Skip to main content
Skip to footer
We're taking you to another TCS website now.

The biggest questions need the boldest answers. That’s why we’re using our global scale, technology expertise and collaborative spirit to move towards a better today and a brighter tomorrow together.

The retail sector embraces sustainable practices stemming from a drive to increase efficiencies, align with business values and meet shifting consumer expectations; sustainability is a core pillar of business practices in 2021. According to GlobalWebIndex data, 6 out of 10 millennials would pay more for ecological and sustainable products, so would 58% of Generation Z (aged 16–21). In essence, consumers respond to retail companies that hold sustainable products and practices at the core of their business.

Sovon Thakur, Head of Retail, CPG, Travel & Transportation at TCS ANZ, explores how sustainable practices are transforming the retail industry in Australia and what we can expect to see next. TCS has embraced sustainable practices with a plan to leverage renewable energy and digital technology to achieve net zero emissions by 2030. 

Posted: June 2021

 

Q: What is driving sustainability in the retail sector?

The retail industry is embracing sustainability holistically and at all levels. The key priorities for businesses are social responsibility inclusive of sustainability, cost efficiency and customer mindshare. In Australia, retailers are fast outpacing other industries in embracing sustainable products, supply chains and practices. With 90% of Australian consumers and businesses concerned with environmental sustainability, this is no passing trend. 

Retailers aren’t only concerned with retaining and attracting customers but also talent they attract since 70% of Australians aged 22–30 stated a strong preference or desire to work for a company that promotes environmentally sustainable practices. In fact, why employees, all stakeholders within the retail industry consider sustainability a top priority – shareholders, customers, lenders, regulators and employees. So, any retailer that wants to stay relevant in the future should think about sustainable behaviour. 

Q: What are retailers, supermarkets in particular, doing to drive sustainable practices? 

Worth over USD 126 billion, the supermarket sector in Australia is improving its commitment to its environmental footprint, providing customers with access to more sustainable alternatives, in-store recycling, ethical sourcing and company-wide sustainability practices. 

This commitment to sustainability and industry growth is contingent upon significant rethinking around new product development encompassing sustainable sourcing, packaging and supply chain, advanced manufacturing and digital technologies to boost competitiveness, agility and resilience. This requires investment and redesign of processes. Retailers are investing in sustainability endeavours. For example, our local leader Woolworths is committing to be net carbon positive by 2050. In the shorter term, 100% of Woolworths’ own-brand packaging will also be recyclable, reusable or compostable by 2023. On the other hand, Coles has committed to 100% renewable electricity and set a course to net zero greenhouse gas emissions built around the concept of working “Together to Zero”.

Q: What are the barriers for supermarkets in becoming more sustainable?

Often seen as a lofty long-term goal, sustainability is here and now. In practical terms, businesses need clear strategy and actionable steps that they can accomplish successfully without impacting commercial KPIs. Global best practices and locally relevant insights are the two pillars that supermarkets have to bank up on to achieve the above. 

In Australia, one significant challenge for the supermarket sector is distance. ‘Food miles’ refers to the distance travelled by food products between production and consumption. Beyond the distance, the use of extensive trucking and air freight networks needed to transport food around the country creates significant greenhouse gas emissions. Investment in electric vehicles is just one pathway. However, the shift towards more sustainable transportation will not be a quick fix.

Q: What do you see as the most significant investments retail businesses will be making in sustainable practices in the next five years? 

Technology is a fundamental component of sustainable businesses. For example, digital solutions enable retailers to monitor, track and learn from their entire supply chain. In the next five years, we expect to see more significant investments in solar and batteries to power stores, IoT devices, innovation in recycling and making supply chains greener. The potential for technology to contribute to solving environmental issues is vast. Innovation in data generation and analytics, alongside artificial intelligence, advanced robotics, advanced manufacturing and cloud computing, is opening up possibilities for the industry to impact their entire ecosystem positively in terms of sustainability.