers would gift ‘green’ during Christmas season and two, 68% believed that environmentally friendly gifts cost more. Reacting to this, the world’s largest retailer Wal-Mart zeroed in on an ingenious way to entice consumers: It launched affordable and eco-friendly stocking stuffers, which flew off the shelves much faster than anticipated. The gifts, among others, included, a double-disc set of Eagles’ Long Road Out of Eden packaged in sustainable paper; Bamboo socks (which naturally fight odor), organic coffee, fruit, natural cosmetics, eco-friendly toothbrushes, et al. Vying for attention were also organic cotton pajamas!!!
As December approaches again, it logically follows, that cash-strapped consumers should steel themselves against more such green goodies that global retailers will push their way. Echoes, Mario Pilozzi, CEO of Wal-Mart Canada, “We have found that there is a great marriage between environmental sustainability and business sustainability.” The season is, after all, every retailer’s last hope for brightening up their sales figures, ahead of the year closing in a credit squeezed global economy. Retailers cashing in on the ‘green’ bug is nothing new. Sector analyst confirms that over the past decade, every global retailer – from Lee Scott’s Wal-Mart to Gregg Steinhafel’s Tesco – has developed a hitherto hidden penchant for ‘green.’ The reason lies in the ability of green to attract green. Yes! Resorting to environmental initiatives, apart from attracting media attention and keeping away regulatory pressure, is helping retailers mint big money. “Environmental sustainability and business sustainability often go hand in hand,” points out Natalie Berg, Grocery Research Manager, Planet Retail. His reasoning does not only encompass the consumer’s increasing awareness and demand for green products in supermarkets, but also takes into account the fact that going green also helps reduce overall operating expenses for retailers, since energy (electricity) tends to be the biggest operating expense incurred by supermarkets. “Grocers are embracing a variety of eco-friendly attributes in store – ranging from LED lighting to rainwater harvesting – which are not only good for the environment but also help reduce their energy costs,” he avers.
Another way in which retailer’s are getting returns from their ‘green’ investments is the last 5 seconds of any marketing programme - We refer to the fourth P viz. Packaging. For instance, bags used by green retailers are reusable and recyclable and employees are trained to add more items per bag, reducing overall packaging cost. Mark & Spencer, made a bold move earlier this year by becoming the first major retailer to launch a nationwide carrier bag charging programme. To their dismay, however, there was a huge protest from consumers across UK . But, though there may have been some teething problems around customer inconvenience, “carrier bag usage is down by 80%,” explains Berg. Moreover, retail specialists claims that in regions like Europe where private labels command an equal if not bigger market share than big brands, most in-store labels are promoted as eco-friendly brands and the unique positioning helps retailers steal the show from big brands. No wonder Carrefour Eco Planète (a ‘natural’ tagged private label from Carrefour) is one of the most popular brand’s in its category and Carrefour holds the distinction of being France’s largest organic products retailer. Carrefour also is a propounder of recyclable bags. Even German super value store Aldi promotes its store brands with eco-friendly paper bags.
In tune, the global organic and eco-friendly market is growing by 39%, a mouth-watering delight for retailers in UK and USA. “In concentrated markets like Switzerland, USA and UK, supermarkets play a much greater role in community and that’s why these players are successful is promoting organic food,” explains Jonathan Banks, Business Insight Director, The Nielsen Company, UK.
About a year ago, when Lee Scott unveiled Sustainability 360 for engaging Wal-Mart’s associates, suppliers and customers in his ‘green’ campaign, altruism was far from his mind. He was indeed thinking about the great business sense it makes to reduce waste (of energy and packaging) on the one hand, and make money by selling environmentally friendly products, on the other. Sustainablity is vital for profitability, at least for retailers, it seems. Long Road Out of Eden gift-wrapped in sustainable paper, anyone?
