communicating sustainability aspects of products …...interactive screens, mobile technologies and...
TRANSCRIPT
Final Report
March 2007
prepared by
UNEP/Wuppertal Institute Collaborating Centre on Sustainable Consumption and Production
in collaboration with the United Nations Environment Programme
Communicating Sustainability Aspects of Products Using Modern Information Technologies
The Case of the Retailer Sector
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UNEP/Wuppertal Institute Collaborating Centre on Sustainable Consumption and Production (CSCP) Hagenauer Straße 30 42107 Wuppertal | Germany Phone | +49.202.45 95 8.10 Fax | +49.202.45 95 8.31 www.scp-centre.org [email protected]
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About This Study and Acknowledgements
This study is conducted within the scope of the Sustainability in the Retailer Sector Project of the CSCP. The project involves development of guidelines manual for retailers, which shows how to comply with sustainability requirements. As a part of the project, a study is conducted to identify options for retailers to inform consumers by means of modern infor-mation technologies. This document presents the findings of this study.
The CSCP would like to thank colleagues at UNEP for their feedback and collaboration.
Our special thanks to Wendy Wallace for her careful research work in locating options for retailers to apply leading Modern Information Technologies and her contributions to writing of this paper. Thanks are also extended to Daria Karetnikov for her editing support.
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List of Boxes............................................................................................................................6
List of Figures .........................................................................................................................7
Executive Summary................................................................................................................8
1. Introduction .......................................................................................................................11
1.1 Background ...................................................................................................................11
1.2 Objective, Scope and Limitations .................................................................................13
1.3 Overview of Various Communication Schemes...........................................................13 1.3.1 In-Store Communication ..........................................................................................................14 1.3.2 Beyond the Store Communications.........................................................................................15
2 Modern Information Technologies in Focus ..............................................................17
2.1 Current Practices...........................................................................................................17 2.1.1 Internet ......................................................................................................................................17 2.1.2 Interactive Screens...................................................................................................................22 2.1.3 TV Screens ...............................................................................................................................27 2.1.4 Mobile Technology ...................................................................................................................28 2.1.5 Customer Club Cards...............................................................................................................29
2.2 Future Possibilities ........................................................................................................30 2.2.1 Smart Ads .................................................................................................................................30 2.2.2 Window Shopping ....................................................................................................................31 2.2.3 Holographic Images .................................................................................................................31
3 Findings and Conclusions............................................................................................32
3.1 Findings .........................................................................................................................32
3.2 Analysis .........................................................................................................................33 3.2.1 Strengths...................................................................................................................................33
Table of Contents
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3.2.2 Weaknesses .............................................................................................................................34 3.2.3 Opportunities ............................................................................................................................36 3.2.4 Threats ......................................................................................................................................36
3.3 Conclusions ...................................................................................................................39 3.3.1 Recommendations for Future Research .................................................................................40
References.............................................................................................................................42
Resources..............................................................................................................................45
Abbreviations ........................................................................................................................46
Definitions..............................................................................................................................47
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Box 1. Importance of Retail Industry to Sustainable Consumption. .....................................11
Box 2. The Waitrose Website.................................................................................................18
Box 3. The Internet as an Information Provider at the Home Depot ...................................19
Box 4. Traceability, an Ahold / Utz Kapeh perspective.........................................................22
Box 5. RFID: Exciting Technology! ........................................................................................23
Box 6. Metro Future Stores Interactive Screens ...................................................................25
Box 7. Stop and Shop’s Shopping Buddy.............................................................................27
Box 8. ICA Shows its Swan Label on TV...............................................................................28
Box 9. Use of Mobile for Receiving Product Information ......................................................29
Box 10. Tesco Uses Clubcard to Decrease Plastic Bag Use ...............................................30
Box 11. MITs as reflections of Interpretive Techniques........................................................33
Box 12. General Strengths with In-Store Technology Use ...................................................33
Box 13. General Weaknesses with In-Store Technology Use..............................................35
List of Boxes
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Figure 1. Consumer supply chain highlighting retailer’s role. ...............................................12
Figure 2. CO-OP Sweden for Sustainable Eggs; caption reads: “We’ve stopped selling eggs from cages hens. Take 219 people with you into this bus and you’ll understand why.” ......................................................................................................16
Figure 3. A Wealth of Information on Fair Trade at the Waitrose Website ..........................19
Figure 4. The website, www.homedepot.com is used to promote environmentally friendly products.....................................................................................................................20
Figure 5. The left side (a) displays how the consumer enters in the product information and the right side (b) shows the supply chain information provided after the product label is typed into the computer. ..............................................................................21
Figure 6. Traceabilty portion of the Albert Heijns website for Utz Kapeh coffee. Title reads: Where does your coffee come from?.......................................................................22
Figure 7. Information Kiosk from Virgin Life Care .................................................................24
Figure 8. Information Kiosk for Traceability at Metro ............................................................26
Figure 9. Illustration of transparency via mobile phone technology .....................................29
Figure 10. Life Cycle of the Internet infrastructure ................................................................38
List of Figures
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Sustainability information and the retail sector Because of its role as the interface between consumers and producers the retail sector has a unique potential to influence sustainable consumption and production. In the upstream supply chain retailers can define environmentally oriented purchasing requirements. At the downstream consumer level retailers can educate consumers about sustainability issues. In addition to providing information on products produced in a sustainable manner, retailers are also well positioned to provide information on improving life-cycle impacts, for instance respecting the use-phase and end-of-life disposal of products.
