RSR Research: Getting Real About Green

Sep 27, 2010
Paula Rosenblum

By Paula Rosenblum, Managing Partner

Through a special arrangement, presented
here for discussion is a summary of an article from Retail Paradox,
Retail Systems Research’s weekly analysis on emerging issues facing retailers.

our first benchmark report on environmental initiatives in retail, What
Can Green Do for You
? released
in May 2008, 86 percent of survey respondents reported packaging of private label
product as the strongest opportunity they saw to drive eco-brand awareness. Soon
afterward, the Great Recession brought bread and butter cost-savings (most especially
in stores and in the computer room) back to top of mind awareness.

Behind the
scenes, however, eco-packaging moved forward. Most of the single-serving bottled
water we buy now comes in bio-degradable plastic bottles. Most recently, retail
giant Whole Foods and CPG goliath Procter & Gamble have passed regulations
for sustainable
and recyclable packaging

Foods used the "M" word (mandate), requiring suppliers to
use easily reused or recycled, non-toxic packaging materials. The ideal scenario
is to switch to glass whenever possible. This follows other mandates on organic
beauty products passed by the chain this summer. Concurrently, Gisele Bundchen,
an endorser of Pantene’s products, announced
P&G’s plans
switch to sustainable packaging made from sugarcane. Other product lines, Pro-V,
CoverGirl and MaxFactor, will follow over the coming two years.

The point here
is that the switch to greener packaging our retail respondents identified almost
three years ago is slowly coming to fruition. We’re
fairly certain the switch is either cost-neutral or cost-saving, but both announcements
focused much more about brand building. While it has been fashionable to talk
about sustainability, there were many who thought it was all about "green-washing" —
pretending to be green, rather than actually taking any meaningful action.
These announcements tell us that some major players are taking sustainability
seriously. After all, these kinds of changes don’t go into place overnight.

This year,
we’re running our third annual benchmark study on sustainability.
Early responses are interesting:

  • One half of respondents report green initiatives have reached the point
    of being "strategic initiatives for the entire enterprise." Thirty
    percent report it as a tactical initiative for specific departments.
  • A plurality, (32 percent) believe they haven’t yet identified all
    the ways the "green agenda" will impact their enterprises. In
    other words, they expect more change is going to come.
  • While more than tw-thirds still report cost reduction as their primary
    motivator for green initiatives, 51 percent believe it’s just the ethical
    thing to do.
  • Packaging and store operations energy management remain the biggest opportunities
    for cost reduction.

Ironically, while retailers continue to use green as a brand builder, they
also seem ahead of the customer. Sixty-four percent report their customers
yet demanding greener products or storefronts.

Discussion Questions: How has
the recession affected the retail industry’s movement toward sustainability?
Are retailers looking to sustainability as less of a cost-reduction maneuver
and more of a branding tool? Where do you expect to see progress in the years

Please practice The RetailWire Golden Rule when submitting your comments.

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5 Comments on "RSR Research: Getting Real About Green"

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David Biernbaum
10 years 7 months ago

Consumers are willing to purchase “green” and “eco-friendly” products if it does not cost more to do so. I have also found that unless eco-friendly packaging appears to have a quality design, consumers will resist it. Most consumers are eco-friendly minded to an extent, but most are not so evangelistic about it that they are willing to pay more or take chances with inferior looking products. And THAT is the inconvenient truth!

John Lofstock
John Lofstock
10 years 7 months ago

I find it hard to believe that being first to market with “green” products will have a lasting impact with consumers when it comes to retailer loyalty. Given that, if 64% of retailers reported their customers aren’t yet demanding greener products, there should be no rush to embrace a green strategy just for the sake of being green. Operators need to take the time to develop an eco-friendly strategy that reduces operating costs and offers value to customers.

The bottom line is that, in this economy, customers may want to practice being green, but it’s too cost prohibitive. Pushing pricey green products on consumers will turn them off and the effort to get them to try these green products in the future will be that much harder.

Joan Treistman
10 years 7 months ago

While some consumers had some interest in buying and acting green, the recession has thrown them off. Kermit knew what he was talking about when he said “It’s not easy being green.”

Retailers and marketers ahead of the consumer? It’s more about retailers and marketers getting to where they have to be for the future…their future and the consumer’s future. I believe it’s an investment that will pay off in the long run.

Ed Rosenbaum
10 years 7 months ago

A new favorite expression is: “It’s not about the money, it’s about the money.” As long as there is savings involved, the consumer will look but not necessarily purchase. When there is a value other than cost savings that the consumer can wrap their arms around, then we may be on to something. Until those two perfect storms meet, we can sit back and say “show me”.

Liz Crawford
10 years 7 months ago

This is easy – follow the money.

Wherever saving money means being green (say, re-using something), there the recession has accelerated the green movement.

Wherever green costs more, there the recession has retarded the movement.


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