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Why Sustainability in Operations is a ‘Must-Have’ for Competitive Retail

Sustainability is a defining trend in the 21st century. Due to their deep relationships with global supply chains as well as the public visibility inherent to the industry, retailers have a large role to play; notes one recent report by the NRF, about 95% of retailers’ carbon footprint is deep within their supply networks.

While this implies challenges, it also presents a tremendous opportunity for brand transformation, renewed and meaningful relationships with customers, and a revision of retailers’ community roles.

Retailers must understand the growing role sustainability has in the hearts and minds of consumers; these attitudes are homogenizing globally with over two-thirds of Americans agreeing that sustainability is a priority, with implications for how important ’upcycling,’ repair, and reuse is becoming in the consumer context.

Furthermore, a recent Kantar report found that 63% of consumers believe in retailers’ responsibility to act. The implications of this growing shift are myriad both for how brands operate and continue to form their public identity. 

When 80% of consumers want to purchase from brands personalized to them, the next generation of shoppers agree in a large majority that they want brands to be more sustainable, and 82% of shoppers want brand alignment with their own values, sustainability is a critical task for competitive retail going forward. Putting it another way, ‘purpose-driven consumption’ is a rising trend.

Speaking of changes, Jeffrey Reinmann, Global Environmental & Sustainability Manager at Diebold Nixdorf, sat down with RETHINK Retail to discuss sustainability in the industry today:

“I think of sustainability as those individual actions allowing those significant activities to be completed from a sustainability perspective. You cannot have sustainability in an organization if your employees are not thinking about sustainability,” reflects Reinmann, arguing for a more holistic view of sustainability, encompassing company culture in addition to day-to-day resource management, vital following the rise of WFH arrangements

Yet, it is because truly sustainable retail involves nearly every aspect of operations as well as those deep supply chain relationships that navigating the landscape is daunting for retail managers who already have a lot on their shoulders. 

That’s why finding the right partner is so critical, especially given the increasing need to ensure sustainability efforts are sincere and sufficient in light of growing public concerns around greenwashing (with increasing risks to brand perception). Partners like Diebold Nixdorf help retailers by focusing on, measuring, and managing relevant sustainability KPIs through all chains and channels.

Notes Reinmann on Nixdorf’s solutions, one of their major focuses is engaging consumer habits: “Not only do our retail customers care about the energy efficiency of machines, their functionality, and the way consumers can interact with those systems in a very seamless way…but our software portfolio as well,” further noting that benefits include a range of customer engagement opportunities to help them think about sustainable purchasing such as digital leaflets (which provide the added bonus of saving on materials, increasing the perception of authenticity). 

For example, during self-checkout (one of Diebold Nixdorf’s tech solutions), this can look like fresh produce recognition, making the self-checkout process that much more seamless. It’s because consumers have shown that they are increasingly willing to pay for sustainable products that this carries major implications for sales, supply chains, and overall carbon footprint.

Indeed, while so much of today’s retail growth today is centered on wise tech investments, ensuring those digital transformations are part of a unified project for broader sustainability is critical.

Recognizing the importance of the issue to consumers as well as long-term business viability, some of the industry’s largest retailers are making significant commitments. 

In a recent statement by IKEA, they announced their commitment to ‘carbon positive’ operations up and down their value chains by 2030, using language that demonstrates their understanding of the issues at play:

“The revised goals are aligned with the Paris Agreement and the Net-Zero Standard by Science Based Target initiative (SBTi).* In this way we contribute to limiting global warming to 1.5°C at the end of the century, while securing a just transition so that no one is left behind.”

Reinmann further notes that the tech Diebold Nixdorf sells—from the start through to end-of-life and disposal—is managed responsibly and recycled “to support our goal for environmental conservation…that includes reducing critical electronic waste that represents serious health and environmental impacts.”

In fact, it’s critical that your chosen sustainability partner has strong internal sustainability goals and practices, ensuring they know best how to advise pragmatically. Continues Reinmann, “We analyze our operational portfolio to better understand where we can be more efficient…saving to support our environmental and financial goals internally.”

Sustainability stands out from some other business trends in the sense that it isn’t a fad, not a passing interest, but an endearing global shift that recognizes the urgency of human impacts on the climate. It is a critical piece of the puzzle for how retail will look, feel, and operate moving forward throughout the century. While the road may seem winding, with the right partner, retailers can find their way to transformation.