Book Review - Greentailing and other Revolutions in Retail

Innovation Book Review: "Greentailing and other Revolutions in Retail"

By Neil Z. Stern & Willard N. Ander 2008
Wiley 241 pages $49.95

The authors of 'Greentailing' ('green retailing') have many years of U.S. retailing experience through their consultancies, seminar work and clients such as McDonalds, Proctor & Gamble, BP and many others. By helping retail businesses with improvement strategies, Stern and Ander have a broad knowledge of successful and not-so-successful examples to draw on in this book. Companies from traditional 'bricks & mortar' stores, on-line retailers, product suppliers, shopping centre owners, direct and multi-channel retailers and consumer groups are presented in this large collection of green innovative strategies to meet the needs of today's environmentally-aware consumer.

Having a career in the Australian retail industry, I was drawn to this book to learn how climate change will impact on businesses and consumer behaviour and what the best companies are doing to improve their green credentials while reducing their own carbon footprint. Many Australians have changed their habits through recycling, reducing water consumption and using alternative energy like solar power. However, this U.S. based book was an eye-opener to me on the cultural differences between our country and the States regarding climate change. From a range of consumer and business surveys, Stern and Ander deliver a snapshot of U.S. attitudes towards the environment that shows 40% of Americans are not interested in the environment at all with low prices being the main driver of consumer behaviour. Many U.S. companies also see 'greentailing' as a consumer trend rather than an important environmental and economic change to business and society. The concept of climate change itself is not really supported, I feel, by the authors in this book as they move from sitting-on-the-fence about the environment to promoting the various excellent green innovations in U.S. retailing to their core reader audience - American retail business management.

The book 'Greentailing' is, therefore, not about improving U.S. retail companies just for the benefit of the environment but to show businesses how to promote their company/brand as green, attract new customers and grow profits without cutting prices or doing further damage to the environment. The authors do acknowledge the dilema faced by retailers to serve their shareholders first (increase sales and profits) while trying to do what is right in a world that is growing more concerned about the impact of consumerism. So Stern and Ander try to juggle both responsibilities by giving some very good examples of 'greentailing' by big and small U.S. businesses (eg. Wal-Mart's '21st Century Leadership', Office Depot's 'The Green Book', Whole Foods' 'Reduce, Re-use, Recycle' motto since 1980). Other strategies include store internal efficiencies (L.E.E.D.), the rise of ethical purchasing (Nike), recycling (Interface Flooring), various environmentally-friendly products and initiatives and local produce sourcing. There are many positive points in this book that can be easily picked up by a retailer/business looking to benefit from 'greentailing' through reducing energy costs or re-designing stores while attracting customers with new innovative products that use less harmful chemicals or promoting better corporate social responsibility policies at home and around the world.

Apart from greentailing strategies, the book also provides information on the changing demographics of the U.S. consumer and how companies can meet their needs in the future. Such retailing trends include the change from 'do-it-yourself' to 'do-it-for-me' services, selling services rather than just products (home theatre installations not just TV sales), the creation of the medical super-store (a doctor, chemist, optomatrist and X-ray under one roof), the merging of financial banking, insurance, pension/superannuation and wealth management and the rise of brands creating their own retailers (Apple and Sony). The Internet and non-store retailing is another innovation that continues to grow globally to over $300 billion sales annually. Once seen as a bolt-on strategy, the Internet will continue to change the way people purchase, communicate and live while helping businesses to gather information on consumers and competitors, improving business efficiencies and grow sales.

Overall, 'Greentailing and other Revolutions in Retail' is a good account of the current state of U.S. retailing, the future trends in consumer behaviour and the growing impact of the environment in the minds of customers, retailers, government and society in general. I found many examples of innovations and initiatives that may not yet exist in Australia so I would recommend this book to small and large businesses looking to improve their own green credentials and advantage over competitors in the short-to-medium term. I hope the next book from Stern and Ander offers more information to retailers/suppliers of the longer-term impacts on business in ignoring climate change rather than trying to financially benefit from it.

Dale Stohr
Chisholm Cranbourne.

Innovative Thinker Stage #1 Dale Stohr

Stage #1:

Who: Alan Tran

What they do: Director of CentreCom (a chain of retail I.T. stores around Melbourne) and opened the Frankston store in 2004. Over 10 years experience with CentreCom including customer service, sales, buying and warehousing.

Why: Having worked the past twelve months at CentreCom Frankston, I found Alan to be very open to new ideas to improve his business. His strong work ethic and focus on giving his clients the best I.T. solutions to meet their needs is impressive. He is always up-to-date on the latest I.T products via his relationships with suppliers that allows him to predict where the market is heading in each product category. With some I.T products having a very short shelf-life, this ability is very valuable and balancing inventory against future customer needs.

What I will learn: I am hoping to learn more about the CentreCom operations in order to create a new innovation that will be trialled within the business. Each I.T. retailer serves customers but the back-of-house operations can vary greatly from staff training to business systems to brand marketing. The Australian I.T. market is worth over $120 billion with CentreCom having a share of the Victorian consumer market with room to grow further. I have a few ideas to improve the store that I will present to Alan over the coming weeks.

