Retail sustainability was everywhere at NRF 2023: Retail’s Big Show. It was being discussed on the main stages in front of thousands of people, in private invitation-only meetings and on the trade show floor. As sustainability becomes increasingly embedded into retail business models, several key themes emerge when retail executives gather to talk about the future of retail.
Sustainability is a journey
Like any continual improvement process, sustainability is a journey; it is not a destination. Every retailer, brand and supplier is in a different place on their own journey. The retailers and suppliers most commonly recognized for their sustainability progress also have the most ambitious goals for future sustainability innovations. They are always chasing opportunities for further improvement.
Every retail role is a sustainability role
Retailers recognize that sustainability is a group effort. Sustainability executives and teams are most effective when the expertise exists beyond just one person or department — sustainable solutions require collaboration across the entire organization. During the NRF Foundation Student Program, retail executives from Dick’s Sporting Goods, Saks Fifth Avenue, Target and Walmart highlighted how roles as diverse as merchandising, operations, marketing, supply chain and government relations all play significant roles in retail sustainability initiatives.
Consumers have different sustainability needs
A significant percentage of consumers are seeking more sustainable products. They claim a willingness to pay more for sustainable products, particularly younger, wealthier and more educated consumers. Retailers recognize, however, that consumers are on their own sustainability journeys and have their own sustainability priorities. Some focus only on product packaging when considering sustainability. Others examine the sustainability impacts of the product inside the packaging, including how it was made, the source of the raw materials, concerns about product ingredients or its carbon footprint. Determining which sustainability attributes are most important to consumers and how they rank with other traditional consumer priorities like price, performance and availability remains a key retailer priority.
Sustainable retail addresses social issues
Sustainability in the retail sector addresses more than just environmental considerations; it’s about the people too. That’s why retailers like Target have programs to support smaller suppliers led by women and people of color. Chobani founder and CEO Hamdi Ulukaya shared his story as an immigrant from Turkey in a keynote address at NRF 2023, connecting his experiences with the company’s efforts to support immigrant workers.
Resale retail continues to scale
Multiple Big Show sessions addressed the rise of resale retail, in which traditional retailers or dedicated online marketplaces enable consumers to buy lightly worn, repaired or refurbished products. IKEA shared how its furniture resale program has increased foot traffic in its physical stores while also creating environmental and consumer benefits. Other sessions addressed the unique needs of luxury resale markets and identified how the environmental, financial and aesthetic demand for vintage items drive the resale market — one analyst suggested the resale market could reach $300 billion by 2031.
Learn more about how retailers are utilizing sustainable practices.
Sustainable retail requires sustainable suppliers
As much as 98% of a retailer’s sustainability impacts are outside its direct control. The impacts are driven by the decisions of their suppliers and their suppliers’ suppliers. Each of those suppliers depends on additional networks of suppliers for the subcomponents they need. A single product can be the result of a network of hundreds or thousands of suppliers. Finding ways to influence suppliers deep within supply networks remains a challenging goal for the retail industry.
Collaborating with suppliers is crucial
The most successful sustainability solutions emerge when retailers collaborate closely with suppliers. Walmart’s Project Gigaton project includes, among other initiatives, an effort to help suppliers finance their own transitions to renewable energy. Executives from Levi’s and L’Oréal also spoke at NRF 2023 about the importance of collaborating with suppliers on common sustainability goals. Seventh Generation, a supplier of sustainability-focused cleaning and personal care products, described how it works with retail partners to understand which dimensions of sustainability are most important to each retailers’ sustainability goals.
Did you miss us in NYC? Take a look at our NRF 2023: Retail's Big Show event recap.
Sustainable retail requires better data
Tracing sustainability impacts throughout vast supply networks requires better systems for collecting, validating, sharing and analyzing the data. Sustainability data systems are being developed to address specific concerns like human rights, recycled or organic content, carbon footprints and origins of raw materials, but many systems remain proprietary, incomplete and unable or unwilling to share data with other systems. Fragmented data protocols and systems complicate sustainability efforts. Solutions are emerging based on common auditing protocols, public blockchains and artificial intelligence systems, but no system has yet been widely adopted that meets the sustainability needs of retailers.
Retail conferences can be more sustainable
NRF 2023 attendees saw efforts to make the conference itself more sustainable. Stages featured reusable, aluminum water bottles rather than single-use plastic water bottles. Exhibitors were encouraged to reduce the environmental impacts of their trade show preparations and to donate excess materials through the JavitsCares program to local nonprofit organizations throughout New York City. The large banners displayed throughout the Javits Center are being upcycled into colorful bags and wallets.
The retail industry’s focus on sustainability has never been stronger. Consumers, employees, investors and others are talking about it and NRF continues to share best practices, develop tools and facilitate conversations to accelerate their sustainability-focused progress.
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