Thinking Outside the Big Box Store

Allie Williams, IOM
Executive Director, CRA

Retailers appealing to consumers through their corporate responsibility programs face an uphill battle. Certainly, they can do this with their policies and practices as responsible corporate citizens. They can be committed to sustainable growth and development, to local sourcing, environmental causes, fair employee relations, reasonable wagers, governance, and their philanthropic efforts. However, consumers tend to shop based on the quality of the product, its price, and its convenience. While consumers may appreciate the company’s values and even want to reward them, at the end of the day consumers are looking for value.

These corporate goals and practices need not be distinct.

The larger online retailers—companies like Wal-Mart, Amazon, and eBay—show that sustainable growth, and sustainable development can go hand in hand with value. Take Amazon, for example.

Even though the practice of shipping individual products in individual boxes may seem environmentally unsustainable or wasteful, the Amazon model of delivery may actually be better for the planet, and also for the company itself. The traditional brick and mortar store has to maintain regional warehouses, distribution centers, transportation facilities, as well as the actual big box stores. They also have to maintain parking lots, employees’ access to the facilities, maintenance and upkeep, and other costs of doing business. Employees working at the stores drive to work, the lights are kept on, inventories preserved, heating and air conditioning maintained, and parking lots and roadways cleared of debris. All this adds up to environmental costs and expenses to the company. In addition, consumers have to travel to the big box stores, using time, energy, gasoline, and wear and tear on vehicles. So even though the Amazon model of sending a cardboard box full of packing materials (which may only contain a single tube of toothpaste) may seem wasteful, at the end of the day, this may end up being a more efficient—and more environmentally sound—solution to shopping.

This is not to say that the model can’t be made more efficient. Obviously, one of the things that Amazon and other retailers are looking at is an even more effective means of distributing products from manufacture to the ultimate consumer. This may involve scooters, smaller trucks, on-demand delivery service, leveraging orders, or even drones; and it remains to be seen as a smarter and more efficient way. Some solutions may piggyback the “I-was-already-going-there-anyway” solution—maybe an Uber for shipping products, or crowdsourcing delivery. More efficient packaging, together with more environmentally conscious reuse of such packaging are also part of the “greening” of online stores.

This does not mean that consumers will shy away from the brick and mortar store. When television first came out, people were afraid that this signified the death of movie theaters. Why would anyone want to go to the movies on a Saturday night when they could stay home and watch TV? The answer, of course is not about the movie—it’s about the movie experience. Stores—particularly brick and mortar retail stores—need to become more of a destination for people to go because they want to be with other people, and they should create an experience with their customers who want to touch and feel the merchandise. I can buy a cup of coffee anywhere or make it at home. Why go to a particular coffee shop? For the experience. Even so, the brick and mortar store can also become more sustainable. Technologies like radio-frequency identification or on-shelf scanning can allow pallets filled with products to be inventoried and encourage consumers to bag-as-you-go, with rapid checkout—no need to scan individual products.

There are intermediates between brick-and-mortar and online stores, too. U.K. retailer Tesco has set up virtual stores in certain Korean subway stations and at Heathrow airport using interactive large screen displays. A consumer can walk through full-sized virtual aisles, scan products, and put them into virtual carts. When you get home, the selected grocery items are waiting for you. The process encourages tube ridership, allows for efficient use of “downtime,” prevents or minimizes multiple trips to the store, and retains the ability for things like impulse or last minute purchases. Not to mention that it’s cool.

One step past this is to integrate the Internet of Things (IoT). Already, Amazon provides Amazon connected “buttons” for products such as laundry detergent or dish soap. Tap the button and you’ve ordered a refill which comes the next day. Ask Alexa, the Amazon Echo doppelganger for a new cashmere sweater, and it’s in the mail that afternoon. With IoT appliances, your refrigerator will know when you’re out of juice and order it for you, or it will decide whether that “use by” date was mandatory or discretionary. Imagine an app whereby a consumer can pre-set their own level of social or environmental consciousness of their online orders. The app expresses the consumer preference and acts as an intermediary between the consumer and the online retailer or big box store. Additionally, an app could find local items as well.

Sustainability need not be expensive. It need not cut into our bottom line. Sustainability—if done right—not only improves customer experience, increases brand loyalty, and increases commitment by management, but it can also deliver better, cheaper, and faster products for a consumer’s needs in a way they want to receive them. At the end of the day, doing well by doing good is the ultimate objective of sustainability.

Posted April 5, 2017 in CR Blog