Modern information technologies (MITs) are becoming increasingly being applied by retail-ers to communicate within supply chains and, more recently directly with consumers. This summary identifies and evaluates options for retailers to apply leading MITs to communi-cate sustainability related information to consumers based on a review of leading practice in the food, information and communication technology (ICT), automobile, do-it-yourself (DIY) and textile sectors of Europe, North America and Japan.
Modern information technologies
Modern information technologies are a rapidly advancing field that can facilitate new effec-tive means for retailers to reach consumers. Methods profiled below include the use of the Internet as a provider of static information and facilitator of traceability schemes, in-store interactive screens and information kiosks, personal shopping assistants, television moni-tors, mobile technologies and customer club cards. ‘Smart ads’, interactive window-shopping and holographic imaging as emerging technologies are also profiled.
Internet
There has been a significant application of the Internet by many retailers as information provider for consumers and high profile examples are easily identified. It has been shown that by increasing access to information retailers are often able to win consumer trust in the products and the retailer. Types of information provided by retailers include the range sus-tainable products on offer, information ‘behind’ the label, producer profiles and production methods, additional details on product contents, commitments to sustainability, information on the proper use of products and retailer/producer contact information.
A second application of Internet technology includes traceability schemes, which go be-yond providing static information to enable consumers to trace supply chains of individual products. This emerging application offers retailers an opportunity to further increase con-
Executive Summary
For a growing number of con-sumers the In-ternet is emerg-ing as a central element of the retail experience
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sumer trust in both the retailer and the products on offer. Furthermore, when tracing prod-ucts through the supply chain, consumers can feel more that they are part of the chain themselves, which increases the likelihood of environmental and social externalities being considered in purchasing decisions. In addition, increased knowledge of supply chain issues gained when compiling traceability information offers tangible benefits to retailers such as quality tracking.
Examples of retailers offering traceability information include Albert Heijn (NL) and ICA (SE) with regard to Utz Kapeh certified coffee, and Barts, Alchemist, Kids Case, Kuyichi, and INTI Handmade Knitware in the clothing textile sector within the ‘MADE-BY check it Out’ traceability system in the Netherlands (www.made-by.nl).
Interactive screens
Different types of interactive screens with similar but unique functionalities are used by retailers to communicate product related information to consumers. Simple information kiosks, which offer functionality such as tag scanning to provide supply chain information, enable consumers to browse other product related information and order other related products connected to the product in question directly from the kiosk. Metro, a German retailer provides consumers with opportunities to scan egg cartridges to learn about pro-duction methods. Personal Shopping Assistants (PSAs) are devices attached to shop-ping carts to guide and inform customers. Advanced PSAs offer customisation functionality based on aisles visited within the store and deliver product descriptions, alerting customers to sustainability attributes. Furthermore, they have the potential to keep customers on track with their purchasing, thus eliminating unwanted and unplanned purchases. While lacking interactivity, the use of television in retail environments is a new phenomenon. Large retailers using TV technologies in their shops include Tesco (UK), Asda (UK) and ICA (SE) for short brand ads and store information.
