The Retailer Spring Edition 2023

THE RETAILER

26

DELIVERING SUSTAINABLE VALUE TO CUSTOMERS

Andrew Davidson Director – Retail Practice 4C Associates

H ow is the customer perception of value impacting buying, sourcing and ranging decisions for retailers? Driving sustainable value within the retail sector is an increasingly important issue in today's world. Consumers are becoming more aware of the impact their purchases have on the environment and society and are looking for retailers and consumer brands to be responsible and make a positive impact. We looked to understand whether retailers and consumer brands organ isations are prioritising long-term sustainable value over shorter-term economic objectives by looking at the end-to-end supply chain overlaid with our Prosperity Framework. This helped to determine the ethical, environmental, and economic factors that represent the values and behaviours that enable a business, and the world it impacts, to prosper sustainably.

Ethical Value: One way for retailers to demonstrate ethical value is by implementing a robust and measurable responsible sourcing policy, only sourcing products from suppliers who can demonstrate a positive impact on the environment and society, and who operate in a fair and ethical manner. Organisations can prioritize ethical value by maximising transparency throughout their supply chains with a commitment to calling out inap propriate practices and only working with suppliers who uphold the highest ethical standards. Top-performing organisations will be doing this regardless of potential economic costs. Investment is required in education and learning resources to enable buyers and procurement organisations to determine what makes an ethical supplier and work together as an industry to set universally accepted guidelines to follow (e.g. the ILO indicators). There is too much reliance on suppliers providing self-certified audits and buying departments lack time to conduct any meaningful evaluation of supplier submissions. Cross-industry and sector learning should also be encouraged: for exam ple, public sector organisations have generally been more proactive in addressing this within their supplier evaluation frameworks. Opportunity exists for the development of an independently verified supplier database and a gold standard based on industry-standard indi cators (e.g. the 11 ILO indicators for Modern Slavery) for fully compliant suppliers, enabling buying organisations to know with greater certainty they are working with ethical suppliers.

and adoption rates.” ‘‘

Greater collaboration as an industry to share development costs and adopt stand ard practices would increase transparency

Environmental Value: Many retailers make environmental impact a prominent part of their sustainability agenda. It makes for good headlines and eye-catching statistics, but only a few have invested in developing genuine, measur able baselines from certified sources upon which environmental claims were based. Tracking and analysing end-to-end lifecycle costs is possible but rarely done in a way that is verified independently or substantiated. Retailers and consumer goods companies have gone to the last degree to make products available to customers wherever and whenever they want them (same-day delivery, marketplaces) reducing the barriers to customer purchase decisions and thus enabling overconsumption vs genuine need – just look at all the unnecessary stuff we acquired online during the pandemic! The knock-on effect of this drives increased stock holding, warehousing & logistics costs, and excess packaging waste – all