[{"@context":"http:\/\/schema.org","@type":"Article","@id":"https:\/\/www.the-future-of-commerce.com\/2019\/06\/11\/sustainability-in-retail\/#Article","articleBody":"Customers don\u2019t like to be disappointed, and they aren\u2019t shy about telling others when their expectations aren\u2019t met. To avoid one of the more common \u2013 and potentially disappointing \u2013 customer experiences, retailers should do everything they can to prevent the dreaded \u201cout-of-stock\u201d situation. How does this concept fit in with the demand for sustainability in retail that consumers are demanding?\nThis pressure is exacerbated by a perception amongst shoppers that the likes of Amazon are rarely out of stock. Whilst not factually correct (estimates are that Amazon is out of stock at similar rates to other retailers), physical and e-commerce retailers do need to combat that perception by keeping in-stock rates as high as possible to remain competitive.\nOn the other hand, what happens to product that isn\u2019t sold? How are retailers disposing stock that remains unsold, despite discounting?\nCustomers don\u2019t like seeing \u201cout of stock,\u201d but also dislike unethical and unsustainable retail practices. Good retailers avoid both.\nThe environmental and ethical impact of overstocking is often considered as an afterthought, if at all. And with consumers being more conscious than ever, that\u2019s a whole added risk.\nAside from the damaging environmental impact of creating more waste, this also puts pressure on manufacturers to produce more at a faster rate and with fewer resources, resulting in subpar standards when it comes to ethical and sustainable production.\nSustainability issues in the supply chain are an increasingly important consideration in shopper purchasing decisions. There is now an active war on\u00a0waste, one resulting in a series of efforts to re-distribute leftover products to where they are needed.\nNew ways to recycle and reuse products are being developed throughout the industry \u2014 including among retailers \u2014 to reduce what goes into landfills.\nFor example, Australian surfing brand Ripcurl allows shoppers to return old wetsuits in some of their stores so they can be recycled. At the same time H&M and some of their peers are calling for customers to bring in their unwanted old clothing in exchange for vouchers, with a plan of recycling the discarded textiles.\nEnding overstocking is crucial to sustainability in retail\nOverstocking is not only an environmental problem, but a financial one as well. According to a study conducted by IHL Group, overstocks contributed $471.9 billion in lost revenues globally last year, up 30% from three years prior.\nThis creates a challenge for retailers: Customers don\u2019t like to be disappointed, so all care is taken to make sure stores are well-stocked. However, retailers must try to find a balance without over-stocking if there\u2019s ever a hope of achieving sustainability in retail.\nDespite the attention shoppers pay to the issue of sustainability, overstocks persist, and never-ending markdown cycles continue industry-wide. There are also introductory offers, mid-season sales, end-of-season sales, and dotted in between those are \u201cfrenzy days,\u201d like Black Friday.\nCombine these markdowns with the processes used by some retailers to dispose of the unsaleable merchandise, like Burberry\u2019s much talked about destruction of goods, and H&M\u2019s \u201cpile of unsold stock\u201d that was directly connected to poor inventory management, and the impact is clearly in need of a solution.\nHow to solve overstocking while being both sustainable and CX-focused\nThe primary culprits of the overstock and sustainability in retail issues have been around almost since the beginning of retail itself.\nThese include:\n1.) Customers expect retailers won\u2019t run out of stock.\u00a0In today\u2019s competitive environment, disappointed customers don\u2019t have to look far to take their wallet elsewhere, and they\u2019re doing so more than ever.\n2.) Product data siloes. When stock isn\u2019t consolidated in one inventory system, it can\u2019t be re-distributed to go where it\u2019s needed. This inevitably leads to situations where the retailer can\u2019t fulfill a customer\u2019s expectations. Meanwhile, when the store in the next suburb has too much of the same product, it\u2019s marked down.\n3.) Not all stock is visible online. If online customers can only access all \u201conline inventory\u201d they will more often experience out of stock notices.\n4.) Orders can\u2019t be fulfilled from certain areas. If a customer orders an item but it is only available in one particular store, that store needs to be able to fulfill that order from another location or the sale is lost.