Retail Innovation - Green Tailing - Coursework Example

?Running head: GREEN TAILING (RETAIL INNOVATION) Green Tailing (Retail Innovation) Insert Insert Insert 08 November 2011 Green Tailing (Retail Innovation) Introduction Green tailing is one of the major revolutions that is taking place in our retail market place, with emphasis on influential green trend in retailing business. Green tailing capitalizes on the huge demand for organic, sustainable, and wellness-related products. Through its evolution, it will force both the suppliers and retailers to take notice of its impact. Indeed, leading green retailers such as Whole Foods and Wal-Mart are continuing to grow and innovate at high rates than the traditional competitors, thus they are forcing the competitors to respond with innovative solutions. Green tailing also focuses on achieving low cost the customers, thus, they are able to achieve greater savings. However, innovations in green tailing focus not only on price, but also on exploiting fashion, providing outstanding services, offering expanded range of products, and selling high quality merchandise (Stern & Ander, 2008). Since some retailers lose while others win, all retailers must adapt to -Est Theory. The –Est theory states that a retailer must be the best by being superior to all others at one core proposition that is important to specific customers. Most green retailers achieve this through communicating their -Est position to the customers, executing it relentlessly at the store level and orienting their staff to that position. Additionally, their day-to-day operational decisions and strategies are based on that position. The world of retailing is changing faster and more dramatically than ever before, hence, it is always advantageous for a retailer or supplier who gets to that position first. Before, most green retails’ life cycles looked like a typical bell curve. There is a period of development for an emerging concept, followed by a period of rapid growth, then maturity as the curve flattens, and then eventually there is a decline (Stern & Ander, 2008). That cycle still exists but of late, it has been significantly compressed as new retail concepts grow, mature, and decline faster than ever. Faced with this challenge, there have been more mergers than before in attempts to consolidate retail power among the few retail companies. In essence, green tailing is a crucial element of the future of retail. Therefore, it holds the key to understanding a seismic shift in consumer behavior that shifts the balance away from price to other factors that will require businesses to rethink their basic models. Types of green retail stores There are various types of stores that are considered as environmental friendly, which sell green products. Consumers have now become more enlightened; most are beginning to look for sustainable, green, and organic products (Radcliff, 2011). Hence, they are looking for stores and suppliers who embrace eco-friendly methods and green aspects in their operations. These stores include Clothing and Apparel that sell clothing products from sustainable organic materials such as bamboo fiber, hemp, cotton and other recycled fabrics. There is also increased demand for peace silk or vegan silk that is extracted from hatched silkworm castings; hence, no silkworms are harmed in the extraction. Additionally, eco-friendly clothing is made with natural and organic dyes in accordance with green specifications. Secondly, there are green furniture stores that sell furniture made from natural materials such as teak wood, bamboo, natural fibers and reclaimed sustainable materials. More so, in finishing, this furniture use natural dyes, water and soya-based finishes, natural oils and waxes (Radcliff, 2011). Thirdly, there are organic foods grown through strict observance of green principles without use of any artificial chemicals and fertilizers. Lastly, there are personal care and household cleaning products that are made from natural and organic ingredients that are raised up with adherence to green principles without use of harmful chemical and fertilizers. These products can include shampoos, lotions, personal care soaps, and green household cleaning products. Green tailing significant changes in the retail environment Green tailing has been revolutionizing the retail market in the following major ways. The first involves changing consumer behavior thereby impacting on the retailer’s product strategies. Retailers have the task of identifying the changes in time and translating them into new product concepts and then designing new shelf displays and shop layouts. The retailers are therefore required to rapidly tailor their product assortment to ever more specific and smaller target groups. Consequently, there is a wider variety of products and an increased complexity with regard to managing the incoming and out-going goods flow. The second involves concentration, especially in retail and food manufacturing based on globalization of competition and concentration through mergers and acquisitions. Studies predict that in future, there will be fewer and fewer suppliers of food products; hence, retail ventures will be dealing mainly with a few large manufacturers. To achieve cost reduction and operational efficiencies relentlessly, this will lead to greater integration of operational activities between the partners involved. Thirdly, international cooperation due to concentration of power on suppliers’ side makes many companies to diligently search for possibilities with which to counterbalance this development (Man, 2008, p.850). Though it is difficult to achieve internationalization of retail organizations, it still remains a viable solution. Fourthly, more retail companies are embracing private labels to support retailer’s identity and the quality of the brand. Through private labels, the retailer is able to enhance promotion and advantage of a higher margin. To maintain the margin, the retailers are required to develop highly integrated operation systems with the suppliers. More so, space management is essential since the shelf-space is limited while there is existence of extensive product lines offered by manufacturers. Thus, the retailer may use computerized space management systems that enable simulation of several display layouts based on detailed cost information to decide on the most profitable layout. Additionally, there are greening issues that emphasize on ecological considerations. These include promotion of natural products, and use of biodegradable packaging materials. The retailers therefore can improve their brand image by offering a wide range of green products. Lastly, retailers can use information technology to effect new supply chain concepts and supporting advanced costing systems. Technology also supports aspects such as electronic banking, bar coding and teleshopping. Overall, these changes lead to commoditization of retail products. Green tailing therefore leads to entry of hyper-efficient retailers into the global grocery and other retail markets, thereby