Mobile technology
Mobiles technologies offer another opportunity to provide sustainability information to con-sumers. Quick Response (QR) code readers have been used in Japan to transfer product information in-store to the consumer. In Europe, QR code readers are mainly available through a technology called i-mode, pioneered by NTT DoCoMo, a Japanese mobile com-munications company. QR codes which are readable by a mobile phone camera are af-fixed onto a product or package and direct consumers to online product information via wireless internet enabled mobile phones.
Customer club cards
Although a long standing tool to encourage customer loyalty, club cards are now used to encourage sustainable behaviour by awarding ‘points’ normally associated with purchasing behaviour to other desirable behaviours such as bringing reusable shopping bags. Other
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initiatives include opportunities to calculate greenhouse gas emissions (British Petroleum) or support contributions to support greenhouse gas mitigation schemes.
Emerging MIT applications Several emerging technologies offer potential applications in communicating sustainability information to consumers. Poster advertisements called Smart Ads can now “talk” to their viewers by using either near-field communication (NFC) or Bluetooth technology via mobile phones. Communications modes can include text, graphics and video. These technologies offer opportunities to communicate sustainability information to consumers and enable informed purchasing decisions. Interactive Window Shopping has been tested by Polo-Ralph Lauren in New York City to offer information and shopping opportunities after hours. Holographic images have been pioneered on a test basis by Toyota on a test basis for application in vehicles to assist with control of air conditioning, audio and satellite naviga-tion systems and potential exists to enable communication of energy efficiency matters.
Conclusions The MIT sector is developing through a number of different avenues, including the Internet, interactive screens, mobile technologies and customer club cards. Technological devel-opments, such as RFID and i-mode technologies have enabled new ways for retailers to interact with consumers. While not fully mature as a communication technology, MITs can strengthen the message to the consumer by providing an interactive interface, which can hold more information than typical in-store or even beyond-the-store methods, such as the Internet. These factors can possibly translate into the purchase of more sustainable prod-ucts and the use of products in a more sustainable manner and may contribute indirectly to the sustainability of the supply chain. Many aspects of MITs are not well understood, which presents significant challenges given the implementation costs and uncertainty sur-rounding the real benefits the technologies offer retailers. Uncertainties include a lack of clarity of whether they contribute to retailer sales or brand recognition, especially for sus-tainable products.
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1.1 Background The retail sector has the potential to affect significant change in society like no other indus-try because of its broad reach throughout the world and throughout the customer chain. Retailing is an extremely international business, involving producers and manufacturers in separate continents, all linked through one retailer. In the supply chain, retailers can define environmentally oriented purchasing requirements. At the store level, they can educate consumers about sustainability issues. Retailers control and act as the gatekeeper for the goods and services offered to consumers. Thus, retailers have the ability to influence be-haviour and consumption patterns around the globe.1
Retail Industry and Sustainable Consumption
The retail industry is important to sustainable consumption for two major reasons:
1. It is the main link between the consumer and the producer, as shown in Figure 1. 2. It is important for changing current behaviour to sustainable behaviour via:
• Improving the market for sustainable products; • Increasing responsible use of products.
Box 1. Importance of Retail Industry to Sustainable Consumption.
Retailers can potentially contribute to sustainable consumption efforts in a significant man-ner. There are several reasons for this. First of all, retailers are the main link between consumers and products and therefore play an important role in influencing consumers’ choices and consumption. For example, the average Japanese shopper spends $9,309 at retailers annually (UNEP et al., 2006). Figure 1 shows a very simplified version of where retailer fits into the supply chain for consumer goods.
1 [1] http://www.trca.on.ca/living_city/retail/ Greening_Retail_Program_Description-Mar06.pdf
1. Introduction
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Retailers in the Consumer Supply Chain
Source: Adapted from Westwood, 2002; 157
Figure 1. Consumer supply chain highlighting retailer’s role.
Secondly, retailers are important for creating sustainable behaviour among consumers (OECD, 2002). Some consumers may make purchasing decisions based on information they receive from retailers. Jensen et al. (2003) find that 58% of consumers receive infor-mation from retailers before making purchasing decisions for electronic products. Thus, providing more information on sustainability criteria could increase awareness and possible purchase of more sustainable products. While studies have shown that provision of infor-mation cannot necessarily create change, provision of information within a retail store is especially important, because the knowledge that consumers are gaining can directly lead to action, if the consumer chooses the more sustainable product (McKenzie-Mohr and Smith, 1999).
