AGreen Year Ahead

It’s going to be a challenging year. To no one’s surprise, that seemed to be the general sentiment as retailers began to make their way through 2008. But if the buzz at the National Retail Federation’s annual conference in New York City was any indication, it’s also going to be a green one.

Indeed, sustainability is one of the few areas that retailers actually seem to feel good about these days. And with good reason: Incorporating green materials and technologies into a building not only adds dollars to a chain’s bottom line, mainly though energy savings, but also seems to be hitting home with customers.

“Customers have responded well to our green design,” said Ken Kacere, senior VP, retail stores, L.L. Bean, which opened three eco-friendly stores in 2007, during a presentation at the conference. “The stores with our new design are running into the double digits over our initial projections.”

Many retailers want to jump on the green bus, but remain wary about the cost. L.L. Bean’s construction costs/one-time capital costs on its green stores were estimated to run 5% to 7% higher.

“We found the entire package was not that much greater than what we were spending before,” Kacere said. “Part of our mission is to get people to understand that it doesn’t cost all that more and that it does make a difference.”

A similar note was echoed at the NRF show by Leslie Dach, executive VP of corporate affairs and government relations of Wal-Mart Stores, which in just two year’s time has become a poster child for retail sustainability.

“There’s no question sustainability has made Wal-Mart a better business and a better company,” Dach said. “Because of our efforts, we have more efficient stores, stronger relationships with our suppliers, more environmentally friendly products for our customers and prouder associates.”

The chain’s environmental initiatives have also helped it find common ground in some unlikely places.

“We’ve listened to, and worked with, some of our most ardent critics,” Dach said, “and at times that hasn’t been easy. It’s been very hard to get some groups and individuals to sit down and talk with us. Some still won’t, but it’s fewer every day. We’re talking with people and groups we never would have been able to engage without our commitment to sustainability.”

Among the lessons learned by Wal-Mart during the past two years, one of the most important is the need to implement sustainability from the bottom up and across the entire company. Many of the chain’s best sustainability ideas have come from its associates, according to Dach. Wal-Mart is saving more than $1 million annually thanks to a store associate who questioned the necessity of having lights glow round the clock in the vending machines in the chain’s break rooms.

“He wondered how much the money the company could save by taking the lights out of all the vending machines,” Dach said. “His idea got back to the home office, and after we ran the numbers, we learned that we could save more than $1 million annually by taking out those bulbs.”

The incident makes crystal clear something that often gets lost amid the headlines: While becoming a more environmentally friendly company often involves big, game-changing strategies—from utilizing renewable energy to creating zero waste—it’s also about making small changes, such as removing a light bulb from a vending machine. That’s something that all retailers, whatever their footprint or resources, have the ability to do. Your business, not to mention the planet, will be better off for it.