material procurement

Sustainability: What Does it Take?

Sustainability: What Does it Take? 1440 428 ASG

Sustainability is mission-critical for retailers. Consumers demand it. Shareholders want it. The earth needs it. So why is it so hard to walk the walk?

There’s a common misperception among retailers that investing in sustainable building will be too costly to achieve any kind of ROI. Yet efforts to reduce carbon footprint, while perhaps more costly upfront, can be beneficial for retailers in the long run. While it takes effort to source products that are sustainable, using eco-friendly designs and recycled materials in retail locations are just two examples of ways brands are getting closer to sustainability goals.

As we’ve explained before, improving sustainability requires a willingness to do business differently. We’ll explore sustainable building in retail and what the future holds for this approach.

The Importance of Sustainable Building Practices in Retail

According to Microsoft, sustainability is a growing priority in retail and consumer packaged goods. Industry leaders, employees, investors, partners, and consumers who buy the goods care about sustainability.

  • 93% of CPG leaders spend more time on sustainability issues today than five years ago
  • 73% of Millennials prioritize sustainability over pricing
  • 55% of recent CPG market growth came from sustainability-marketed products

By implementing sustainable practices, retailers not only gain a competitive advantage with eco-conscious consumers but also reduce their carbon footprint.

Virtue Signaling vs. Environmental Commitment

Retailers who talk sustainability without verifiable actions raise doubts about their commitment. Virtue signaling – talking the talk without walking the walk – can instantly destroy a brand’s credibility. And even though there is a gap between what consumers say they expect and what they purchase, the intent for better sustainability is a growing trend among consumers and stakeholders. And with more legislation requiring specific commitments to sustainable practices, getting ahead of the curve can be cost-effective.

Sustainability Begins Before Building

As retailers refine their sustainability efforts, the first consideration is location. More than ever, sustainability includes answering the question, “How far do I expect my customers to travel to shop in my store?” The answer is often not as far as they used to. Smaller stores embedded in neighborhoods are a more sustainable alternative to larger stores that use more energy and require a longer trip to access.

What Steps Are Retailers Taking to Be More Sustainable?

There are a number of ways retailers can incorporate sustainability into buildings and materials—some might be easier and more cost-effective than you think.

Energy-Efficient Lighting
Energy-efficient lighting is one of the key components of sustainable building. It’s more than just LED lights, although that is an important component. LED lighting uses much less energy than traditional lighting and can last decades longer. However, other considerations can help with more sustainable lighting as well. Choosing to construct buildings in ways that take advantage of natural lighting can help save even more.

Efficient HVAC
Energy-efficient HVAC systems help significantly reduce energy consumption. While lower utility bills are the most obvious benefit of an efficient HVAC system, other benefits include better air quality and reduced health risks for employees and consumers.

Eco-Friendly Materials
IMM-Cologne explores the use of sustainable materials in retail design in great depth. They suggest solutions from the circular economy:

  • Terazzo floor slabs, bricks, and recycled concrete produced from construction waste.
  • Recycled PVC or vinyl floor coverings.
  • Recycled clothing made into curtains, shelving, counters, and more.
  • Alternative construction materials such as hemp, rapidly regrowing bamboo, or recycled plastic.

IMM-Cologne makes the argument for the importance of pursuing sustainability:
“Rising energy costs, shortages of raw materials, the new awareness in society and the increasingly visible consequences of climate change call for a new way of thinking. This should ultimately benefit everybody: companies, people and, above all, the environment.”

Eco-Friendly Retail Design
Sustainable building can also include using eco-friendly designs like green roofs and walls. Green buildings reduce heating costs by adding insulation while also reducing the urban heat island effect. According to the University Corporation for Scientific Research on urban heat islands,

“Heat islands form as vegetation that is replaced by asphalt and concrete for roads, buildings, and other structures necessary to accommodate growing populations. These surfaces absorb—rather than reflect—the sun’s heat, causing surface temperatures and overall ambient temperatures to rise.”

When retailers incorporate green roofs and walls into their structures, they help reduce this effect.

The Benefits of Sustainable Retail for Businesses and Consumers
Sustainable retail practices are good for the environment, but they also provide measurable advantages for businesses that implement these practices and the consumers who support them. Sustainable building can save retailers money on energy and water bills while also allowing them to connect with consumers on a deeper level, earning more customer loyalty. Plus, consumers benefit from a healthier shopping experience in buildings with improved ventilation and natural lighting.

“Some people will say sustainability is an additional cost, but once they’re doing it, it becomes second nature and integrated into how they do business,” said Sabine Schlorke, global manager for manufacturing at the International Finance Corporation, a member of the World Bank Group, in an interview with PWC. “If you see it as part of your business, it’s not a cost; it’s an opportunity.”

A Consumer Shift

“I hope when the industry slows down (in a good way), we will be able to focus more on using the sustainable products of the future—fixtures, building materials, flooring, and even playing around with 3D printing to make small tables and stuff,” he says. “It’s the future. I hope we can use it to think bigger.”
– Andrew Miller, ASG procurement and materials manager.