Also, retailers’ supply of products can have the power to aid consumer’s recognition of sustainability aspects (The Swedish EPA, 2005). For example, the John Lewis Partnership provides a large range of A-rated appliances per company policy (Sustainable Consump-tion Roundtable, 2006). Retailers can even eliminate unsustainable options from their inventory; B&Q, a major UK DIY, for example, has the goal of only selling wood certified sustainable by the Forest Stewardship Council (FSC). Additionally, only selling fish certi-fied sustainable from the Marine Stewardship Council MSC can also increase sustainability measures (Sustainable Consumption Roundtable, 2006). Another potential is to provide functional solutions for consumers, instead of offering products (Mont, 2004). For exam-ple, retailers can offer car rentals, instead of car purchases.
On the other hand, retailers can help improve consumers’ sustainable behaviour by en-couraging proper use of products. Use of products can often be the main source of envi-
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ronmental impact along the lifecycle of a product. For example, during the lifecycle of a washing machine, the use-phase has the greatest amount of energy consumption, air pol-lution, water pollution, solid waste, and water consumption (Ottman, 1998). By educating and informing their consumers, retailers can help consumers make more educated choices and use products in a more sustainable way (University of Cambridge, 2006).
One of the increasingly popular ways for retailers to communicate is through modern in-formation technologies (MITs). In fact, retailers have been developing these technologies for years, for uses ranging from efficient consumer marketing to improved supply chain management. More recently, MITs are being used and developed for direct consumer information.
1.2 Objective, Scope and Limitations Retailers might use several communication techniques either to improve the market for sustainable products or to increase responsible use of products. The purpose of this report is to identify options for retailers to inform consumers on product sustainability issues by means of modern information technologies.
The report focuses on the following retail sectors: food, information and communication technology (ICT), automobile, do-it-yourself (DIY) and textile.
Geographically, the scope of the report focuses on Europe, North America and Japan. The focus is limited to these regions because the ICT sectors are very strong there and many of the major retailers that are pioneering the new technologies are based there. For exam-ple, Japan has the most advanced communications technology in the world (Kilbum, 2006). It is in these regions that the largest retailers are located. In fact only two of the largest 100 retailer corporations in 2005 are from outside of these areas (McIntosh and Valerio, 2005). The large retailers are the ones most likely to have the resources to utilize these new tech-nologies. For instance, one of the newest innovations – Radio Frequency Identification Data (RFID) technology - was pioneered in the US at the Auto-ID Centre2, a partnership of 100 global companies and institutions, including Wal-Mart, Tesco, Nestle, Pepsi, Kellogg’s (Finch, 2006).
As many of these technologies are new and constantly developing, the report will do its best to provide current information, although many products are too new for drawing con-crete data and analysis.
1.3 Overview of Various Communication Schemes Retailers can use a number of different techniques to communicate sustainability aspects of products to the consumer. The following section outlines the primary normative ways in
2 http://www.autoidlabs.org.uk/
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which retailers currently provide consumer information. As modern information technolo-gies will be discussed in chapter two, they are not discussed in this section.
1.3.1 In-Store Communication
In-store merchandising is one of the most important types of retail communication to the consumer. Retailers can communicate in-store via placement, prompts, packaging, and personal selling.
“Exposure” of the products is thought to be one of the most important ways to increase sales and product awareness. In retail, the placement of the product is crucial for product visibility. One of the issues with more sustainable products, such as organic or Fair Trade, is that people may not be aware that they exist, or that they are even in the store (Vermeir and Verbeke, 2005). Furthermore, during promotional periods, retailers can make con-sumers aware of products via special placement – for example, bringing their sustainable products together - to inform consumers of the full product range. Added information in this regard can also increase awareness. Retailers are the outlet for these products and play an important role in making the customer aware of their existence.
In-store prompts and other displayed information are also important to engaging the con-sumer and informing them about product purchase information. Shelf-tags, for example, which generally inform consumers of special discounts, can also be used to draw attention to the item’s label. Transfair USA, a member of the Fair Trade Labelling Organisation (FLO), believes that shelf-tags are one of the most important things to drawing consumer awareness towards the label.3 They can also work towards increasing awareness and trust by giving the consumer further information. Posters and leaflets can be used to in-form consumers about products and sustainability information. For example, B&Q, a UK D-I-Y retailer uses leaflets to inform consumers of energy saving techniques, and they can also be brought home and used as reminders (Almaani et al., 2005).
