How can retail giants become sustainable?

As various industries are trying to reinvent themselves, considering both the evolution of consumer habits and the rising ethical and environmental concerns among the population, one could ask: where is the retail industry at? More specifically, where are all the famous French retail giants, many of which are amongst the most prestigious players worldwide? Companies who wish to survive the transformations brought by the digital revolution — and thrive — need to understand the deep societal challenges we all face.

When I was a boy, Carrefour was the world’s second largest retailer. Today, the company is valued at 17 billion euros — while Amazon exceeds 1 trillion. This breath-taking difference forces us to take on new perspectives. The models that have been imposed on us in a quasi-dogmatic style continue to exist but have become extremely volatile and risk getting sanctioned at any time by clients or the markets at large. Simultaneously, we are facing unprecedented climatic and environmental disruptions, which profoundly question our current production and distribution models. The need for actors to reposition themselves skilfully has never been more urgent.

How can we genuinely rethink big retailers’ distribution model, beyond rebranding, and avoiding the greenwash-trap? A good place to start is by zooming out — to look at the entire value chain all the way from producers and farmers to processing plants and distribution.

Retailers can no longer simply be neutral pass-through centres. Let us imagine a model in which they create stronger ties with their partners throughout the entire value chain both upstream, with producers, and downstream with consumers. Certain retailers like Intermarché and Super U have explored this new model, which is perhaps more in line with consumers than ever — they own factories, have direct relationships with producers, and push their own products, for which they are able to ensure sourcing and processing quality. The remaining question is: how can retailers go one step further while limiting the environmental impact of their industry?

Local and Cooperative

The development of new distribution models is rapidly growing. La Ruche Qui Dit Oui (a French platform that facilitates grouped purchases of fresh produce, with over 1,200 members across Europe), the collaborative supermarket La Louve as well as the AMAP (a community-supported agriculture association), directly link consumers to farmers. These models are interesting because they are both cooperative and local. It would be in the interest of established retailers to go towards such models, which engage consumers through communities and reduce their environmental impact. It is not easy, as it will force them to juggle between two essential needs — on the one hand, the need to hyper-centralise part of their functions, and on the other, the power to hyper-decentralise in order to offer maximum autonomy to producers and brands to be in direct contact with consumers, or even to stimulate them to organise in communities to know what to purchase and what to consume.

The time where society accepted whatever progress brought them is gone. Today, people need transparency and traceability. The market penetration of applications like Yuka — which analyses food labels— is proof that a real change of mentality is taking place. In France, nearly six million users scan the products before purchasing, and buy depending on the impact those products might have on their health. What matters to these users is to know what they are going to eat, to have healthy habits and to reconnect with producers, animals and the planet.

Towards new opportunities

Industrials, brands and distributors need to choose between carrying on developing extremely profitable models that destroy our planet and harm us all, or go towards more sustainable models that might be less profitable on the short term. That is why we have to be resourceful in finding solutions beneficial for the environment, for people and for businesses. Today, most large organisations are not aligned on this matter and are being run the same way they have been for the last 10 to 15 years. Which brings us back to the responsibility of our business leaders. In France, a petition recently collected 20,000 signatures from young graduates who pledged to never work for large corporations that have a negative impact on the world — that alone should alert corporations about the importance of the matter.

Thankfully, the picture is not all black (or even grey) for industrials and distributors. Beyond the crisis and its urgency lies a real opportunity to revisit current models, to use innovation to live and consume better, and to ultimately have a more positive impact on our planet.