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Finding the Win-Win with Retailer Sustainability Mandates

Retailers are not known or viewed as bastions of responsible, sustainable practices. Excluding leaders like Whole Foods and Patagonia, retailers are often blamed for the world’s problems – big-box retailers get grief for employment practices, grocers take heat for inefficient stores and rampant plastic bags and restaurants are scrutinized for food waste. Because the retail industry is such a resource-intensive business with complex process chains, accountability gets lost in the shuffle and the public begrudges retailers for their seeming lack of sustainability. Retailers are reacting by leading sustainability efforts with their suppliers in the form of mandates and requirements.

As a supplier to retail, manufacturers and distributors must learn to operate within the expectations of their retail customers. However, this does not need to be a one-way street, and suppliers can and should influence their retail customers through their own expectations, behaviors, and actions. Given a lack of clear industry standards in the emerging arena of sustainability, it is not always easy for suppliers to determine the best course of action and negotiate the most optimal outcomes with their retail customers.

If a supplier is asked to comply with a certain set of standards by their biggest customer, what is the right course of action? Realistically, the supplier will need to adhere to the customer’s demands in order to stay in business. Conversely, if a retailer that provides less business to a supplier was to approach a supplier with these kinds of standards, the supplier may be less motivated to make the necessary business changes. Consequently, the retailer may have put themselves in a position to lose the supplier.

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Tags: Operational Excellence