NRF2022: Retailers Prioritizing Sustainability
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NRF2022 focused on customer experience, consumer loyalty and diversity, and inclusion in retail
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Supply chain optimization and development of sustainable products – two significant ways to achieve sustainability targets set by retailers
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GlobalData's company filings analytics show increased mentions of ESG among retailers
NRF2022: Retailers Prioritizing Sustainability
National Retail Federation 2022 (NRF2022), branded as "Retail's Big Show," took place during January 16-18, 2022. NRF is a platform for imagining the future of retail. Discussions this year focused on topics such as technology in retail, customer experience, consumer loyalty, and diversity and inclusion. The event witnessed seasoned business leaders such as IKEA, Walmart, and Rothy's discussing the industry's future, with all addresses having a common thread - "Sustainability in Retail." NRF acknowledged sustainability in retail as one of the most critical areas. It also developed guidance for retailers to help them in their journey to achieve net-zero targets while considering the market trends.
The retail sector is nearest to the consumer and is thus affected drastically by consumer trends. With growing awareness of climate change, retail buyers make a conscious choice of greener products. This external push from the market has become the driving force for retailers to deliver products that consider environmental and social impacts. Retailers are trying to innovate conventional business processes and end-products. Looking at the vast scope of retailers to influence consumption, successful steps by some of the leading retailers discussed below can give us a peek into the future of sustainability in retail.
IKEA – Affordable Sustainability
IKEA considers sustainability as part of everyday life. Over the years, it has launched various initiatives ranging from sustainable production to promoting circularity. The company intends to be a leader in the circular economy, with an ambitious target of designing all its products using only renewables and recycled materials by 2030. The company has taken steps to buy back old IKEA products and launched a product range designed entirely with recycled materials. It is also trying to adopt sustainability in its most consumed raw material - wood. IKEA plans to use recycled wood in at least one-third of its wood range in 2030. In 2021, IKEA introduced energy-efficient LED bulbs and affordable air purifiers, and plans to introduce recycled and renewable foams. Even its food business promotes sustainability by phasing out single-use plastic. In 2021, it started offering plant-based alternative foods with a considerably low climate footprint.
Walmart – Focus on Energy Consumption and Supplier Operations
Walmart has net-zero commitment for 2040. Two areas of focus for the organization to achieve its net-zero targets are - reducing energy consumption in operations and optimizing supply chain carbon footprints. According to GlobalData, in 2020, Walmart stores had a 10.5% market share of global hypermarkets, supermarkets, and hard discounters. Given its humungous store area, Walmart has enormous energy consumption. But, according to Walmart, only 5% of its carbon footprint comes from operations, and the remaining 95% comes from an intricate supply chain. Walmart's supply chain consists of 183 US and 221 international distribution centers. The company focuses on reducing supplier carbon footprint through initiatives such as supplier engagement and measurement programs and involves diverse suppliers in its value chain. This strategy helps the company address both environmental and social aspects of sustainability.
Rothy's – Owning the Responsibility
Rothy's, unlike Ikea and Walmart, is smaller and has a distinct approach to sustainability. Rothy's is a vertically integrated company, and most of the materials it uses are sustainable. Ownership of its supply chain allows Rothy's to produce materials such as algae-based foam, natural rubber, and marine plastic according to the demand, resulting in lower waste generation. The company has set a goal for 2023 to achieve a completely circular product life cycle, which means the products made from sustainable materials will also have an end-of-wear solution. It can help Rothy’s further reduce the carbon footprint of the products’ life cycle use.
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