Green Retail

Is the current recession and decreased consumer spending causing retailers and marketers to change their environmentally correct efforts?

In 2007 the Environmental Leader reported that two-thirds of chief financial officers at leading U.S. retailers said their company was actively involved with “green” or environmentally friendly practices.  Forty-four percent of those also indicated that they had increased their investments in these types of practices throughout the previous two years.

Among those retailers involved with green practices, 34 percent exclusively pursued internal activities by environmentally modifying operations and structures while nine percent remained focused solely on external practices such as marketing and selling green products.  Fifty-seven percent of those retailers engaged in a combination of both external and internal green practices.

The benefits of implementing green initiatives have widespread effects. Two-thirds of CFOs cited improved brand image among customers and employees as the greatest motivator for their company to pursue environmentally friendly practices.  54 percent cited “image among consumers” and 13 percent cited “image among shareholders”. 15 percent of the CFO’s noted tax breaks or tax incentives as the greatest “green” motivator followed by 10 percent citing city/state or zoning regulations.

According to a study by BDO Seidman, LLP among the top 100 largest retailers, eighty-three percent are involved in green practices and a majority of those (62 percent) have increased their green investments during the past two years.

Resources wasted equals profits lost.  Where there are inefficiencies in business operations there is room for improvement.
Energy prices and atmospheric temperatures are rising which in turn is drawing attention to energy efficiency as a smart environmental and business practice.  Reducing energy consumption will reduce greenhouse gas emissions as well as operating, manufacturing and consumption costs.

Energy management can have a greater impact on emission reduction if companies choose to make investments by purchasing alternative energy.

According to Dan Kubala, vice president of marketing for Austin, Tex.-based Site Controls, nearly all retailers can boost their bottom line almost immediately by reducing energy costs by implementing energy management systems.  Noting that the level of capital investment is relatively low and payback for the best systems occurs rather quickly (within 18 to 24 months).

Consumers are becoming more and more pro sustainability and are making purchases with this in mind.  Kubala also reports that forty-six percent of consumers say they would shop at a retailer more if it was environmentally friendly, while 47 percent say they would pay more for environmentally friendly services, products or brands.