Retailers are facing a number of tough challenges. Firstly, there is the growing demand by consumers for Fair Trade goods. This places the onus on retailers to source goods, such as cotton garments, from ethically sound producers – so salving consumer conscience and at the same time putting money in the hands of those who need it most. But in doing so, retailers are inevitably sourcing the goods from developing countries the other side of the world to their destined markets, which brings into play the issue of carbon footprints. Is it best to source ethically and burn carbon, or source environmentally and neglect needy causes?
Then there is the the challenge of presenting an environmentally conscious image. The big grocers have clearly identified the potential in being seen to be green and are heavily engaged in various campaigns in order to out do each other: Tesco is to introduce a carbon label on its products, Asda has pledged to cut food packaging on its own-label food by onequarter within a year, and Marks and Spencer has promised to become carbon neutral.
But the greatest challenge facing traditional retailers is the rise in importance of the internet. As Tanya Lawler of Capgemini outlines in her article on page 22, online sales grew by 40 per cent in the Christmas period 2006 over the previous year. Predictions are that by 2009 over 25 per cent of all retail sales will be taken through the internet.
The message seems clear, traditional retailers with their emphasis on the high street will have to turn their attention to adapting their supply chains to cater for multi-channel retailing. Companies such as Next are already fully aware of just how critical online sales are to the bottom line.
Nick Allen, Editor