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The Role of Retail in a
Sustainable Future
FoodProWest - 2010
June 4, 2010 - Burnaby BC
May 5, 2009
Collage
(From the French coller, to stick) is
regarded as a work made from an
assemblage of different forms,
thus creating a new
whole.
In
On
Around
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Health & Wellness
Driven by Boomers
Physical Health & ‘Looking Good’
Younger Canadians concerned with healthy eating and exercise
Childhood obesity a looming issue
The Body Shop changed the world once
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Retail is Theatre
Retail is People
Retail is Logistics
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Complex systems
Retail shapes shopper
s
Shoppers shape retail
10
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12
25% of retail = food & bev Canada (1997 - 2007)
Source: Statistics Canada (Trade Group)
-
50
100
150
200
250
300
350
400
450
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Annual Sale
s ($
Bill
ions)
Food & Beverage
Clothing & Accessories
Miscellaneous
General Merchandise
Pharmacies & Personal Care
Automotive
Home Furnishings / Electronics
Building & Home Supply
25%
7%
34%
13
Two retail worlds
ChainStores
(3+ Stores)
2/3$ Sales
Large Retail has clout & influence
Small Retail has entrepreneurship, flexibility, adaptability
All Retail is part of the Larger System
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Types of retail competitors
Mom & Pops(Self employed)
Growth start-ups &
concepts*Chains
The majority
At risk (but continuously emerging)
Fewer in number
Catalysts for retail
innovation
Concentration of Sales
$
Greatest influence
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Strategic evolution1994 - 1996
Strategy = Buying Season
5 Year commitments
“We walk the floor”
Insular
Beginning of competitive boom
Minimal technology
“We know”
Retail = formula
Few tools
2010
Strategy = LT Planning
3 Year commitments
Data-driven
Help from outside
Perpetual new competition
Tech impacting all aspects
“We need answers”
New skill-sets
Many affordable apps
16
Retail strengths and weakness
Strong: on tactics and short-term strategy, adaptation to its ‘environment’ and adopting new tactics.
Weak: true innovation, organizational change, long-term vision and strategy.
17
Canadian Retail Sales % Change1999-2009
-4%
-2%
0%
2%
4%
6%
8%
10% All retail
GrocerySource: Statistics Canada
% change in dollar sales from prior year
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Canada is under-competed
Just 11 of top global 250 are Canadian
Only 7 of top global 20 are in Canada today
Foreign retailers often choose Canada as warm-up for US
Outperforming US past few years
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Retail strengths and weakness
Stronger: on tactics and short-term strategy, adaptation to its ‘environment’ and adopting new tactics.
Weaker: true innovation, organizational change, long-term vision and strategy.
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What keeps retailers up at night?
Technology
Inventory management, supply chain
Sales growth, expansion
Doing more with less
Staffing
New channels and competitors
… and Sustainability
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Community
Not just your neighbours
Social networks & media
Building community with your audiences… but also enabling them with each other
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Retail relatively benign
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“Development that meets the needs of the present without compromising the ability of future generations to meet their own needs".
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Shoppers want green plus plus
…Price, Quality, Convenience, Design
Expect brands to “be good”
Often a paradox in the same shopper.
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Green high on public agenda
Must help bottom line
Catalyst is price curve
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Sustainability drivers Waste Reduction – cost
savings
Labour Market key
Not green product sales Health + kids excepted Price falling will help
Risk management, Regs
Brand differentiation
Avoid falling behind
“Right thing to do”
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Possible barriers… (from DIG360 Retail Cares Study)
Customers not paying for it.
Lack of human resources
Budget restraints
Lack of time
We are doing much already; there are diminishing returns to our efforts.
Customers not demanding it
Difficult to make a business case
32
Green retail activities (Executive survey from DIG360 Retail Cares Study 06)
More common Reducing waste in
operations +/or reducing energy use.
Offering environmentally friendly products to consumers
Mandating eco-friendly packaging
Developing or designing green products
Incorporating green procurement of supplies and services.
Less common Supporting specific
environmental groups Conducting green building
and design (such as LEED) Many mall-based / leased
premises Using green power After sales environmental
product stewardship Public accountability reporting Participation in carbon offset
programmes
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Org charts matter
Where in the organization does sustainability lie?
Are the messages and measures in sync?
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Consortium
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2010
Global leaders continue to lead
Grocery at front of categories
Canada ??
Waste reduction = bottom line
Moving to product and package
Pushing back on supply chain
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Those stuck in the middle at risk
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Three levels of true green
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Collaboration & co-creation
47
Influence
48
Suppliers will produce green at
great pricegreat qualitygreat designgreat convenience
This will happen
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Sustainable Retail
The next transformative catalyst!
Similar to Internet in 90’s
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Lessons from Internet adoption
Disruptive or Transformative?
1994 20091999
Dial-up, bbs
Publishing
“Yellow Page”
Netscape
“Retail Dead”
New Economy
Ecommerce
Alt. Channels
DSL
Rich media
Multi-Channel
Web 2.0
Alt Platforms
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Suppliers
Get on the curve
Anticipate more and more demands from regs and shoppers via retail
Seek to collaborate
Understand who is making decisions
Green at great price
Packaging, Life cycle
Thanks!
For more information, contact:
David Ian GrayDIG360 Consulting Ltd.
Follow on Twitter: www.twitter.com/davidiangray
May 5, 2009
