Once an abstract concept in the retail industry, sustainability has emerged as a defining business strategy. As consumer preferences evolve, environmental concerns escalate, and the corporate conscience grows, the transition toward sustainable practices has become crucial. It's no longer a matter of choice but a question of when. At DotActiv, we understand this reality.
Reflecting on a few key statistics can further underline the importance of this transition. A 2019 Accenture study revealed a growing consumer inclination towards environmentally friendly products: 72% of respondents bought more such products than they did five years ago, and 81% planned to increase these purchases over the next five years. The Economist also found that over the past five years, there had been a 71% rise in global online searches for sustainable goods, while globally, 60% of consumers rated sustainability as a critical purchase criterion.
These trends aren't merely numbers - they represent a new way forward for retail, a path filled with opportunities and, admittedly, some challenges. But that shouldn't stop you from exploring. At DotActiv, we believe in taking this new path to create a more sustainable and profitable future for any retailer interested in providing sustainable product options for their customers.
The research we've read and investigated around consumer trends points to this fact: more and more consumers want sustainable product options. You only need to consider the figures we quoted above.
Here are a few more:
85% of people confirmed they have shifted their shopping behavior to purchase more sustainable products in the past five years. GreenPrint's Business of Sustainability Index found 75% of US consumers are concerned about the environmental impact of the products they buy, while 69% said a product's environmental impact influences their purchasing decisions.
However, there aren't many options available to them. We're quoting GreenPrint's Business of Sustainability Index again. 45% of those surveyed say it's tough to maintain environmentally sustainable purchasing habits. DotActiv wants to help alleviate that problem - spearheading the change to empower retailers to provide sustainable product options and meet consumer demand.
But why us?
We have been a category management software and services solution provider for over 20 years, helping retailers choose what products to stock to meet consumer demand. That puts DotActv in a distinct position. We can influence product assortment, product space allocation, and shelf positioning.
At the same time, we can accelerate this transformation by steering any assortment and space allocation decisions toward more sustainable choices.
Here’s why it makes sense for DotActiv to drive this change:
There is also the point that we can't sit back and wait, letting others take a stance on sustainability while there is a call for more businesses to follow suit.
As more and more retailers transition and direct their energy toward sustainable growth, we want to be available to help. We are committed to developing practices that support our clients in achieving their sustainability goals.
Our new purpose describes it best:
"Our purpose is to accelerate the world's transition to retail sustainability through category management that simultaneously delivers remarkable performance, exceptional shopping experiences, and meaningful strides towards sustainability."
Of course, we are aware of the challenges that retailers face. Making the transition isn't like flicking a switch. It takes time and dedication. Also, meaningful change comes when you execute data-driven tactics. However, category management and sustainability go hand-in-hand because they help retailers meet consumer demand.
When we first developed our software in 2001, we intended to offer a software solution that helped retailers and suppliers maximize their sales and please their customers. For the past 20 years, we have achieved that and more, helping our clients achieve their goals more effectively and efficiently.
As we move towards supporting retail sustainability across the global market, we knew it was time to enhance our software further. We aim to provide our clients with the tools to respond to shifting consumer preferences and improve the shopping experience, all while mitigating potential concerns about implementation time and resources.
It's not only the DotActiv software that we've enhanced. We've also improved how we offer our services. We aim to help our clients transition toward a sustainable future in the following ways:
We have integrated a set of sustainably-focused rules into our software, which retailers can use to identify which products are more sustainable than others to make appropriate assortment decisions.
The rules in Range Optimizer focus on the following:
Then, within Eco-packaging, we have divided named indicators into a variety of fields. They include:
We have done the same for the product sustainability rules. We have divided the sustainability indicators into the following fields:
By giving sustainable products more space and positioning them better on the shelf, we're making it easier for your customers to find them. That leads to a better shopping experience while simultaneously promoting sustainability.
We have also introduced a series of sustainability KPIs, which you can use to drive sustainability in your business. Moreover, you can understand where the bottlenecks or wins are happening.