Packaging can be used to inform consumers of sustainability options. First of all, labels can be displayed on packaging. Third-party labels, such as the EU (European Union) Flower, can help increase trust in consumers. Consumers have also shown a greater will-ingness to pay for third-party labels. For example, a discreet choice analysis by Sammer and Wüstenhagen (2006) showed that consumers are willing to pay much more for an EU A-labelled washing machine than an EU C-labelled washing machine. Other information besides the label can also be displayed on the package. For example, the Änglamark brand, CO-OP Sweden’s own coffee brand has information on the package informing con-sumers about what Fair Trade is and where they can find more information. The package can be used to inform consumers about the use of products, for example informing con-
3 Olson, Dan. Transfair USA Retail Contact. Interview July, 2006.
Placement
Prompts
Packaging
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sumers about proper washing on the back of a detergent can help decrease the amount of chemicals used in the wash.
Personal selling, via demonstrations and discussions, can also improve consumer knowl-edge and awareness about more sustainable product options and provide information about sustainable use (University of Cambridge, 2006). For example ISO, a food retailer in Denmark, has found that informing consumers about Fair Trade coffee by using taste-testing techniques and other demonstrations is one of the most important ways of promot-ing these products, by increasing consumer awareness, as well as sales. They also invite farmers to come and talk about their organic products. Inviting the farmers is a good way to increase transparency of food products.
1.3.2 Beyond the Store Communications
To reach consumers outside of stores, retailers have developed different techniques to communicate product choice and use.
Advertising, such as in television, magazines and newspapers, can be used to create more awareness among consumers on sustainability issues. Colourful and slogan advertising can create an emotional relationship with consumers. For example, retailers such as CO-OP in Sweden use advertisements on busses, as shown in Figure 2, to inform consumers about the importance of organic egg production. Advertisements and other forms of com-munication that use slogans can make people feel that they are actually making a differ-ence when they purchase products that are more sustainable. For instance, Volkswagen ran commercial ads announcing the launch of their low energy consuming model 3L Lupo TDI with the slogan “ Tomorrow Starts Today.” Even though price was a barrier for many consumers, it contributed to the rise in purchases of more energy efficient vehicles in Europe generally.4
4 UNEP. Creative Gallery on Sustainable Communications. http://www.unep.fr/pc/sustain/advertising/ad/ad_details.asp?id=59436&cp=&cat=8
Personal Selling
Advertising
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Advertising Sustainable Practices
Source: UNEP. Creative Gallery on Sustainable Communications.5
Figure 2. CO-OP Sweden for Sustainable Eggs; caption reads: “We’ve stopped selling eggs from cages hens. Take 219
people with you into this bus and you’ll understand why.”
As advertising is quite expensive, retailers often rely on their own magazines in direct mar-keting campaigns6. Food retailers often have direct mailings that they send to customers with special pricing options. CO-OP in Switzerland uses their direct mailing, the CO-OP Press, to present sustainability facts and point out various ways in which their sustainable products have a better quality than other products.
This section previewed a number of different approaches that retailers are using to inform consumers about sustainability. The next section will look specifically at the forms of MIT that retailers are developing to communicate in novel ways with consumers.
5 Available online at: http://www.unep.fr/pc/sustain/advertising/ad/ad_list.asp?cat=all 6 While advertising refers to “paid” advertisements, such as TV or magazine ads, direct marketing is that which the re-tailer produces and sends directly to the consumer, instead of via a paid avenue (Jobber, 2001).
Direct Marketing
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Modern information technologies are a rapidly advancing field that can enable retailers to reach consumers and provide further information to them about products’ sustainability characteristics in an innovative way.
2.1 Current Practices
2.1.1 Internet
The Internet is becoming a normal part of the shopping experience and allows customers the ability to access information whenever they want it. In Europe, a total of 40% of the population is online. 86% of those people research their shopping online and another 42% of the online population shops online (Gagnon and Chu, 2005). In North America in 2004 consumers spent $75 Billion shopping on-line.
Retailers can use the Internet in two major ways to inform consumers about sustainable aspects. The first is through provision of information and the second, a still-developing area, is through enabling consumers to trace a specific product through the supply chain. The following section will describe these aspects of online communication.
