Retailers Weigh Challenges of Sustainability

DAN ALAIMO

ORLANDO, Fla. — Sustainability will play an increasingly important role in general merchandise sales and wellness, although retailers and suppliers have to be careful of overstating their commitment to the environment, said speakers during last week's General Merchandise Marketing Conference here of the Global Market Development Center, Colorado Springs.

“A large challenge for both retailers and suppliers is the backlash,” said Tom Watson, vice president, general merchandise, Hy-Vee, West Des Moines, Iowa, during a retailer panel that followed a presentation by Maryellen Molyneaux, president, Natural Marketing Institute, Harleysville, Pa.

“With the carbon footprinting that is coming forward, do we as a retailer want to wave our flag and, six months later, have a report come back that says we were not exactly correct?” he said.

One example he cited is durable shopping bags that are made in China. After retailers introduced them — sometimes with great fanfare — it was established that the importing process was less friendly to the environment than the savings of using them instead of plastic bags. Many of these retailers are now trying to source the bags domestically.

“So it is a challenge for both retailers and suppliers to be careful about the foot you put forward, and make sure you tell the correct story,” Watson said.

Consumers do not expect retailers and their suppliers to be perfect, Molyneaux said. “They expect you to try. When you tell them that you are trying and you are learning as you go, that makes a great example. We learned that the bags from China aren't such a good thing when you talk about the final carbon footprint.”

“One of the challenges we have is understanding what is truly eco-friendly,” said Curtis Maki, vice president, HBC/GM/pharmacy, Topco Associates, Skokie, Ill.

“There are a lot of different validations, seals and papers out there, and as buyers and category managers, how do you wade through all that? What is just marketing and what is truly fact? Meanwhile, we found that the consumers are very educated, and most of them know what is eco-friendly,” he said.

Worries over products like lead-based paint in toys and baby bottles made of plastics containing toxic bisphenol A will ultimately have to be dealt with by retailers, said Jay Goble, vice president, merchandising, Valu Merchandisers Co., Kansas City, Kan. “Rationality” in cases like this is a challenge, he said. “We have to race like the wind to make sure our stores are purged, our category managers are filtering that out, and none of our competitors are making a statement that might make it a greater potential threat than it is.”

The American consumer has two desires, Goble said: “One, product safety at the expense of cost, and two, the re-institution of more domestic production capability. The return of home-manufactured products could be a long-term trend that could benefit all of us,” he said.

“At the very least, there are regulations coming, and I believe that early next year we will see them. If we are going to bring products in from offshore, hopefully our manufacturers over there are on the same page,” he said.

Another challenge faces category managers who have to make decisions on the mix for certain product areas, said Steve Davis, senior vice president, sales, merchandising and operations, Pharmaca Integrative Pharmacy, Boulder, Colo., and a former Wild Oats Markets executive.

“If retailers are going to get into the sustainable business and bring products in of this nature, the challenge is how do you get that customer to understand that this is a value, and what they should buy vs. more of a mainstream product?” he said.

“As a retailer, another challenge is to understand how to be authentic to the customer, and how the customer can understand that if they are going to shop you, they are going to shop you for more than just value. They are going to shop because you live and breathe the lifestyle, which is one you would like for them also,” Davis said.

In her presentation, Molyneaux said natural, organic and sustainable products are becoming mainstream. “Principles of conscious consumption will come to dominate the brandscape,” she said. New survey results from the Natural Marketing Institute showed that 60% of Americans said they are becoming increasingly concerned about protecting the environment, and 43% said they are actually doing something, she said.

Retailers and manufacturers should expect more government involvement, because 50% of Americans said the government should spend more time and money on environmental issues than on the Iraq war, she added. Forty-seven percent said they can personally affect global warming, Molyneaux noted.

One general merchandise example she cited of an environmentally sensitive product going mainstream is compact fluorescent light bulbs. Molyneaux also cautioned the industry against greenwashing, or marketing statements that portray an ecological image, but are not sufficiently backed up. Consumers are increasingly able to discern such efforts, she said.