Supply chains must improve sustainability to appeal to all generations
Sustainability is increasingly important to shoppers, from Baby Boomers to Gen X to Gen Z. For supply chain professionals to ensure that their business’s products appeal to consumers, sustainability needs to be paramount.
Establishing sustainable operations in supply chain is often justified for both brand protection and avoidance of regulatory fines. Examples of bad actors in this field from the past decade include incidents of questionable labor practices in big tech supply chain and poor environmental choices in consumer goods supply chains. Now, the voice of the consumer forces companies to consider the costs and actions of a sustainable supply chain to be a competitive differentiator rather than merely crisis avoidance.
I recently found myself on the hunt for a new printer with some urgency, with tax season upon me. I started by looking for one at local retail stores. Although the shopping experience was dominated by persistent stock-outs of major brands at major retailers, between my phone and available shelf information, I was able to determine that some brands differentiated with more environmentally friendly approaches to ink sourcing and recycling. Ultimately, this influenced my buying decision.
According to surveys such as this one from First Insight and the Baker Retailing Center at the Wharton School, consumer trends are steadily shifting more favorably toward products showing efforts of sustainable sourcing, production, and recycling. Although true of many consumers, this buyer survey shows that Gen X has a particular willingness to spend more for sustainable features.
In fact, this Forbes article states that nearly 90% of Gen X shoppers expressed a willingness to buy sustainable products, up from 34% just two years ago. The article also shares the existence of a disconnect between retail industry leader perspectives and consumers, specifically the industry leadership view that brand matters more than environmentally forward features. Plus, it sheds light on Gen Z’s predicted growing sustainability interests as they enter the workforce.
Supply chain practitioners considering how to adapt to these changing trends should focus on evolving sustainability into being less of a cost-center activity (regulatory reporting, for example) and toward incorporating sustainability into their supply chains. It’s time to align the information flow with sales and marketing efforts. Operationally, this is in the wheelhouse of mature, well-run supply chains.
The key capabilities of sustainability-forward supply chains include:
- Strength and flexibility in supply chain network design
- Sustainability incorporated into the product life cycle planning process
- Integrated strategies for supplier influence and new program onboarding
- Identification of key sustainability goals, metrics, and implementation of continuous improvement programs to meet those goals
- Close collaboration and visibility across the end-to-end supply chain to manage information flow
Today’s and future generations will likely continue evaluating sustainability along with cost and function into their buying criteria when shopping. Leverage your supply chain capabilities today to incorporate sustainable procurement, manufacturing, and delivery into your products and messages to consumers.