2.1.1.1 Information Provider
Retailers can provide information to consumers about sustainability criteria via their web-sites. The Internet increases consumers’ access to information, which can increase knowledge when shopping and using products. Also, providing greater access to informa-tion can increase consumer trust in the products and the retailer (Belz, 2006).
The online information retailers can provide is varied. Examples include :
• What is behind the label
• Range of sustainable products
• Producer interviews
• Production methods
• Product contents
• Commitments to sustainability
• Sustainable use information
• Contact information
2 Modern Information Technologies in Focus
Overview
Examples
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Many retailers are using the Internet. Toyota7 displays a concerted effort to show further information about their hybrid vehicles, their environmental impact, and even how their hybrid system works. Complete with sound effects, hybrids not only become more interest-ing, but also a consumer is compelled by the information they are receiving. Other exam-ples are Waitrose, a food retailers in the UK, and Home Depot, a major DYI retailer.
Using the Internet to Communicate Sustainability
Waitrose is a major food retailer in the UK. It has made a concerted effort to display accessible information
on their website at www.waitrose.com. Through this information, consumers can make informed decisions
about their product purchases, understand organic and Fair Trade, and virtually “meet” the producers and
read organic and Fair Trade news. The website also includes nutritional information and cooking recipes for
organics. Waitrose has found that the information on their website “helps build trust in the brand and with it,
customer loyalty.” Waitorse has also newly launched a debate on organic vs. conventional farming via
Podcast on their website.
Information from: Interview with Michael Simpson-Jones, Waitrose Buyer and Waitrose website:
www.waitrose.com.
Box 2. The Waitrose Website
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Internet and Sustainability at Waitrose
Figure 3. A Wealth of Information on Fair Trade at the Waitrose Website
Internet and Home Depot
The Home Depot, an American DIY, was the third largest retailer in the world in 2004. It utilises its website
to provide the consumer with a variety of information, hosting around 3 million visitors a week! The website
points consumers to more energy efficient products, and even links them to the US Environmental Protec-
tion Agency’s (EPA) website, which explains energy efficient home practices. The Home Depot homepage
also gives consumer tips on design and installation and other home improvement know-hows, which can cut
down on unnecessary wastes.
Additionally, The Home Depot rents out tools, promoting this service on their website. Renting tools as
opposed to purchasing them decreases material use, which is important to sustainability.
The website also elaborates on the corporation’s Forest Stewardship Council (FSC), which is its wood-
purchasing policy, and explains the difference that this policy makes to sustainability.
Box 3. The Internet as an Information Provider at the Home Depot
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Home Depot Website Header
Figure 4. The website, www.homedepot.com is used to promote environmentally friendly products.
2.1.1.2 Traceability Schemes
Outside of providing static information, consumers can use the Internet as a tracking sys-tem, tracing individual products through the entire supply chain.
Added traceability of products via the Internet has the potential to increase consumer trust in the retailer and the products that they purchase, because they can see that the retailer is open about the products they provide.
Furthermore, when tracing products through the supply chain, consumers feel more a part of the chain themselves. Princen (2002) argues that when consumers do not have enough information about production conditions, they are more separated from their consumption; therefore they are likely to make decisions only for self-interested consumption without taking into account externalities, such as environmental and social concerns.
As an indirect effect, increased traceability means that businesses will have to be more aware of their supply chains and know where their products are produced. Because the system has to be developed by the retailer itself, this obligates the retailer to consider its own purchasing practices and to be responsible for the products it offers, encouraging sustainable consumption on yet another level.
While still a new phenomenon, several retailers, such as Albert Heijn and ICA, demon-strate how the tracing scheme functions with Utz Kapeh coffee. At home, a customer can type in the expiry date on the coffee and view supply chain information online. Clothing manufacturers have also begun to offer this service. For example, the MADE-BY organisa-tion in the Netherlands, which works with clothing manufacturers to develop sustainable supply chains, provides a “track and trace system.” The system enables customers to track their clothing through the supply chain. Several manufacturers have signed up to be a part
Why:
-Transparency
-Trust
-Connection
What?
How?
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of the MADE-BY scheme, including Barts, Alchemist, Kids Case, Kuyichi, and INTI Hand-made Knitware.
