Green a Long-Term Branding Strategy for Retailers, According to RSR Research Report

May 7, 2008—Despite concerns that consumers aren’t yet putting their money on the table to support greener practices, retailers are investing in green initiatives, according to an RSR Research report released today, "What Can Green Do For You? Benchmark 2008." Conducted in March-April 2008, the online survey found that green practices are a strategic initiative for 44% of retailers responding. The survey found that motivations behind green initiatives are strongly related to retail performance: While 67% of better performing retailers (“retail winners”) cited ethical obligations behind their green initiatives, 76% of lagging retailers cited only cost concerns.

Retailers anticipate that actions taken now will reap future benefits in the form of increased sales. The difference in perspective leads retail winners to believe that they will reap ROI on their green initiatives in 2-3 years, while laggards are unable to put a timeline to expected benefits.

While supply chain investments and fuel-related expenditures pose big opportunities, the benchmark report also reveals that packaging and material costs, often overshadowed by concerns about fuel prices, are highly valued opportunities for retailers, along with reducing costs in stores; 35% of respondents said that a vendor or supplier's green initiatives have played a role in the retailer's decision to do business with that vendor.

“We were pretty cynical when we launched this survey. We thought that retailers would be in it only for the potential cost savings,” said Steve Rowen, partner at RSR Research and author of the report. “It turns out that better performing retailers see this as both a cost initiative and a brand-building opportunity. They believe consumers’ desire for green options is not just a fad and are investing now to transform themselves into green brands.”

Retail Systems Research (“RSR”) is a research company run by retailers for the retail industry. RSR provides insight into business and technology challenges facing the extended retail industry, and thought leadership and advice on navigating these challenges for specific companies and the industry at large. The report, sponsored by DigiPos and IBM, is available for download from RSR’s website. To obtain a free copy, click here.