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For the 2011 Holiday Shopping Season: Discounts are In, Sustainability is Out

Raz Godelnik
| Thursday December 8th, 2011 | 0 Comments

When it comes to holiday shopping, it looks like business as usual with retailers promoting sales and shoppers looking for bargains. But what about sustainability? Unfortunately, this theme is being ignored this year by both the majority of consumers and by retailers.

This phenomenon is especially interesting since many retailers spend the rest of the year promoting sustainability and generating value from it. Now, it looks like they decided to store sustainability on a distant shelf in their warehouse and wait for the holiday season to end so they can dust it off and put it on display in the front of their stores again.

This year looks promising for retail sales, so far. NPR reported earlier this week that Americans spent $52.4 billion over the Thanksgiving holiday weekend, the highest total ever recorded for that period and 16 percent more than last year, according to the National Retail Federation. The same report emphasized that shoppers are looking for deep discounts and, as a result, retailers are competing aggressively on price.

This competition, according to the NPR report, led retailers to offer creative “buy one, get one free” deals. The example retailers – Gap, Body Shop, and Target, as well as others mentioned in the report like Best Buy and Walmart – are well known for their meaningful efforts to become more sustainable. Yet, when it comes to the time of the year when a large part of their business takes place, they forget about sustainability and just try to beat their competitors with better (i.e. cheaper) pricing.

In a way, it looks like we’re back to the old positioning of sustainability as a mere act of altruism that is forgotten when profits are at stake. As you probably know, this presentation of sustainability is far from true. Eric Lowitt brought up some excellent examples in a recent Harvard Business Review article, showing how sustainability creates value for retailers by reducing costs, increasing revenues and creating tangible and intangible value.

The examples in the HBR article are taken from Lowitt’s book The Future of Value. UK retailer Asda lowered its 2010 expenses by more than $110 million by energy and waste reduction throughout its 500 stores. Marks & Spencer expanded into residential energy management by launching a new service, called M&S Energy, where UK residents can buy solar energy products that also reduce their heating and electricity bills.

It is not surprising that these examples come from the UK, as retailers there seem to be more progressive when it comes to integrating sustainability into their core strategy. Still, if you think the picture is greener across the ocean, that isn’t necessarily true. When you look at Marks & Spencer’s website, you’ll see that the company that brought the world Plan A is also focusing on discounts and exclusive deals this time of year.

Lowitt uses one positive example from this holiday season - Patagonia and its unique ‘Buy Less’ campaign. But not only is Patagonia the exception, it is also a relatively small retailer that the big retailers don’t see as a threat to their business.

It is surprising to see this behavior from these retailers. Not because sustainability is the right path from an ethical perspective, but because it makes sense from a business perspective, given that all retailers fight for the same competitive advantage. As Nick Aster mentioned last week, when everyone is moving in the same direction, an opportunity presents itself for those who choose an alternative path. The only question remains, what is the alternative path in this case?

This is the challenge that none of the big retailers have managed to overcome yet. How do you promote sustainability, when your main goal is still to maximize your profits as much as possible during the holiday season? It becomes more complicated when you take into consideration that the majority of consumers mainly want good prices. They would probably be more interested in “buy one, get one free” than in “buy one, give one,” like TOMS offers. Still, it is not an impossible mission. Retailers that choose to be creative with offers that provide meaningful benefits for shoppers, and be more sustainable at the same time, may find themselves in a better position in the long run.

Image credit: Wigwam Jones, Flickr Creative Commons

Raz Godelnik is the co-founder of Eco-Libris, a green company working to green up the book industry in the digital age. He is also an adjunct professor in the University of Delaware’s Alfred Lerner College of Business and Economics.


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