Philippine Retailing Magazine Q4 2020 (Digital Edition Only) - Page 13

FEATURE

Responsible

Consumption and the Future of

Retail

By : Mun wei Chan , SustainableSG ( Singapore )
Photo from : www . medium . com
Retail has an extensive supply chain that encompasses extraction of resources , manufacturing , distribution and delivery , operations and waste disposal . These activities leave a sizeable environmental footprint . The fashion industry alone , a cornerstone of the retail ecosystem , was reported in Nature Research journal to produce 8-10 % of global CO2 emissions , i . e . 4-5 billion tonnes annually .
All the stuff that consumers buy will eventually be discarded . According to the World Bank ’ s What a Waste report in 2018 , the world is expected to generate 3.40 billion tonnes of waste annually by 2050 , a drastic increase from today ’ s 2.01 billion tonnes .
The retail business and its environmental impact will continue to expand because of population growth and rise of the middle class . For now , however , the sector has been disrupted by the pandemic .
In Singapore , other than supermarkets , pharmacies and shops selling essential items , the malls were closed during the COVID-19 lockdown from April to June 2020 . There was strong demand in consumer staples and a shift towards online shopping , something that was seen globally .
Since middle of June , the malls reopened and had been getting crowded again . Most people were working from home and needed to get out of the house for some respite . Furthermore , restrictions on international travel meant that the malls had become “ domestic getaways ”.
As I wrote in my previous article “ The New and Better Normal ”, I am optimistic about the future . More consumers are health-conscious and pay closer attention to the materials and ingredients in what they buy . We will see a growing segment that wants to be more prudent in their purchases , make informed buying decisions , use what they bought for a
11 longer period , and have greater visibility of what happens to post-use stuff .
Before COVID-19 , green consumerism has been on the rise . In a 2018 study by market research company , GlobalWebIndex , 61 % of millennials aged 22 to 35 agree that they would pay more for eco-friendly products . The pandemic and the recovery to follow will accelerate this trend .
Retailers must respond to this green wave . Increasingly , we see brands for which sustainability is core to their DNA , such as Patagonia ( it donates 1 % of sales to support environmental organizations ), Beyond Meat ( it creates plant-based “ meat ” products with a lower carbon footprint ) and IKEA ( it is working towards 100 % renewable energy ). Even multi-brand retailers are flaunting their green muscles – Amazon has announced its goal of net zero carbon emissions by 2040 and will invest US $ 2B to support carbon reduction technologies and services .
But there is an inherent tension . If consumers wish to reduce their environmental impact , they must consume responsibly . This entails adopting the zero-waste hierarchy , which include refusing , reducing and reusing . How does this square off with retailers ’ aspirations to sell more for business survival , sustainability and growth ? Can retailers go green in a meaningful way and not hurt their business ?
I certainly think there is middle ground between responsible consumption and the sustainable future of retail . Here are some ideas for the industry to consider :
Provide consumers with sustainable options and help them to make informed choices . Fairprice , Singapore ’ s homegrown supermarket chain , sells paper products that are certified by the Forest Stewardship Council ( FSC ). Having greener products on the shelves can be supplemented by ongoing communications to encourage consumers to support such products .
Offer in-house repair services for the goods that you sell . This is to address a common pain point whereby it is easy to buy say electronic gadgets but less convenient to find a repair centre . Repair services can encourage repeat footfall and create job opportunities for the local community . It is always greener to repair than to replace a product . On a related note , extended producer responsibility ( EPR ), whereby brands and product manufacturers have to be responsible for end-of-life disposal , is gathering momentum . This is an opportunity for online and physical retailers to be EPR aggregators , which can be a new revenue stream .
Reduce wastage across your supply chain . This is not only good for business in trimming costs , it is also environmentally friendly , particularly for perishable goods . In Singapore , the supermarkets sell fruits , meats and dairy products that are near expiry dates at lower prices . This is a win-win for the business in generating revenue from goods that otherwise would be disposed AND for customers as we can save some money and not see things go to waste .
Responsible consumption can be more of an opportunity than a threat for retailers . It is timely for the industry to take stock of business practices , innovate ways to reduce waste and environmental impact , and celebrate your achievements and stories with stakeholders in an open and transparent manner . Start now , do it well and it will sustain you for the long haul .
Mun wei Chan works with companies to implement effective and sustainable corporate strategies . He welcomes feedback and enquiries at : munwei . chan @ alumni . stanford . edu .