It’s that time of the year again when reindeers,
stockings, mistletoes (uh... for the romantically inclined!) and gifts are in vogue. Same time last year, a survey carried out in the US confirmed two things. One, that if they had a choice, more than two-thirds of consumers would gift ‘green’ during Christmas season and two, 68% believed that environmentally friendly gifts cost more. Reacting to this, the world’s largest retailer Wal-Mart zeroed in on an ingenious way to entice consumers: It launched affordable and eco-friendly stocking stuffers, which flew off the shelves much faster than anticipated. The gifts, among others, included, a double-disc set of Eagles’ Long Road Out of Eden packaged in sustainable paper; Bamboo socks (which naturally fight odor), organic coffee, fruit, natural cosmetics, eco-friendly toothbrushes, et al. Vying for attention were also organic cotton pajamas!!!As December approaches again, it logically follows, that cash-strapped consumers should steel themselves against more such green goodies that global retailers will push their way. Echoes, Mario Pilozzi, CEO of Wal-Mart Canada, “We have found that there is a great marriage between environmental sustainability and business sustainability.” The season is, after all, every retailer’s last hope for brightening up their sales figures, ahead of the year closing in a credit squeezed global economy. Retailers cashing in on the ‘green’ bug is nothing new. Sector analyst confirms that over the past decade, every global retailer – from Lee Scott’s Wal-Mart to Gregg Steinhafel’s Tesco – has developed a hitherto hidden penchant for ‘green.’ The reason lies in the ability of green to attract green. Yes! Resorting to environmental initiatives, apart from attracting media attention and keeping away regulatory pressure, is helping retailers mint big money. “Environmental sustainability and business sustainability often go hand in hand,” points out Natalie Berg, Grocery Research Manager, Planet Retail. His reasoning does not only encompass the consumer’s increasing awareness and demand for green products in supermarkets, but also takes into account the fact that going green also helps reduce overall operating expenses for retailers, since energy (electricity) tends to be the biggest operating expense incurred by supermarkets. “Grocers are embracing a variety of eco-friendly attributes in store – ranging from LED lighting to rainwater harvesting – which are not only good for the environment but also help reduce their energy costs,” he avers.
Another way in which retailer’s are getting returns from their ‘green’ investments is the last 5 seconds of any marketing programme - We refer to the fourth P viz. Packaging. For instance, bags used by green retailers are reusable and recyclable and employees are trained to add more items per bag, reducing overall packaging cost. Mark & Spencer, made a bold move earlier this year by becoming the first major retailer to launch a nationwide carrier bag charging programme. To their dismay, however, there was a huge protest from consumers across UK . But, though there may have been some teething problems around customer inconvenience, “carrier bag usage is down by 80%,” explains Berg. Moreover, retail specialists claims that in regions like Europe where private labels command an equal if not bigger market share than big brands, most in-store labels are promoted as eco-friendly brands and the unique positioning helps retailers steal the show from big brands. No wonder Carrefour Eco Planète (a ‘natural’ tagged private label from Carrefour) is one of the most popular brand’s in its category and Carrefour holds the distinction of being France’s largest organic products retailer. Carrefour also is a propounder of recyclable bags. Even German super value store Aldi promotes its store brands with eco-friendly paper bags.
In tune, the global organic and eco-friendly market is growing by 39%, a mouth-watering delight for retailers in UK and USA. “In concentrated markets like Switzerland, USA and UK, supermarkets play a much greater role in community and that’s why these players are successful is promoting organic food,” explains Jonathan Banks, Business Insight Director, The Nielsen Company, UK.
About a year ago, when Lee Scott unveiled Sustainability 360 for engaging Wal-Mart’s associates, suppliers and customers in his ‘green’ campaign, altruism was far from his mind. He was indeed thinking about the great business sense it makes to reduce waste (of energy and packaging) on the one hand, and make money by selling environmentally friendly products, on the other. Sustainablity is vital for profitability, at least for retailers, it seems. Long Road Out of Eden gift-wrapped in sustainable paper, anyone?
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