Digital Merchandising: A Roadmap Towards Achieving Sustainability in Retail
Digital Merchandising: A Roadmap Towards Achieving Sustainability in Retail

The global fashion industry has been heavily criticized for causing irreparable damage to our environment. A recent study, published in Nature Reviews Earth and Environment, (April 2020), states that the annual impact from the fashion industry is over 92 million tonnes of waste, 79 trillion liters of water consumption, alongside chemical pollution and CO2 emission. 

Adding to this threat is the rapid evolution of technology and the emergence of the new digital mode of doing business, e-commerce. As online shopping continues to grow, so do customer expectations of instant gratification, thus leading to an increase in pollution and volume of waste production by the supply chain networks. The urgent need for e-commerce companies is to re-think their practices and find sustainable solutions that can reduce environmental damage forthwith. 

For brands and consumers, the need for sustainability is no longer a ‘nice-to-have’ but a ‘must-have’. 

With the global temperature rising at an alarming rate, we have less than a decade to save our planet from the challenging carbon trajectory of climate change. Every year counts in this race. Today, when retailers and customers search for more purposeful interactions, sustainable practices can be a key differentiator for ethical e-commerce platforms of the future. Purpose-driven merchandising and supply chain will help businesses stay ahead, building greater resilience and agility in planning and execution. While many fashion brands and retailers have started the ecological makeover of their products, achieving 100 percent sustainability is not easy and will take a long time. The least that can be done immediately is to optimize production and supply chain. 

It is time to Reduce, Reuse and Recycle. How? 

REDUCE - overproduction, packaging waste, and logistics:

-    Gain Insights into Customer Preferences and Trends: Use predictive analytics tools and technologies to assess region-wise and store-wise demand, reduce overstocking, and improve fulfillment. Use sophisticated Merchandise Planning & Allocation solutions, instead of excel sheets, for smart merchandising and planning. Optimize store allocation, reallocate existing stock for higher sales. Track each item to ensure 100 percent inventory exposure with no loose ends. 

-    Reduce Energy and Time Wastage: Save resources, time, and energy by automating processes within the warehouse and by using intelligent tech solutions for quick analysis. Use digital scanners to limit the use of paper and ensure efficient picking with zero human decision-making errors that can lead to wastage or returns. 

-    Minimize Returns: The more precisely a product is described, with high-quality photos, the better customers will be able to judge its suitability. Retailers can implement AI tools to further augment the shopping experience, allowing customers to virtually see the item on different body types, so there are minimal returns.  

-    Improve Packaging: Ensure minimum breakage to reduce the number of returns. Intact items will have no replacement needed, no additional transport required, and no extra management. Prevent excess use of packaging material by creating a closed-loop system in which shipped orders, if returned, can be packed in the same reusable package. 

-    Stay Closer to Customers: Fine-tune region-wise supply chain movements so that items are distributed as per true customer demand. Increase usage of regional utilization matrices to distribute stock according to local demand. Ensure faster and cheaper deliveries by being closer to your customers. This is also helpful in faster return processing as valuable re-sellable returns can be timely collected and made available for sale again.
-    Optimize Deliveries: Increase customer awareness on the environmental impact of returns and re-attempts allowing them to select a time or location to avoid missed deliveries. Eliminate wasted trips caused by multiple delivery attempts and improve the overall experience.

-    Consolidate Packages: Retailers should avoid sending an order in multiple shipments. Try to give an option to the customer to wait a little longer so the orders can be consolidated. 

REUSE & RECYCLE - packaging and products:

-    Sustainable Packaging: Use environmentally friendly material and focus on the recyclability of e-commerce packages by making them attractive to customers so that they can find alternative uses. Sustainable design with reusability in mind increases brand loyalty amongst the customers. 

-    Integrated Package Management: Take a holistic approach to package management by effectively aligning design with other supply chain processes. Provide flexibility to implement late-stage changes in decisions, influenced by economic or environmental factors. Ensure that the impact of every change on the entire process, from packaging to delivery, is fully considered. 

-    Change to the Circular Economy: Give your products a second life. Donate and re-sell to ensure every piece is fully used and not disposed of linearly. 

Sustainability is a pressing issue that all brands and customers must address urgently. While accelerating digitization in merchandising and strengthening risk management are top priorities, so is the need for green and efficient business practices to build viable operations. Since we are all interconnected, every business decision needs to focus on the ecosystem, customers, suppliers, and its impact on communities.

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