By Steve Rowen, Partner
4/15/2008
RSR is preparing to release its first ever benchmark report investigating retailers’ environmentally-sound practices, What Can Green Do for You? The results of one particular aspect of the study are quite interesting.
In the Business Challenges section of our framework, we asked our respondents why they’ve proactively invested in green technologies. The overwhelming response from winning retailers (those who already outperform their peers)?
It’s not about cost.
Quite simply, winners don’t yet care about cost reduction. When asked how important cost savings are in the discussions surrounding green implementations, 48% of winners identified it as virtually unimportant (versus a fully 0% of laggards). At the same time, 77% of laggards view cost reduction as a high priority. This is a fascinating indicator of how, once again, winners don’t just do things differently, but tend to do different things.
What’s more, is that when asked about social responsibility, the same pattern as seen with cost reduction reemerges. From our results, 72% of winners view ethical obligation as an “important or higher” motivator to bring about more environmentally-responsible products and practices. Only 28% of laggards identify ethical obligation as any type of importance at all.
Conversely, 71% of laggards pointed to ethical obligation as “less than important,” with 57% identifying it as of “little to no” value at all. This is a staggering contrast in overall viewpoint.
From this, one of the most basic fundamental differences can be drawn out between retail segments. When pertaining to environmental issues, all segments agree that the customer will be the driver, and whether errant or not, that her time has not yet fully arrived.
Yet underperforming retailers continuously ask how much green initiatives will cost, and feel no accountability to the environment in which they live. Retailers that outperform their peers are actually investing now, giving less thought to cost-reduction, and viewing the brandbuilding done today as smart business for when customer demand invariably heightens. In addition, winning retailers recognize that their actions have greater impact than that of just financials.
The full report, What Can Green Do for You?: Gaining Strategic Advantage in Retail via Environmentally Sound Practice Benchmark Study 2008 will be available on April 24 – Earth Day. The results tease out much more regarding where winners and their competitors view “today opportunities” for cost reduction, as well as which internal obstacles stand in the way of more green implementations, and how they can be bested. We look forward to providing you with this content next week.
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