We hear a lot about brands investing in multi-channel retail to meet their customers where they want to shop — and it’s true that having an ecommerce option is critical in the post-COVID-19 world.
However, retailers would be remiss to not also consider consumer preferences for how products are sourced and delivered. Consumers increasingly want to purchase from sustainable brands, with a recent IBM/NRF study finding that 62% of consumers are willing to change their purchasing habits to reduce environmental impact, up from 57% before the pandemic. It’s the rise of the eco-conscious consumer.
The challenge for retailers is that they are “leading the sustainability charge,” but they must rely on the B2B companies they work with to help them achieve their goals. Of course, retailers can take steps such as installing energy-efficient lighting, but they don’t always have control over how sustainable the products they sell really are.
Data and digital enablement are making it easier for suppliers to implement more environmentally friendly practices, and ultimately help retailers share with consumers how the supply chain is working together to meet their sustainability goals. Let’s look at a few ways advancements in technology, particularly analytics, is having an impact on supply chain sustainability.
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Reducing Product Waste
Product waste occurs throughout the supply chain, but grocery stores and supermarkets have a particularly stunning waste challenge — Boston Consulting Group estimates food loss and waste will reach 2.1 billion tons by 2030, a total of $1.5 trillion in manufacturing losses.
Consumers might think of food spoilage in terms of what’s lost in store — produce that’s rotten on the shelf or items that are knocked off the shelf by an errant cart. But so much product is wasted before it even reaches the store, crushed on the truck or lost in the warehouse.
Retailers are combatting this transport waste using technology such as IoT sensors and RFID tags to provide data throughout the journey, and analytics to alert the risk of food melting or spoiling. With the ability to keep track of items from the moment they enter the warehouse to the moment they leave, warehouses, distributors and retailers can have the data they need at their fingertips to ensure food isn’t lost or left to spoil.
Even reducing the loss of basic shipping tools such as pallets can have a big impact on sustainability. At CHEP, we help our customers leverage analytics and historical data for better demand planning. Analytics help us understand approximately how many pallets our customers will need, and when the customer is typically done using those pallets, to ensure our shared and reused pallets are collected on time and can then be reused by other customers. Every shared pallet returned and reused is another step toward a more sustainable supply chain.
Reducing Emissions
Much of the discussion around “going green” has been focused on reducing empty miles driven by vehicles and the pollution created by semi-trucks on the road. Through freight collaboration and orchestration, CHEP and our manufacturer and retail partners were able to eliminate more than 2 million empty miles in 2021, keeping 7 million pounds of CO2 out of the atmosphere.
However, this is only one solution being explored in the logistics space. A recent survey from Ceres found members of their Corporate Electric Vehicles Alliance plan to purchase 330,000 electric vehicles over the next five model years — providing another opportunity for retailers to navigate alongside their suppliers to reduce carbon emissions.
One of the most important emissions-related shifts is how supply chains approach single-use packaging materials. A recent study published in Reuters found plastics production releases at least 232 million tons of greenhouse gases each year, a number that will outpace coal production emissions by the end of the decade. Analytics are helping retailers understand how they can reduce their dependence on plastic at critical points in the supply chain and even eliminate it entirely.
For example, manufacturers and distributors are testing out different configurations of loading goods onto trucks that would allow them to maximize the space on each vehicle — and the analytics gathered from these tests can also show them how less wrap is needed to protect items on their journey, ultimately reducing waste.
Alternate packaging methods can also help retailers reduce emissions. When using more durable and reusable shipping platforms, manufacturers that once wrapped goods that had to be re-wrapped at the distribution point can now eliminate plastic waste by transporting their goods with containers. Much like the tags used in warehouses, suppliers can also track containers using RFID technology and make sure each container gets back to their facility — cutting out unnecessary single-use plastic waste.
Sustainability Starts Outside the Store
It’s not only the actions a retailer takes within its store that can have a big impact on sustainability — it’s also the choices that retailers make about what suppliers it partners with and the tools that supplier uses to make their combined operations more sustainable. Technology is making choices simpler and tools easier to access. When retailers understand how their suppliers are working to become sustainable by providing data transparency to improve their combined impact, they can together build better relationships with eco-conscious consumers.
If you’re a retailer looking to improve your sustainability efforts, make sure you’re asking the right questions of your suppliers: What are they doing to reduce waste, both in their products and packaging? What steps are they taking to make their own businesses more sustainable? What are their future sustainability goals — not just what’s being done now or in the immediate future?
By partnering with the right team and using data and digital solutions to better understand your supply chain operations, you can go green throughout your supply chain — and give your consumers the sustainable products they want.
Brian Tupper is the Director of Retail Development at CHEP. He has been with CHEP for nine years, and in his current role he leads CHEP’s efforts to partner with retailers to find new solutions to control and return CHEP’s pooled assets. CHEP helps move more goods to more people, in more places, than any other organization on earth. Its pallets, crates and containers form the invisible backbone of the global supply chain, and the world’s biggest brands trust CHEP to help them transport their goods more efficiently, sustainably and safely.
