A new toolkit aims to inspire retailers to pre-empt a future economic landscape that could be scary

Leading US retailers have launched a joint scheme with an NGO to help companies boost business and benefit society via more innovation. Retail Horizons, devised by the Retail Industry Leaders Association (RILA) and Forum for the Future, is a set of tools enabling the retail industry to mitigate risk, protect the environment and improve the lives of customers, workers and suppliers.

Retail is one of the most diverse and important sectors in the global economy, a major employer with annual sales of more than $4.5tn in the US alone. Not only are retailers therefore ideally placed to both shape and benefit from progress on sustainability, but also they cannot afford to duck the issue in the years ahead, according to the authors of the 114-page toolkit, which focuses on the period until 2030.

Retail Horizons – sponsored by Target, the second largest discount retailer in the US behind Walmart, and Unilever – identifies 22 future trends across the areas of technology, demographics, big data and transparency, new consumption patterns, resource constraints, and politics and economics. For instance, under resource constraints it lists not only water scarcity and a decline in ecosystem services as likely but also time poverty, i.e. a world where consumers have less time to carry out transactions but rising expectations about the ease with they should be able to do so.

Technology trends include augmented reality; including through technology such as Google Glass; “retail everywhere” – the ability to shop digitally and physically with increasing ease and across more and more outlets; and distributed manufacturing, whereby innovations such as 3D printing will fragment traditional centralised forms of production. These trends are relevant because they will create the backdrop against which retailers will have to innovate if they are to strengthen global sustainability, according to Forum for the Future and RILA.

Retail scenarios

While it confidently predicts an older US population and higher customer expectations for speed and transparency, Retail Horizons admits other changes are less certain, such as the energy mix for electricity generation, transport and manufacturing and whether people will even continue to rely mainly on businesses and brands to meet their daily needs.

The document develops four distinct scenarios in which these trends could be played out in the next 15 years. “Rust Belt Renewal” is a resurgence of domestic US manufacturing and agriculture as China and Russia turn away from the west for trade and exports. Retail is smaller than before, with shorter supply chains and a focus on resilience. Thrift, sharing, repairing and recycling are the order of the day.

Imagining a retail world without China

In the “Predictive Planet” scenario, resource challenges are being addressed through tightly co-ordinated supply chains and better data to predict consumer demand. Cities and mobility are hi-tech and retail is marked by huge integration as diverse companies share data to provide customised solutions.

“Networked Nation” sees a global decline in government power as citizens tap into self-organised networks via disruptive new technology. Much economic activity goes unreported and untaxed. Retail has been challenged by the ease with which consumers can scan and replicate many items.

Finally comes “Double or Nothing”: the world is polarised between countries that have committed to renewables and those relying mainly on fossil fuels. Competition for resources is intense and retail supply chains are long because of political uncertainty and complex sourcing of raw materials. Small shops and boutiques are in the ascendancy, though many are chains and franchises owned by big companies.
“The scenarios are not intended to be predictions or visions of desired futures, but instead are coherent, plausible stories about possible futures,” the report states. “They are a powerful tool to help any companies better understand trends, risks and opportunities and they can help retailers take action now to support their long-term success.”

The idea is that companies use the scenarios – which emerged from brainstorming and modelling sessions among RILA members and Forum for the Future – to challenge, inspire, and excite people to create more sustainable change. Companies are encouraged to carry out a risk assessment of business models and supply chains and draw up a sustainability roadmap, which can turn challenges such as water scarcity into opportunities to gain first mover advantage.

Kate Heiny, Target’s senior group manager, sustainability, says: “To date, we have approximately 15 team members from marketing, property development and merchandising using the tool. Our goal is to train approximately 150 Target team members at various levels within the organisation on ways to use the Retail Horizons tools.”

China  Forum for the Future  retail  retailers  Target 

comments powered by Disqus