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Competitive Advantage Drives Green Retail Efforts

Posted: September 3, 2008

Green retail initiatives are a win-win for retailers, helping to reduce operating costs and earn customer loyalty, according to a new survey of 100 industry executives.

The survey from Aberdeen, a market research firm, identifies the top five drivers of sustainability programs within the retail industry. First and foremost, say retailers, is the desire for competitive advantage (57%), followed by the need to control rising energy costs (38%), the need to improve brand value and equity (34%), and the need for innovation (31%), and pressure to comply with companywide mandates for environmental performance (30%).

Best-in-class retailers are enjoying a range of benefits, according to the report, posting revenue growth while also seeing bottom-line cost savings and increased customer loyalty. In fact, best-in-class retailers are currently achieving:

  • a 20% decrease in energy costs
  • an 8% decrease in their logistics and transport costs
  • a decrease of 5% in merchandise costs
  • significant improvements in customer loyalty, measured by improved rates of customer acquisition (+17%) and customer retention

How to achieve such best-in-class results? "Sustainability is as much about change in organizational culture as it is about process transformation," says Aberdeen's Jhana Senxian, who authored the report. "Accordingly, vision, leadership, education, and communication are as important as processes and technology. To be successful, companies must be visionary, holistic and quantitative in approach."

From Sustainable Life Media