Dale Stohr

Dale Stohr Innovation #1 HAUL 2009

Innovation Seminar #1 – HAUL Dale Stohr

A) What are innovation and creativity?

Innovation is a term for the implementation of a new or significantly improved product, process or method. There are different types of innovation including:

- Product innovation (eg. Apple’s iTunes)

- Process innovation (eg. PayPal payment system)

- Organisational innovation (eg. Paid parental leave)

- Marketing innovation (eg. Facebook social networking) (1)

Innovation leads to better products and services as well as new ways of living and working.

Creativity is the mental process of generating new ideas or concepts of originality. (2) Creativity is also the act of making something new, doing something that has never been done before or a process-of-elimination of many ideas to find the one right idea.

Creativity is the new idea while innovation is the application of that idea in business, design, science, education, marketing and other industries.

B) What conditions need to exist for innovation to occur?

Innovation can be brought about through a variety of conditions/situations such as:

- Needing to increase profits (3) (eg. Cadbury chocolate reducing milk content)

- Responding to customer needs (eg. New Toyota Hybrid car)

- Increasing market share (eg. ANZ to increase Business Banking share)

- Cost impacts (eg. Commodity price rises)

- Market changes (eg. Real Insurance ‘Pay As You Drive’ product)

- New technology (eg. Boeing 787 Dreamliner design technology)

- Government policy changes (eg. LPG car gas rebates)

- Globalisation (eg. China Construction Bank in Australia)

- Brand/organisation re-launch (eg. Country Road loyalty program)

‘Necessity is the mother of invention’ is an old adage that still applies today. So as a need arises, or is forced, then innovation is required to help deal with the situation. Lack of innovation can lead to business failure while some old products/services can continue to grow without innovation (eg. a simple hammer).

C) How is HAUL innovative?

HAUL is an innovative company for manufacturing consumer goods from recycled waste products and creating pieces of contemporary art. The product range at HAUL includes bags, wallets, laptop sleeves, backpacks and more that make HAUL customers feel special and exclusive. By using one-off vinyl advertising billboards to make limited runs of products, HAUL manufacturers goods that can not be replaced – each messenger bag is individual and rare. Other businesses have recycled waste to produce cardboard boxes, road materials, plastic pots, insulation and even cat litter. (4) But not many recycled products have become as street-credible as HAUL products. The reduction in landfill waste and ‘green’ credentials are a positive by-product of HAUL’s innovation. HAUL also use this method to innovate in other markets such as ‘Riveting’ for corporate clients and grow the business the further.

D) What did you learn from Scott Kilmartin’s approach to business that you can apply in your workplace? Why?

Scott’s ability to continue looking for ways to grow his business (recycling waste vinyl billboard and number plates) or meet the needs of his customers (urban designers, Mac fans, etc) is a real attribute that can be used in other businesses. Scott said he kept thinking about the business and the way it worked so that he could make it a better operation. The use of social media to communicate to his customers and receive feedback is another aspect of Scott’s approach that can be implemented elsewhere with some proper research – not all Facebook or Twitter users are the same. HAUL has a credibility that is seen in its product as well as its people that is not always easy to emulate. CentreCom (a Melbourne-based retail I.T. chain of stores) could certainly benefit from learning about HAUL and Scott’s experience in building the business and the tenacity required to grow a successful brand.

E) What will you do differently in your workplace, if anything? Give an example or explain why implementation cannot occur.

The successful marketing of HAUL through social media (like Twitter and Facebook) and the on-line retail presence of HAUL.com.au has the potential to be successful for other retailers in Australia. Communicating to potential customers in Australia and around the world can lead to great sales opportunities if implemented successfully – the goal is to easily give customers what they want. However, not all Australian retailers have the vision that Scott has to grow their business on-line like HAUL. Working with CentreCom, who have a bricks-and-mortar retail chain around Melbourne as well as an on-line store centrecom.com.au, I believe that further commitment would be required before social media would be seen as necessary for CentreCom. CentreCom’s directors and shareholders have a strong connection to the simple retailing concept of buying cheap and selling for a profit – the customer can take it or leave it. The small margins in the competitive consumer I.T. category mean staffing, time and investment is limited within CentreCom but the unseen opportunities to grow the brand and attract new loyal customers should not be ignored. Maybe, like a lot of companies, Australian retailers are waiting for somebody to do it right first before investing in social media. By then, CentreCom may be up against a competitor that has already taken its customers.

References:

(1) ‘Innovation in Australian Business’ 29/5/2009 www.inovation.gov.au

(2) ‘Creativity’ http://en.wikipedia.org/wiki/Creativity

(3) ‘Innovation in Australian Business’ 29/5/2009 www.innovation.gov.au

(4) ‘Environmental purchasing checklist’ 17/4/2007 www.environment.gov.au