Retailers need sustainable technology as much as they need great products

Retailers need sustainable technology as much as they need great products
February 27, 2024  |  BY

When it comes to gaining competitive advantage, retailers have never had a more difficult challenge. Loyalty is a thing of the past, as is automatic purchase based solely on brand reputation.

Consumers now study product comparisons, watch video reviews, and scroll Twitter feeds to spot both the good and the bad. They demand no-questions-asked returns and free shipping. The tiniest negative perception will induce a click to the competitor’s site.

And if that’s not enough of a hill to climb for retailers, sustainability must also be a central element of their business practices.

In the past this shift was strictly about meeting regulatory requirements or gaining positive PR. But today retailers must fundamentally transform the entire supply chain and product development process to one based on environmental priorities.

This is where technology plays a key role. Executed correctly, a company’s systems can reduce waste, improve efficiency, and ultimately create an eco-friendly supply chain – from logistics to sourcing to transportation.

But going green isn’t a matter of simple implementation of more environmentally sound solutions and practices. Retail technology leaders have to balance their sustainability goals with the need to manage costs. For example, while many want to reduce the production of single-use plastics, this change can increase costs and, in turn, drives customers to less expensive options.

Sustainability is a complex objective. Executives must assess every aspect of the supply chain, from raw material sourcing to production. The good news is that innovative technologies can help retailers not only track and measure progress, they can indeed improve environmental performance across the retail enterprise.

We are all working in new era of supply chain technology that has transformed how retailers view the product lifecycle. New software can provide visibility into every aspect of the supply chain, from procurement to product delivery, which allows managers to make more informed, pro-environmental decisions.

Even more, software for warehouse management optimizes inventory levels, reduces excess stock, and reduces the negative environmental impact of warehousing. And by integrating these software solutions with AI, IoT, and blockchain technology, companies have the right tools for cutting carbon emissions and lowering their environmental footprint.

Technology can also make a huge impact on a retailer’s transportation system, as the running of networks is one of an enterprise’s biggest contributors to carbon emissions. As companies explore innovative ways to reduce their logistics-related environmental damage, more are turning to electric vehicles (EVs) as part of their delivery fleets.

Innovations like those provide a cleaner alternative to gasoline-powered vehicles. Retailers are also implementing route optimization software, which directs drivers to the most efficient delivery routes. This technology decreases fuel consumption and minimizes greenhouse gas emissions.

Environmentally friendly logistics also includes greener packaging that’s focused on recyclable and biodegradable materials, which shrinks the ecological footprint even more.

Retailers can gain more environmental credentials by leveraging the huge quantity of data they generate. Specifically, they can uncover insights that drive enhanced eco-friendly practices around inventory levels, operational efficiency and waste reduction.

And via the analysis of sales data, consumer opinions, and supply chain operations, retailers can pinpoint areas to further improve sustainability. Most importantly, data allows retailers to go away from feel-good slogans and, instead, gives them concrete evidence to the buying public that they are truly committed to environmental stewardship.

Sustainability, and the goal of creating a healthier planet, is now a priority for the majority of consumers. As the retail sector continues to evolve, the use of technology for green objectives is not so much about innovation for the sake of it – it’s essential for corporate survival.

We’re still in the initial phase of technology being a tool for sustainable business practices. Keep in mind that it’s technology itself that’s been responsible for much of the environmental peril we face. We’re now reversing course, using our systems to clean up the mess and prevent even more damage.

As such, retailers find themselves on an ongoing journey towards sustainability. Every new advancement will lead to more environmental gains. And the retailers that do it well will undoubtedly position themselves as champions of sustainability, leading to capturing bigger market share and brand loyalty. Indeed, to be an environmental steward will become synonymous with higher sales and profit margins.