Consumers are becoming more environmentally conscious, choosing products with sustainable packaging and shopping brands whose values match their own with regard to sustainable efforts. Retailers have been rushing to get ahead of pandemic-related supply chain struggles, but making efforts to implement sustainable building practices where feasible demonstrates that they are listening to their customers. The effort and transparency go a long way in building a strong brand reputation and earning customer loyalty.

Material Procurement: Tips from the Trenches

Material Procurement: Tips from the Trenches 1440 428 ASG

Economic uncertainty, supply-chain disruptions, and a shortage of skilled tradespeople. While it is undoubtedly a challenging time for the construction industry, Andrew Miller, our own procurement and materials manager, says that despite the known volatility, it’s business as usual for many retailers.

Although retailers are trying their hardest to move on, the impacts of COVID are still rattling consumers.  Political unrest, astronomical inflation, and slow lead times have made resources more difficult to secure. However, Andrew says despite a perceived economic slowdown and logistic challenges, many retailers are in post-COVID growth mode. “The majority want to go hard with designing, constructing, and opening stores.” Meanwhile, there are some brands that are taking more of a wait-and-see approach, he says.

Andrew’s expertise lies in both environmental design and materials sourcing, which gives him a solid understanding of all the forces at play when it comes to bringing a design project to life. From flooring to facades, Andrew and his team procure all the materials needed to build a modern store. We recently sat down with him for some insider insights about the current state of retail construction and some tips from the trenches for anyone considering a building project right now.

Tip 1: Keep Calm + Communicate

Other issues impacting materials right now include difficulty obtaining the ingredients used to make materials like powder coatings for fixtures. Even when materials are readily available, it can take an exceeding amount of time to get them to where they need to be, causing headaches for retailers, designers, and general contractors. Thankfully, Andrew says, continually communicating the situation with clients is key to their understanding of the challenges facing the building materials and construction industry today. ­­­­

“Prices have increased a great deal for materials. Even though we create a timeline, the project can run longer than anticipated because of delays and so forth,” says Andrew. “Following up and communicating regularly is key, not only with clients but also with suppliers and contractors.” The process can test even the calmest of procurement managers. “It can be challenging not to get frustrated. Clients have been understanding overall, but, like us, most clients are also very eager to get the project done.”

Tip 2: Tweak the Plan + Find Workarounds

Innovation often comes from working within restraints, and Andrew welcomes this kind of progress within his industry. By finding workarounds within the design, using alternative materials, and tweaking construction plans, Andrew finds answers to project problems that would otherwise cause delays.

“Sometimes there are answers. We can work within the design concept to choose materials that have a shorter lead time,” he says. When it comes down to it, if a timeline is at risk, another material may have to do. “We have to work around it and find another source. It’s all part of the gig. These times are challenging, and it helps us to think outside the box about other directions we can take. It’s important to stay nimble and adaptive to meet brands’ needs.”

Tip 3: Work Ahead

Andrew says that it helps to get as much construction done ahead of time in-house. “When we build on-site and in layers, it helps keep things on track,” he says. Working ahead as much as possible can be a critical timesaver. When necessary, utilizing layered construction practices allow the team to build onto what they have as materials become available.

Tip 4: Keep it Local

Nearshoring is the new buzzword when it comes to sourcing—and with good reason. The movement of sourcing closer to home shortens lead times, lowers costs, and reduces carbon emissions. We can expect to see new, closer, manufacturing hubs dedicated to meeting U.S. and European demand. A Business of Fashion annual survey of chief purchasing officers in North America indicates that more than 75% expect to increase the share of sourcing from Central America in 2023 and more than 35% expect to increase the share from Mexico.

Another trend Andrew welcomes is local sourcing. His team calls on local suppliers to obtain materials and get the work done more quickly rather than waiting for a shipment to come for them to get started. “Sourcing locally and working with local suppliers on our projects has helped us weather the storm,” Andrew says.

Tip 5: Work Only with Trusted Partners

There’s also another issue at play within the trades industry right now—they are just too busy. “Jobs in the trades are in high demand, and an issue is holding people accountable when they can’t manage their workload,” Andrew says. Another challenge is the amount of effort it takes to build a great experience. “That’s why it is critical to call on only the ones you have a trusted partnership and working relationships with—and trust to get things done correctly.”

Tip 6: Slow Down + Think Sustainably

“I would love to see more sustainable materials used, but really, we are all just moving very fast and trying to get the materials,” says Andrew. “Some clients really want to incorporate sustainability where they can—but it’s usually in flooring material or eco-friendly fabric, not so much with building materials.”

While his team has created fixtures made of engineered plywood and he sees clients using sustainable materials to craft their mannequins. “I hope when the industry slows down (in a good way), we will be able to focus more on using the sustainable products of the future—fixtures, building materials, flooring, and even playing around with 3D printing to make small tables and stuff,” he says. “It’s the future. I hope we can use it to think bigger.”

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