Retailers need to achieve supply chain transparency with suppliers and customers to meet modern sustainability needs.
Chain Store Age recently spoke with Sue Welch, CEO of Bamboo Rose, about how retailers can leverage digital technology to streamline and open up their supply chain operations for enhanced sustainability. Bamboo Rose is an online marketplace Welch founded in 2001 that enables retailers to shop for products from virtual supplier showrooms in the same way consumers shop e-commerce marketplaces.
How can retailers use technology to ensure sustainability in their operations?
“Sustainability is quickly becoming a top consumer demand. Consumers want to know how their favorite brands are doing their part to ensure environmental responsibility within operations.
“One area where retailers and brands are focusing is around material and component waste. In apparel manufacturing, about 15% of fabric ends up on the cutting room floor. Reducing that number to 10 or 5% offers a huge opportunity for cost savings. Retailers and brands can leverage technology tools to manage their inventories and materials more intelligently. Additionally, reporting accurately on these waste-reducing initiatives is vital, but difficult to track without a digital record to pull on.
“Similarly, the trends around expedited shipping are criticized as an environmentally harmful paradigm to establish. This trend amplifies retailer carbon footprints and often leads to wastage around packaging materials or doubled packaging efforts.
"While it’s in a company’s best interest to seek out ways to consolidate products to a single package, it requires a mature technology stack to intelligently centralize several customer orders or products from multiple locations.
“Retailers should look to limit packaging by investing in AI to support consolidation of orders and encouraging customers to obtain online orders from other channels, such as curbside or in store pickup.”
What are some enterprise benefits of establishing a sustainability tracking system?
“Improving supply chain governance can make a significant impact on promoting human rights, fair labor practices, environmental progress and anti-corruption policies in regions where retailers source their products. However, implementing and maintaining supplier compliance across several different regulatory categories can be difficult due to the size and complexity of a company’s supply chain.
“To improve supply chain governance, successful retailers will leverage digital collaboration platforms to increase visibility with suppliers and other partners, and to ensure they are maintaining adherence to both government and company-driven environmental standards.
“This means working with your production companies to use sustainably harvested fibers and materials, and creating products and packaging from recycled materials. Using these types of materials can help lower costs, waste and resource usage within the plants.”
How can you prove your sustainable efforts to your customers?
“Retailers can promote sustainability by proactively educating both their employees and the market on their sustainability initiatives. For employee education, it’s important to engage retail shop floor employees so they are able to inform consumers and tell the story behind a product or fabric.
“Bamboo Rose is working with some customers to develop labels that tell the story of that particular item. As consumer expectations continue to shift, transparency around clothing production and materials will become brand-differentiating.”
What is the best way to start a sustainability program?
“Retailers should identify core areas of their business and operations where there is an opportunity to improve sustainable practices and then work to understand how to measure and quantify those potential improvements. Core areas that retailers usually focus on include leveraging recyclable materials, components, and packaging; reducing the carbon footprint of their supply chain; and pressuring business partners to adhere to more stringent environmental standards.
"Once these initiatives have been set, retailers should enact metrics, processes, and technology tools to accurately quantify and communicate the improvements they make.”
What will the major sustainability trends be in the next 12 months?
“In the next 12 months, consumers will increasingly expect retailers to share their values around sustainability or they may choose to take their business elsewhere. In response, retailers will leverage their ecosystem of partners and technology infrastructure to start making real progress on being more environmentally friendly.
“One example is H&M’s Treadler service. Treadler connects small retailers and brands with H&M’s world-class supply chain organization and product development expertise, allowing these third parties to accelerate their own sustainability practices and initiatives. Through this initiative, H&M is using technology to bring the efficiency and scale of their own supply chain operations to smaller brands – allowing them to tap into environmental initiatives they could never afford to tap into on their own.”
Editor’s Note: Sue Welch was named as one of Chain Store Age’s Top 10 Women in Tech for 2020.