Gartner: Three Sustainable Supply Chain Tips For Leaders
With sustainability becoming a fundamental part of how retail supply chains operate, it has become vital that retail supply chain leaders understand the best way to meet consumer’s level of concern around a greener approach.
Speaking during the virtual EMEA Gartner Supply Chain Symposium/Xpo 2020, Tom Enright, VP Analyst at Gartner, said: “They’ve moved away from just selling products to also really listening to consumers’ environmental concerns about how orders are delivered.”
1. Offer more sustainable delivery speeds
Consumers don’t always require their orders fulfilled as quickly as retailers think they do. Buyers can be flexible and open to alternatives, particularly when offered environmental impact information.
For example, the planting of trees in exchange for a carbon-reducing delivery method is a highly effective incentive for consumers to wait longer for a package delivery. While for retailers, the extra lead time allows for better inventory distribution across the supply chain.
2. Provide recyclable packaging
Numerous consortia, foundations and alliances have come to the fore in recent years to allow organisations to meet the challenging environment of legislation, technology and post-use options concerning packaging. You should ensure your firm works with these groups as the complexity of circular economies and new packaging technologies is too extensive for any individual company to tackle alone.
Firms are supporting sustainable packaging in innovative ways. For example, one organisation is aiming to decrease ocean waste by purchasing plastic from consumers and selling it to manufacturers to reuse while another offers reusables totes for consumer home delivery and the recycling of empty plastic containers.
3. Accept re-commerce as part of sustainable retailing
Consumers are increasingly rejecting the throwaway culture. This creates a market for what may be referred to as re-commerce. Lots of retailers, particularly sellers of apparel, footwear and accessories, provide services offering consumers to donate or resell their unwanted items instead of offloading them to landfills.
The number of companies reselling or recycling used clothing is accelerating. This includes established retailers such as REI, H&M, Patagonia and Primark, including new online players such as Poshmark, The RealReal and Kidizen. Research shows that within the subsequent 10 years, the resale market will exceed over US$80bn in value, outpacing fast fashion’s anticipated value of US$43bn.
As the circular economy takes hold globally, retailers must introduce sustainability into their entire supply chains. Responsible retailing can no longer be seen as an expensive inconvenience but a mainstream requirement.
Pandora and IBM digitise jewellery supply chain
Pandora has overhauled its global supply chain in partnership with IBM amid an ecommerce sales boom for its hand-finished jewellery.
The company found international success offering customisable charm bracelets and other personalised jewellery though its chain of bricks and mortar retail destinations. But in 2020, as the COVID-19 outbreak forced physical stores to close, Pandora strengthened its omnichannel operations and doubled online sales.
A focus on customer experience included deploying IBM’s Sterling Order Management, increasing supply chain resiliency and safeguarding against disruption across the global value chain.
Pandora leverages IBM Sterling Order Management as the backbone it its omnichannel fulfilment, with Salesforce Commerce Cloud powering its ecommerce. Greater automation across its channels has boosted the jeweller’s sustainability credentials, IBM said, streamlining processes for more efficient delivery. It has also given in-store staff and virtual customer service representatives superior end-to-end visibility to better meet consumer needs.
Jim Cruickshank, VP of Digital Development & Retail Technology, Pandora, said the digital transformation journey has brought “digital and store technology closer together and closer to the customer”, highlighting how important the customer journey remains, even during unprecedented disruption.
"Our mission is about creating a personal experience and we've instituted massive platform changes with IBM Sterling and Salesforce to enable new digital-first capabilities that are much more individualised, localised and connected across channels and markets,” he added.
Pandora’s pivot to digital
The pandemic forced the doors closed at most of Pandora’s 2,700 retail locations. To remain competitive, it pivoted to online retail. Virtual queuing for stores and virtual product trials via augmented reality (AR) technology went someway to emulating the in-store experience and retail theatre that is the brand’s hallmark. Meanwhile digital investments in supply chain efficiency was central to delivering on consumer demand.
“Consumer behaviour has significantly shifted and will continue to evolve with businesses needing to quickly adapt to new preferences and needs,” said Kareem Yusuf, General Manager, AI Applications and Blockchain, IBM. “To address this shift, leading retailers like Pandora rely on innovation to increase their business agility by enabling and scaling sustainable supply chain operations using AI and cloud.”
Yusuf said Pandora’s success was indicative of how to remain competitive by “finding new ways to create differentiated customer experiences that protect their enterprises from disruptions to help mitigate risk and accelerate growth”.