transforming how retailers compete in the new age. Benefits of green tailing Green tailing is one of the emerging market trends that have significantly revolutionized the power of our economy and trade. Being a noble undertaking, green tailing is helping homes and businesses to waste less energy, save resources, prevent pollution, stimulate economic growth, and fight climate change (Croston, 2009). Green tailing therefore has revolutionized businesses by affecting the way we live and work towards establishing balance of living well today and creating sustainable atmosphere for the future generations to live well tomorrow. With the new understanding that environmentally responsible retailing is not just a competitive advantage but also a platform through which businesses can leverage it’s operational effectiveness, as it changes performance and strategies in key cost areas like energy consumption, transportation, packaging and waste disposal (Ogden-Barnes, 2007). Moreover, green tailing confers the following benefits to businesses: first, green initiatives focus on wasting less and saving money, thus it orients the economy towards sustainable growth. Secondly, green tailing enables customers and other stakeholders to put pressure on businesses to be more environmental friendly. Thirdly, by going green, a business can attract and retain top talents who are more about the mission of the business, hence reducing turnover and saving on cost (Croston, 2009). Fourthly, green tailing increases business productivity, drives innovation, and sets new challenges for the business to meet and conquer creatively. Fifthly, green tailing reduces the risks a business can incur from impact of climate change, legislative changes, increased utility costs, and changing markets (Stern & Ander, 2008). For example, Wal-Mart in the U.S. has embraced environmental responsibility, investing in development of high tech truck fleet, opening energy efficient pilot stores, switching to more efficient LED lighting in key store locations and engaging suppliers in key environmental performance measures (Ogden-Barnes, 2007). These measures significantly saved the company on costs and various risks. Sixth, green tailing, being a retail innovation, is increasing business opportunities, since more customers and businesses are asking for green products and services; hence, more businesses will emerge to satisfy the new demand. Additionally, governments of many countries offer mandates and incentives for businesses and consumers who are geared towards working and living sustainably in an environment friendly set up. Thus, by embracing green tailing principles, a business stands to gain much from government’s goodwill, incentives, and better corporate image. Lastly, green tailing can be a powerful source of a message that tells about the business thereby increasing the visibility of the company’s products. Through green tailing, retailers from various fields are proactively working to improve their environmental performance, and reduce the impacts of their activities on the climate. In essence, retailers are also discovering that environmental responsibility and sustainable retailing is not just a competitive tool, but it is a smart way of reducing operating costs and improving business efficiency. Challenges facing green tailing Green tailing, being rather a new retail innovation, is facing several challenges and uncertainties of the future. First, the limits of the natural world could constrain business operations, realign markets, and threaten the planet’s overall well-being. Secondly, companies are facing a growing spectrum of stakeholders who are concerned about the environment. For example, issues such as global warming, resource constraints, ozone layer depletion, water scarcity, extinction of species, growing signs of toxic chemicals in flora and fauna among many other issues are increasingly affecting how companies and society function (Esty & Winston, 2009). This means that only retailers who best meet and find solutions to these challenges are more competitive. Thirdly, the current global economic times are placing more demand on retailers to cut costs and meet green commitments. Fourthly, consumers are also placing more demands on retailers and corporations to become more socially and environmentally responsible. Additionally, with advances in technology due to concepts such online shopping and e-commerce, retailers are being forced to become more creative and come up with solutions and enhance better displays for their products. Lastly, though green tailing presents a very real opportunity for retailers in virtually all aspects of their business, it is still a relatively new trend, thus it lacks the benefit of compelling most industry specific statistics or case studies to back it up. Conclusion Currently, most of retailers in all sizes and performance levels are more interested in adapting greening principles in their practices across the whole enterprise so that they can achieve greater efficiency and improve their corporate image to the increasingly interested customers. Traditional businesses mainly focused on accumulating profits by tracking how money flowed in and out of business, without evaluating the impact of their businesses on the environment around them. However, most green businesses today are evaluating their business performance not only in terms of profit, but also on people they serve and the environmental impact. Hence, business is evaluated in terms of performance and business success, rather than the money bottom-line alone. Green tailing has a long way to reach its peak; thus, global community has to focus on pollution legislation, waste-reduction mandates, water conservation, energy efficiency, and improved building standards in effort to set stage for the long-term growth of green businesses. Provided consumers will continue to demand for environment friendly products and services, the retailer stores will always find a place in our society with increased accessibility and publicity. In summation, green tailing is a noble idea for the future, since it is always good to use, both economically and environmentally. References Croston, G., (2009). Starting green: an ecopreneur's toolkit for starting a green business from business plan to profits. NY: Entrepreneur Press. Esty, D.C. & Winston, A.S., (2009). Green to gold: how smart companies use environmental strategy to innovate, create value, and build competitive advantage. NJ: John Wiley & Sons, Inc Man, A.P., (2008). Knowledge management and innovation in networks. Massachusetts: Edward Elgar Publishing Limited. Ogden-Barnes, S. (2007).Retail Therapy: Sustainable retailing gets the green light. The Australian Centre for Retail Studies, MONASH University. Radcliff, M. (2011). Eco-Friendly Retail Stores. Retrieved from http://greenliving.lovetoknow.com/Eco-friendly_Retail_Stores Stern, N.Z., & Ander, W.N., (2008). Greentailing and other revolutions in retail: hot ideas that are grabbing customers’ attention and raising profits. NJ: John Wiley & Sons Inc. Read More