5 key elements to developing a successful sustainability initiative
Experts predict the sustainability market will be worth up to $150 billion by end of 2021. That’s a ton of growth, and a huge opportunity for retailers. But when it comes to grocery sustainability practices, there is a lot of work to do.
10 years ago you could just push out some marketing on Earth Day and that was that. Now, sustainability needs to be a fundamental part of your business model. Consumers have made it very clear – they want more environmental and social responsibility from the brands they do business with.
Revionics and Aptos recently teamed up for a webinar hosted by Progressive Grocer on two innovative approaches to strengthening corporate sustainability efforts – pricing and loyalty rewards (Watch the full webinar on demand here). But before you start implementing any new practices, it’s important to establish a baseline for how to do grocery sustainability the right way.
What counts as “sustainability”?
First, you have to define sustainability. The number of ways to approach eco-friendly practices in grocery can seem overwhelming. You have the food products themselves, whether they are sustainably sourced and fair trade. Then you have your brand and how you position your brand around sustainability, including employment practices and jobs centered around promoting sustainability.
There’s also the stores and the things in your stores that use energy, as well as environmental impacts along the supply chain. Of course, packaging and shipping too. And don’t forget, the education and services you offer consumers around nutrition and sustainability. Environmental responsibility is a multi-faceted beast, and consumers expect retailers to at least acknowledge all of it in some way or other.
However, there are certainly mistakes that can be made in improving your sustainability efforts. And in today’s society, it’s not always the thought that counts. So to avoid any mishaps or misguided best intentions, make sure your sustainability practices are centered on these five foundational elements.
Building successful grocery sustainability practices
Data-driven decision making
When it comes to offering more environmentally conscious products in your store, advanced analytics is key to success. You need data analytics to understand what your customers want, have good forecasting, establish the best pricing approach and optimize your shelf space.
Different consumers will be at different stages on their personal sustainability journey. Without good data modeling you are stuck guessing which eco-friendly products fit your customers’ needs.
“You have to know where your specific customers are, and not throw too much at them too fast,” said Revionics Managing Director of Global Strategic Consulting, Matt Pavich. “You can’t get my dad to go vegan tomorrow. But you can have the right products and prices to guide customers on the journey, if you know where they are now and what they are willing to pay.”
Plus, having the right data paired with an intelligent pricing solution enables you to effectively shift demand from less sustainable products to more sustainable ones. And it can help you optimize pricing at every stage of the product lifecycle, effectively reducing waste and improving sales units from start to finish.
The importance of impact
Whatever efforts you make around sustainability, there needs to be a tangible impact. Consumers want to see what steps you are taking, but more importantly, they want to know how those steps are helping the environment.
Think, for example, about the Australian wildfires at the beginning of 2020. People connected with the photos and stories of the koala bears being rescued. Saying “we’re donating money to save these koalas” makes a much larger impression on consumers than “we’re donating money to this or that organization.”
The worst thing you can do is not talk about your sustainability practices at all. While the importance of corporate responsibility goes far beyond recognition, you want to at least get some benefits. Don’t bury your sustainability efforts deep in your website, put them front and center of your marketing and messaging.
But on the flipside of this, you have to be genuine and authentic. Don’t talk the talk without walking the walk. Consumers are savvy, and retailers will face backlash for any perceived greenwashing.
REI is a great example of how to bring real transparency and accountability into your sustainability initiatives. REI publishes an annual impact report detailing their progress for each sustainability goal, including where they still have work to do.
“If you truly want to be a transparent, sustainable grocer, you have to make it a lifestyle,” said Matt. “You won’t go from 5% plastic-free today to 95% tomorrow. Any goal is a long-term investment. It’s about progress over perfection and taking those small steps.”
Reporting and education
Showing a genuine impact comes down to reporting and education. Without good metrics and measures in place, it’s impossible to speak to a tangible outcome.
What if you could turn to your consumers or shareholders and say, “This store diverted X tons of produce from going into landfills,” or “Our customers have saved over $$$ by buying Earth-friendly products”? Reporting enables you to confidently make these claims.
Accurate metrics also improve your ability to educate the consumer. Many consumers want to be more sustainable, but don’t know how, or want it to be more convenient. You can assist them on that journey by educating customers on which products are more sustainable and what kind of impact they can make by changing certain behaviors.
“Grocery retailers can be a trusted source of sustainability information for consumers,” said Aptos VP of Retail Innovation Nikki Baird. “It could be in-store demonstrations, carbon footprint labels on private label brands, sustainability ratings on products, to name a few. I think we’ll see more things like this in the future.”
Learn from Others
In the last several years, more grocers specifically positioned as sustainable retailers have started popping up. Thrive Market was created with the purpose of providing ethically-sourced grocery goods with carbon neutral practices. Similarly, Imperfect Foods started with a mission of reducing food waste. Grocers have much to benefit from learning from each other.
Sustainability lessons can be gained from other industries as well. Grocery probably isn’t the first industry you would think of for loyalty rewards, however, fashion and apparel have a long history of customer rewards programs. And many fashion brands are leveraging those programs to promote environmentally conscious practices.
Examples can be found in all different markets, like BestBuy letting customers trade in used electronics for a gift card, or a beer retailer giving beer tokens in exchange for returned kegs. For a grocery store this could look like providing customers an incentive to return reusable containers or use reusable shopping bags. Look to the innovators in every industry, not just grocery.
A solid start
Not every initiative will be a booming success from the start. But with these five foundational elements, you’ll be able to build a solid plan for reducing your environmental impact and reaching new sustainability goals.
For more information on practical grocery sustainability practices watch the full webinar, Greener Grocery: How to support sustainability with pricing and loyalty rewards on demand, or read How Retailers Can Use Data-Driven Pricing Strategies to Strengthen Sustainability.