\nTo solve the overstock issue, as well as the issues of decreased sustainability in production and increased waste, a single version of inventory that is always available and automatically updated is needed.\nSustainable retail depends on managing inventory\nOne source of inventory allows stock to be managed more carefully, saving sales and meeting customers\u2019 expectations, while eliminating waste and limiting markdowns (think endless aisle), and today there is technology that can help maximize the potential of inventory.\nAdding more fulfillment options and locations means orders can be made and delivered via any channel, anywhere. Finally, collecting data on all orders with fulfillment locations, demand, and stock movement gives retailers invaluable insight to avoid overproduction.\nUsing new order management technology for example, the Glue Store, a youth-oriented Australian fashion retailer, has tripled the inventory they can access, and has much more flexibility to fulfill orders. The new system automatically balances inventory, so products go to the stores where customers are demanding them, avoiding stores carrying too much stock.\nMost overstock issues can be addressed quickly and easily with a real-time, global view of inventory availability coupled with the ability to move stock around depending on demand. This means that every sale can be fulfilled while significantly reducing the need to carry excessive stock that would either be marked down or sent to a landfill.\nShifting retail landscapes. Varying buying behavior. What makes people click \u201cbuy\u201d? We\u2019ve got the answers HERE.","author":{"@type":"Person","@id":"https:\/\/www.the-future-of-commerce.com\/2019\/06\/11\/sustainability-in-retail\/#Article_Person","image":{"@type":"ImageObject","@id":"https:\/\/www.the-future-of-commerce.com\/2019\/06\/11\/sustainability-in-retail\/#Article_Person_ImageObject","url":"https:\/\/23x6xj3o92m9361dbu2ij362-wpengine.netdna-ssl.com\/wp-content\/uploads\/2019\/06\/FLR244-Vroni-Square-FC-150x150.jpg"},"name":"Veronika Birnkammer","sameAs":"https:\/\/au.linkedin.com\/in\/veronika-birnkammer-0a9b471b","url":"https:\/\/www.the-future-of-commerce.com\/contributor\/veronika-birnkammer\/"},"dateModified":"2021-06-15T16:07:53+00:00","datePublished":"2019-06-11T13:45:00+00:00","description":"Sustainability in retail is an increasingly important consideration in purchasing decisions. Balancing CX and inventory is changing the future of retail.","headline":"How sustainability in retail is changing the future of commerce","image":{"@type":"ImageObject","@id":"https:\/\/www.the-future-of-commerce.com\/2019\/06\/11\/sustainability-in-retail\/#Article_ImageObject","height":"630","url":"https:\/\/www.the-future-of-commerce.com\/wp-content\/uploads\/2019\/06\/thumbnail-d16e1bf78f202695544faebc6c9abfad-1200x630.jpeg","width":"1200"},"mainEntityOfPage":"https:\/\/www.the-future-of-commerce.com\/2019\/06\/11\/sustainability-in-retail\/","name":"How sustainability in retail is changing the future of commerce","publisher":{"@type":"Organization","@id":"https:\/\/www.the-future-of-commerce.com\/","additionalType":"https:\/\/www.wikidata.org\/wiki\/Q1193236","description":"Relevant, timely information & analysis on commerce trends, both consumer-facing and B2B.","logo":{"@type":"ImageObject","@id":"https:\/\/23x6xj3o92m9361dbu2ij362-wpengine.netdna-ssl.com\/wp-content\/themes\/hybris_foc\/assets\/images\/layout\/logo-new-2x.png?_=1","height":"96","url":"https:\/\/23x6xj3o92m9361dbu2ij362-wpengine.netdna-ssl.com\/wp-content\/themes\/hybris_foc\/assets\/images\/layout\/logo-new-2x.png?_=1","width":"500"},"name":"The Future of Customer Engagement and Experience","sameAs":["https:\/\/podcasts.apple.com\/us\/podcast\/a-call-for-a-better-experience\/id1479742201","https:\/\/twitter.com\/FutureOfCEC","https:\/\/www.linkedin.com\/groups\/4844282","https:\/\/www.the-future-of-commerce.com\/feed\/"],"url":"https:\/\/www.the-future-of-commerce.com\/"},"url":"https:\/\/www.the-future-of-commerce.com\/2019\/06\/11\/sustainability-in-retail\/#Article"},{"@context":"https:\/\/schema.org\/","@type":"BreadcrumbList","itemListElement":[{"@type":"ListItem","position":1,"name":"2019","item":"https:\/\/www.the-future-of-commerce.com\/2019\/#breadcrumbitem"},{"@type":"ListItem","position":2,"name":"06","item":"https:\/\/www.the-future-of-commerce.com\/2019\/\/06\/#breadcrumbitem"},{"@type":"ListItem","position":3,"name":"11","item":"https:\/\/www.the-future-of-commerce.com\/2019\/\/06\/\/11\/#breadcrumbitem"},{"@type":"ListItem","position":4,"name":"How sustainability in retail is changing the future of commerce","item":"https:\/\/www.the-future-of-commerce.com\/2019\/06\/11\/sustainability-in-retail\/#breadcrumbitem"}]}]