Sunny Image

It not uncommon these days to see more and more retailers providing "green" options in their stores. With surging energy prices and surging importance that consumers are giving to how eco friendly are the stores they shop from, more and more retailers are jumping on to make more of their offerings "green". The not so new inclusion in this wave has been using more and more renewable energy in running the store. Installing solar panels is one such measure as reported by this recent article (subscription maybe required) in NY Times. Some very interesting points in the article are

• If Wal-Mart eventually covered the roofs of all its Sam’s Club and Wal-Mart locations with solar panels, figures from the company show that the resulting solar acreage would roughly equal the size of Manhattan, an island of 23 square miles - Wow that can change the look of suburbia...imagine all the stores with black tinted tops gleaming in sunlight. Jokes apart, I wonder how much %age of electricity consumption of the store can it actually take care of. Is this more of an image thing or there is a long run bottomline benefit involved.
• The current rush apparently is driven by a government deadline at the end of the year to get renewable energy tax credits. As stated by one of the people interview in the article - “Every project that starts development has to be finished by Dec. 31 or you lose tax equity advantage, and nobody’s willing to take that risk,” said George Waidelich, vice president for energy operations at Safeway. “You’re talking about millions of dollars.”
• One thing that comes across as a little contradictory is the rise in the price of solar panels with greater demand. This might indicate a lag in solar technology manufacturing ramp up.
• And finally a basic difference between us and our friends across the pool - "American retailers are following the lead of stores in Europe, which are much further along. Store-roof projects are so numerous in parts of Germany that they can be spotted in satellite photos. Government subsidies there, however, have lasted for years."

Green is in

This month a lot of industry magazines seem to be focusing on the emergence of green trends in retail. Chain Store Age had a green theme for its October issue where it discussed several trends emergining in green retailing. A few interesting findings from the perspectives section

1. Cost of Going Green: An interesting excerpt on cost of going green - "Despite popular notions to the contrary, it does not cost more to build an environmentally conscious facility than a traditional building, according to a recent report by Davis Langdon, a San Francisco-based consulting business that helps architects and building owners manage construction costs.Green building, however, does require a different mind-set, advised Langdon. Sustainable features are too often tacked onto a project as an afterthought, making them appear as an added cost that can be easily cut.“Until design teams understand that green design is not additive, it will be difficult to overcome the notion that green costs more, especially in an era of rapid cost escalation,” according to the Davis Langdon report, “Cost of Green Revisited,” which studied 221 new construction projects." With the fuel prices rising by the day, the recovery even for an added investment into greener technology might be fast
2. Young Generation's Perspective: The young generation seems to be spilt into half when it comes to retail preferences based on whether the retailer has green/environmentally friendly policies and infrastructure. An excerpt from a recent survey "According to the latest Maritz Poll, “Environmentally Friendly Retail Marketing—All Hype or Consumer Preference?,” Gen-Y shoppers (defined as being between the ages of 18 and 30 for the purposes of this survey) are split down the middle on influence of retailers’ environmental policies on their spending habits.Of the 1,062 Gen-Y shoppers surveyed, less than half (46%) said they would shop at a retailer more if the retailer were to go green. The research also revealed:Fifty-four percent said green doesn’t influence their buying decisions;Nearly half (47%) said they would pay more for environmentally friendly services, products and brands"

As green trend continues due to changing customer opinion and lifestyle, sooner or later going green might become a necessary criteria rather than just a differentiation strategy. Like technology trends, it might have its own leaders, followers and laggards but an eventual adaptation might become a reality - probably sooner than later.

Green-Back

I used to always think that going green (i.e. to adopt more environmentally friendly processes in business) on the part of retailers was a branding or a corporate philosophy thing. But an article here talks about a CA based organic food retailer United Natural Foods making it into a revenue generating proposition. UNF has a distribution warehouse where they have installed a solar power generating unit generating 1.5 million kilo-watts of electricity in a year. The unit not only generates power for the facility's needs but trades excess power to the state electricity supplier for which it gets credit. Add to that other tax incentives that they might get because of their green energy policy.