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How CommerceHub Can Help Retailers Balance Sustainability Goals with Profitability

Philip Hall

Attended by almost 100 C-level executives across the UK retail industry, I was delighted to have the opportunity to co-host a series of roundtables at the Internet Retailing RetailX Nexus21 on one of the key issues driving the retail agenda right now – sustainability.

A big takeaway from this event is that retailers are in a tough spot trying to strike a realistic balance between the goals of sustainability and profitability.

On one hand, consumer demand is driving the sustainability agenda. With consumers looking for more choice, but also more information around a brand’s sustainability practices. Since this can translate into higher prices, the consumer has to make a purposeful choice around value and affordability when ultimately making the decision to buy.

For retailers, the problem is a similar one. Corporate Social Responsibility is becoming more of a board level focus and most retailers are taking steps to reduce their carbon footprint and do business in a more ethical, sustainable way that protects people and the planet’s resources. But this is balanced with the need to make profit, pay shareholders and mitigate very real supply chain risks caused by the pandemic and Brexit.

The Impact of Digital

The dramatic changes in buyer behaviour and explosion of online shopping during the pandemic has meant many businesses have accelerated digital transformation to better adapt. Forrester Research estimates that by 2022, ecommerce will account for 17% of total retail sales, with an additional 41% of sales being digitally influenced.

CommerceHub can support digital transformation by helping brands move to a stockless model. While not a panacea, holding less stock helps with:

  • Keeping cash in the business, not tied up with inventory
  • Reducing the need for owned warehousing and distribution fleets
  • Saving a lot of transportation miles, thereby reducing carbon emissions and shipping costs
  • Allowing consumers more choice online
  • Providing better visibility of the online ordering, tracking and returns process

Mitigating supply chain risk is also on the mind of UK retail executives. The pandemic and the effects of Brexit have seen the UK struggle with supply chain issues, which has led to a focus on near-shoring, shorter and more controllable supply chains. Partnering with CommerceHub gives brands access to a greater number of suppliers to allow for alternative distribution, as well as a partner network which ensures a fulfilment rate of 99%.

Sustainable Supply Chain with Stockless FulfillmentOn the more tactical side, reducing costly returns, which are often as high as 50% or more, is a key focus. The CommerceHub platform allows the addition of extra information (e.g., fit, size, reviews). By offering consumers more transparency and providing sustainability credentials, this helps consumers to make informed buying decisions that can help reduce the number of returns.

In short, we recognise the conflicting forces driving the decisions UK retailers are making at both a strategic and tactical level in balancing sustainability with profitability. We have years of experience helping retailers find this balance, as well as modernising and future-proofing their supply chain.

To find out how we can help, please get in touch with me for a personal conversation at phall@commercehub.com.

About the Author

Philip Hall

Philip serves as Managing Director and is focused on helping grow our European business. He has spent more than 30 years in retail and the CPG sectors, including at Sainsbury’s and Oracle. Philip enjoys a wide range of sporting activities, loves music, history and theatre.