Sustainability
What potential does this have to boost customer engagement and experience? It has the potential to drive transformational change in both shopping habits, and in Retailers ways of working. Some of the questions that should be asked and considered
are around how embedded sustainability is into standard ways of working, with some examples being: • Assortment: “How do you take into account sustainability when you choose your range?”
• Space: “Do you increase/decrease space depending on any sustainability metrics?”
• Merchandising/Display: “Do you put the most sustainable SKUs in the best locations?”
• Price: “Do you adjust your pricing to incentivise shoppers to buy more sustainable SKUs?”
• Promos: “Do you over/under promote more/less sustainable SKUs?”
• Personalisation: “Do you target shoppers to make sustainable purchases?”
• Finance: “Do you understand the impact sustainability has on overall cost to serve?”
• Loyalty: “How do I understand Customer Lifetime Value in relation to sustainability?”
• Online: “What part does sustainability play when it comes to substitutions?”
• Loyalty schemes need to increase consideration towards the sustainability element, such as allocating bonus points for sustainable choices, and perhaps even giving each customer a monthly personalised report in terms of how they’ve improved their purchasing habits. Stores should also be stepping up here, with closer connections to local community initiatives, such as local vegetable growers and local recycling schemes.
How does sustainability improve supply chain operations? By adding a sustainability related dimension in your supply chain measurement, such as CO2 emissions, you can measure this alongside your existing multi-faceted considerations such as ability to serve, costs, agility and resilience. In this way, the supply chain can be tuned at a granular level to maximise sustainability, while maintaining the other dimensions at an acceptable level. For the majority of supply chains,
improving sustainability will coincide with reducing costs through reductions in the use of plastics, or by reducing wastage from goods being damaged in warehouses. Tough trickier to balance other aspects such as when goods need to be moved quickly, including perishables, you can still work on ways to implement this aspect through using more carbon efficient transportation. A second major consideration is
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design of the supply chain. You can try to reduce the carbon footprint by reducing transportation distance, and sourcing more locally to the end customers. However, you still have to consider if those local sources were as sustainable as the longer distance ones, and balance appropriately. Application of analytics allows us to model the various iterations to identify a design that best meets our specific supply chain need. Additionally, we can apply traceability through the supply chain to
deliver the assurance that the products our customers are buying are indeed from sustainable sources. We could also think about logistics route optimisation from a
sustainability perspective rather than from ‘on-time’ and ‘cost’ – are there route structures that reduce the overall number of miles, or routes where emissions are lower due to vehicle speeds, different types of vehicles etc? Retailers and CPGs have a very broad reach from deep within
supply chains as far back as food growers, to the individual customers that will buy their products, plus all of the goods movements in between (“from farm to fork”). Tis provides a high number of opportunities to improve sustainability in many dimensions, but also requires managing complexity to ensure the actions taken do truly result in improvements, and not inadvertently just shuffle the deckchairs.
Can you explain more about how data can be used to measure a company’s overall sustainability status in their working business practice and how improvements can be made to boost sustainability measures? Yes! As mentioned above, data analytics is all about consistently measuring at a very granular level so that we can model the potential impacts of making changes, and then measuring accurately the outcomes post-delivery. It is critical to avoid ‘squeezing the balloon’, and with new requirements such as Scope 3 to track C02 footprints across the whole end-to-end value chain, consistent measurements are a vital component for making successful improvements. Robust, comprehensive data analytics programs that offer actionable insights will help lay the groundwork for long-term
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