We’ve divided our sustainability KPIs into three categories:
We have based these KPIs on the new fields added to the DotActiv database for classifying products for Sustainability and Packaging. Let’s unpack each further.
Products listed in the DotActiv database
These KPIs speak to what products you list in the DotActiv database from your supplier/s.
The % Eco-Packaging Product Availability KPI focuses on the packaging aspect of the products. But first, each environment must define the number of packaging fields that need to be positive to flag a product as eco-packaged.
For example, you could decide a product needs three positive indicators to flag the overall product as Eco-packaged.
All products that are flagged as eco-packaged are then represented as a percentage of the total products within that category/group or department.
This helps you understand what percentage of products available in the database meet the eco-packaging criteria, and if this percentage is too low then you know that you need to engage with your suppliers to address concerns with existing products or list more products that meet the eco-packaging criteria.
Meanwhile, the % Sustainable Product Availability KPI focuses on the availability of products that are flagged as sustainable. Again each environment will need to define the number of sustainability fields that need to be positive to flag a product as sustainable.
All products that are flagged as sustainable are then represented as a percentage of the total products within that category/group or department.
This helps you understand what percentage of products available in the database meet the sustainability criteria, and if this percentage is too low then you know that they need to engage with your suppliers to address concerns with existing products or list more products that meet the sustainability criteria.
Products retailers include in the assortment
These KPIs speak to what products you include in your assortment and make available to your shopper on the planogram.
The % Eco-Packaging Product Range Composition KPI speaks to the range composition and will give you the percentage of products in your assortment that are flagged as eco-packaged versus all ranged products in the assortment.
This allows you to understand what percentage of the assortment is made up of products that meet sustainability strategies, specifically the packaging of products.
The % Sustainable Product Range Composition KPI speaks to the range composition and will give the user the percentage of products in their assortment that are flagged as sustainable versus all ranged products in the assortment.
This allows you to understand what percentage of the assortment is made up of products that meet the sustainability strategies, specifically the sustainable products.
How products perform compared to total category performance
These KPIs speak to how well the products are performing when compared to the total category performance.
The Eco-Packaged Products Performance KPI is all about the performance of Eco-packaged products when compared with the total category and is represented as a percentage. It looks at performance from the perspective of Sales, Units, or Profit.
This is where the performance element of our sustainability initiative comes into play. This KPI will help you understand if the performance of your eco-packaged products contributes positively to the overall category and if the consumer is actively purchasing these products. When this increases, it indicates that the range composition could be increased for eco-packaged.
The Sustainable Products Performance is similar to the Eco-Packaged Products Performance KPI. The difference is that this KPI is all about the performance of sustainable products when compared with the total category.
This KPI helps you understand if the performance of sustainable products contributes positively to the overall category and if the consumer is actively purchasing these products. When this increases, it indicates that the range composition could be increased for sustainable products too.
We have a tried and tested proprietary process that allows us to deliver our category management services to perfection and in a manner that offers our clients consistency and peace of mind.
We continually refine these processes based on our ever-expanding global perspectives and understanding of what the retail market requires from a category management service provider. That includes retail sustainability.
We have updated our services process to include new and relevant key performance indicators (KPIs) that align our efforts to help retailers move toward sustainable best practices.
To remain relevant and focused on sustainability, we have updated relevant consultations. The goal is to ensure that we provide the advice our clients need so they can make the best decision about what products to include in their stores.
The shift to sustainability isn't a trend that'll fade; it's the future for retail. That in itself sounds daunting. How do you prepare your business for such a future? The solution is to join a business that understands retail and how to respond to changes in consumer demand.
Let DotActiv be your ally in this journey, offering specialist software and services that promote sustainable best practices to help you achieve your goals while catering to the increased demand for sustainable product options.
Ready to shape a sustainable future for your retail business? Book a demo with us today and explore how DotActiv can power your move toward a more sustainable and profitable future.