Technology-centric Sustainability Transformations in Retail
4 ways to lower your carbon footprint in retail by leveraging technology.
For retailers, sustainability is now a board-level agenda.
Alongside the accelerated push towards technology adoption, retailers are also seeing growing concern for transparency and focus on environmental impact. Customers are at the forefront of this change as they are aligning their personal values with their shopping habits thereby making the retailers embrace social responsibility & sustainable operations. Retailers need to do this not only to improve their brand image & perception but to also ensure regulatory compliance.
However, with increased margin pressures ( more so than ever with unstable supply chains and a volatile economic environment), balancing the call for sustainability / lower carbon footprint along with increased spending on digital adoption, omnichannel operations, store modernisation etc is a huge challenge. Well, it doesn't need to be an either-or decision. There are ways that we can leverage technology to make a tangible impact by lowering our carbon footprint in retail.
Sustainability is a data challenge
Increasingly, we find that much of the discussion on this topic is still at a strategic level with a complex web of ESG metrics which frankly scare away even the most vocal supporters of change. It is no doubt a data challenge as data drives transparency which in turn drives accountability. This requires retailers & brands to take a step back and think of sustainability from a ‘digital’ as well as ‘operational’ perspective.
Implementing digital sustainability is all about reducing the impact of your IT operations and lowering your associated emissions. On the other hand, executing on operational sustainability is how you can use technology to build solutions which can then improve your operational efficiencies thereby reducing your carbon footprint. Let's simplify this complex topic a bit and look at ways retailers can use technology to drive a tangible impact in this area.
4 ways to technology-led sustainability transformation
Technology can be leveraged to build capabilities to sustainably and digitally transform your business. Here are 4 ways by which retailers can potentially lower their carbon footprint and contribute to a good cause.
Adopt & implement a greener technology infrastructure
The foundational step in this journey is to minimize the negative impact of your IT operations on the environment by adopting “Green IT”. But first, you need to know where the gaps are and then proactively work with technology vendors whose offerings can clearly help you lower your IT operations-related emissions. For example technology partners like Google Cloud, today run one of the cleanest clouds with the lowest carbon footprint. In addition, its Carbon Sense suite can enable retailers to accurately track & visualize their carbon emissions of cloud projects providing insights for actions via dashboards and charts. Getting the ability to track your emissions and be able to take corrective action to reduce the impact is a huge first step which can be taken. A great example of this can be seen with Etsy which migrated its eCommerce platform to the cloud and improved the sustainability of its business operations by achieving more than 50% savings in their compute energy.
Improve transparency, traceability & accountability across your supply chains.
Once you have sorted your digital infrastructure, focus on getting better visibility across your value chain and build operational intelligence by connecting your network/market data into a common platform- your supply chain digital twin which can be a globally consistent real-time events ledger, helping you bring transparency & accountability with your stakeholders across your value chain. Solutions like Tracemark in partnership with Google Cloud Earth Engine are advancing first-mile sustainable sourcing by helping brands & retailers to measure their suppliers based on their impact on the environment. This then brings actionable insights to inform procurement and sourcing decisions in line with sustainability objectives.
Reduce waste through efficient inventory management and better demand forecasting
Excess inventory of non-saleable products resulting from inaccurate demand forecasting and dumping unsold items in landfills isn't just bad business, it's bad for the environment. Technology solutions like Google Cloud's Vertex AI forecast can help retailers generate highly accurate demand forecasts and manage inventory placements efficiently to ensure they have the right products in the right places at the right time to increase sales and lower delivery costs. A fantastic example here is Carrefour, one of the largest retailers in France, which is leveraging Google Cloud's demand forecasting to drive better assortments, predict demand, serving customers the product they need while reducing waste.
Cut down on emissions by maximizing delivery fleet efficiency
Delivery fleets can consume immense amounts of fuel, adding to a retailer’s environmental footprint. By leveraging smart analytics, retailers can greatly reduce this impact while still meeting rising consumer demands for fast shipping. Solutions like Google Cloud’s Last Mile Fleet & Cloud Fleet Routing solution give retailers an integrated suite of mapping, routing, and analytics capabilities that can help them and carriers not only meet consumer expectations but also reduce emissions by optimizing load and distance travelled. In South East Asia, Go-Jek is a great example where they have partnered with Google Cloud to capture and analyze the data associated with their drivers to optimize routes and estimated times of arrival using Google Maps while identifying the unique needs of customers across markets. This in turn further reduces emissions while optimizing their fleet efficiencies.
Data-driven, technology-centric leadership, commitment & collaboration
As I have mentioned before, sustainability is a huge data challenge which can be positively tackled if the executive leadership is committed, has the visibility and is able to take data-driven informed decisions with strong collaborations across their value chain. This is where technology can play a huge role. Fortunately for us, advances in cloud technologies, data, AI/ML, and IoT have already given us the tools to drive this agenda and honour our commitments. The ball is now in the retailer's court. Every little step in this direction will make a huge impact.