Figure 5 shows how the MADE-BY traceability scheme works.8 The picture on the left (a) shows where consumers can find the product code, and how they can enter it on their website. Then the right side (b) shows the supply chain information that would appear once the product code is entered. The website shows the manufacturer and the cotton grower, along with how this consumer purchase has made a difference to them.
Example of a Traceability Scheme: MADE-BY
Source: www.made-by.org
Figure 5. The left side (a) displays how the consumer enters in the product information and the right side (b) shows the
supply chain information provided after the product label is typed into the computer.
Example of a Traceability Scheme: Utz Kapeh
Through the Utz Kapeh traceability scheme, retailers can let consumers trace their coffee on their website,
as shown below in Figure 6 from the Albert Heijn stores. While Utz Kapeh mentions that traceability is a
new system and mainly meant for business-to-business relationships, it is developing into a more consumer
friendly tool. Other Ahold stores, such as ICA AB in Sweden, also provide the same service to their cus-
8 www.made-by.org
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tomers.
One of Utz Kapeh’s major interests is in ensuring that they can trace their coffee through the supply chain.
According to Rachel Diender of Utz Kapeh, traceability is important in two ways:
1. For the consumer to see where their coffee comes from.
2. For the corporations that buy their coffee, to ensure that practices abide by regulations, and have
been grown via the Utz Kapeh certification scheme.
Box 4. Traceability, an Ahold / Utz Kapeh perspective
Utz Kapeh Website
Figure 6. Traceabilty portion of the Albert Heijns website for Utz Kapeh coffee. Title reads: Where does your coffee come
from?
2.1.2 Interactive Screens
With interactive screens retailers can communicate extra information to the consumer. There are different types of screens, all of which have similar features but perform slightly different functions.
Radio Frequency Identification Data (RFID) technology can enhance interactive screens, improving their capabilities.
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Radio Frequency Identification Data (RFID)
RFID (Radio Frequency Identification Data) is an exciting concept for integration into the retail sector. Al-
ready used in manufacturing, its newest possibility is in the retail store.
What is it: The term RFID is used for data-carrier technologies and products that facilitate the exchange of
information via radio frequency. RFID operates with a data carrier (Tag) and a data reader. The reader
interprets the technology source from an electromagnetic strip, and unlike barcodes and scanners, can be
read at a distance.
Potential B2C Applications:
• Tracking and Traceability
• Security, ticketing and access control
• Lifetime item ID
• Facilitate recycling, reuse, and reduction
• Animal and specimen ID thorugh food chain
Source: British Retail Consortium, 2006.
Box 5. RFID: Exciting Technology!
2.1.2.1 Information Kiosks
Information kiosks are interactive screens that provide the consumer with a dynamic format for searching information. These kiosks are a common feature at Japanese retailers, and are becoming increasingly popular in the US and European markets.
Retailers can use them to:
• Scan the tag on the product and trace supply information
• Allow the consumer to browse sustainable product criteria
• Test products before purchase
• Order products directly from the kiosk
These functions allow for two important types of communications regarding sustainability.
First, they give consumers access to more information, which increases trust in the retailer and allows them to make more informed decisions about what products they want to buy. For example, Metro uses the information kiosk in their stores to allow users to scan egg cartridges and view the production methods of the eggs (Metro Group CSR report, 2006). Box 6 explains in further detail.
Overview
Benefits
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IBM has developed the “Anyplace Kiosk” that is currently utilized by Virgin Life Care, a US-based insurance company. It uses the kiosks to allow customers to set health goals and track key health data, such as blood pressure and weight and earn reward points. The kiosks, though implemented by the insurance company, are placed in retail stores to create a dialogue with consumers and encourage return visits (Renner, 2006 and IBM, 2006).
Information Kiosk
Figure 7. Information Kiosk from Virgin Life Care
Secondly, as an indirect value, kiosks can reduce unwanted purchases and raise customer value simultaneously. For example, 100 Wal-Mart stores use in-store kiosks to allow shoppers to purchase only one song from a CD. Shoppers can also use the service to create their own CDs. Such applications can have the potential to decrease unnecessary consumption and give the consumer more power to choose their own sustainability re-quirements (Anonymous-Retail Merchandiser, 2005).
Often these kiosks are affixed with a barcode reader and/or RFID reader. They run on computer technology.
