Retail and Sustainability: The Walmart Example

The world is becoming a melting pot of different cultures, styles, and beliefs with greater connectivity and shared experiences.

This not only improves innovation in society but also pushes us toward the betterment of quality of life. With new products emerging over time, it is important to have different platforms where consumer goods and services can be sold to the potential customers. 

The Retail sector has been crucial in satisfying customers’ demands through the supply chain. However, this sector has been earning profit at the expense of the environment for a long time now. 

It is no doubt that consumers, especially young consumers, are demanding that companies make their products and businesses sustainable, which has been a huge driving force for the companies to work on their Social & Environment policies.

A 2018 survey from data platform Euclid found that “52% of millennials and 48% of Gen Xers feel it’s important that their values align with the brands they like, while 35% of baby boomers surveyed felt the same way”. Implementing sustainable practices in the retail sector not only protects the environment, but can also attract more consumers. 

This blogpost will outline the environmental sustainability issues in Retail, and how it is possible to solve these issues using Walmart as a retail sustainability leader.

A long-term vision

Eleven years ago, Walmart laid out three broad sustainability goals: Supply of 100% renewable energy, eliminate waste in its operations, and create more sustainable products for customers. 

Now, it is the leading company in the US for total on-site solar capacity and installations, where they will be able to save $1 billion a year in their future initiatives.

In addition, CO2 emissions by Walmart reduced by 650,000 metric tons due to doubled fulfilment operations in 2016. Also, Walmart has significantly reduced plastic bag waste – about 40% – which diverts trash away from landfills.

What is this company doing differently from other companies to keep this drive for sustainability in Retail? 

Sustainability branding

Unlike other companies, Walmart has not been talking about their environment-friendly initiatives in the media. They think it would bring more criticism than positive responses from the public in terms of all the steps they have yet to take to become eco-friendly. The management of Walmart understands that they can neither change their environmental impacts overnight nor control vocal activists.

Therefore, they do more and let the numbers speak for themselves instead of marketing and grabbing attention of the public. This saves time and resources to focus on real sustainability efforts.

Perceived cost

Moreover, sustainability branding can also change the mindset of customers in terms of perceiving sustainable products as costly. This can be a huge loss for Retail corporations like Walmart, which aim to sell large volumes of great value products.

Thus, it becomes important for Retail companies to first design a sustainability framework, before reaching out to their customers and seeking help from advocacy groups. 

Cost of supply

Finally, Walmart has not only been optimising its own operations, but has also been looking at its suppliers and distribution networks.

For example, when the concept of environmental stewardship was emerging, customers were fine with buying organic or sustainably sourced products in higher prices. This posed a threat for Walmart because their customers shop for ultra-low prices. So Walmart started working with suppliers to seek out low-cost innovations in operations, which helped in sustainability without altering the prices. This encouraged buyers to keep buying the products without worrying about the extra sustainability cost.

Companies do know about the ways to reduce their negative impact on the environment and understand that fixing it can’t happen overnight.

However, the important factor is to balance between business and sustainability, which can create win-win opportunities for the businesses and the environment. Walmart has been successful in being a role model for other companies in terms of sustainability.

Further reading:

• The Elusive Green Consumer (Harvard Business Review)
• Brands increase trust – and prices – through sustainability (Nielsen)
• What happened to Euclid? (Daily Wireless)

Photo by Markus Spiske on Unsplash