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The Future Store
The Future Store relies on a number of different interactive methods, all based on RFID technology. The
Future Store is a combination of the Metro store formats, including their food store Extra, and their depart-
ment store Kaufhof.
The Information Kiosks utilise RFID technology, touch screens, and printers. Products such as eggs and
meat products are affixed with RFID tags and read by the scanner in the Kiosk. The Kiosks display detailed
information about the livestock and egg harvesting methods throughout the supply chain. Other information
and recipes can be seen and printed out on the screen. This information can inform the consumer of better
practices and makes the consumer feel more responsible for their consumption, similar to internet tracking.
Yet, in-store, these applications can have direct purchasing affects and allow customers to take important
information home with them.
Other Everywhere Display screens in the Future Store allow consumers to find sustainability information
about other food and department store products.
Personal Shopping Assistants (PSAs) affixed to shopping carts in the Metro Future Store are utilized for a
number of different functions. PSAs can inform consumers about what sustainable products are near them,
which is very important to increasing product awareness (Vermeir and Verbeke, 2006). Also, if the customer
bought a sustainable product during a previous trip, the PSA can remind the customer to buy it again.
These prompts can cause sustainable product purchase repetition through creating a purchasing pattern
(McKenzie-Mohr and Smith, 1999).
Metro’s Future store has seen positive results from their future store technological applications. It reported
a 60% increase in customer satisfaction and a 30 to 43% increase in share of customers (Garf et al., 2005).
Information from www.future-store.org &
Loeb, Walter F. “A Visit to Metro’s Store of the Future.”
Retail Merchandiser; Jan 2004; 44, 1 pg. 38.
Box 6. Metro Future Stores Interactive Screens
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Information Kiosk
Figure 8. Information Kiosk for Traceability at Metro
Source: Metro CSR report.
2.1.2.2 Personal Shopping Assistants
Personal Shopping Assistants (PSA) are screens that can be attached to shopping carts in retail stores and guide customers through the store. They work in a similar manner to ki-osks and other display screens, with the main difference that these are personalized to meet specific consumer needs. PSAs have a number of uses in the retail store:
• Display marketing, product information and coupons
• Utilize electronic shopping lists
• Obtain shopping history by aisle
• Scan products as customer puts in basket and keep a running total
• Fast and easy check out
PSAs can deliver product descriptions, alerting customers to sustainability attributes. Fur-thermore, they have the potential to keep customers on track with their purchasing, thus eliminating unwanted and unplanned purchases.
PSAs have a barcode reader installed directly in the device which reads products. Cus-tomer loyalty cards maintain consumer information on the card. Customized consumer messages can be delivered via ceiling-mounted beacons, installed every ten feet. The beacons pinpoint customer location and deliver relevant product information. RFID tech-nology can greatly increase the operative capability of the PSA. Stop and Shop is using these systems, as shown in Box 7.
What?
Why?
How?
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Shop Buddies
In 2005 Stop and Shop food retailer “rolled-out” its PSA system, the “Shopping Buddy.” The customer loyalty
card has personalized information for the particular consumer using the device. The screen displays con-
sumer’s favourite items and delivers messages to the customer as he/she is shopping.
Stop and Shop opted for the system because they “wanted to appeal to shoppers while they were in the
aisle and actively making purchase decisions,” notes Susan Shahroodi, direct of development and informa-
tion systems at Stop and Shop. They hope that the system will increase customer satisfaction and loyalty.
From test runs they can tell that customers appreciate the added control they have over their experience.
Internally, Stop and Shop can decrease waste from consolidating all the direct mailings into the technology
system and deliver more customer specific information.
Information from: On Demand Business. Stop and Shop grocery drives sales and boosts customer loyalty
with IBM Personal Shopping Assistant. And Stop and Shop Website:
www.stopandshop.com/stores/shopping_buddy.htm
Box 7. Stop and Shop’s Shopping Buddy
2.1.3 TV Screens
Even though televisions (TV) are not a new technology, their applications within the retail store is a new phenomenon. Food retailers such as Tesco, Asda and ICA have decided to try using TVs in store for short brand ads and store information (Derrick, 2006).
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Using TVs
ICA put a TV in their store to show their commitment to the environment. In one of their retail outlets in
Sweden, the TV screens display to customers that the store is Swan labelled (the widely known Scandina-
vian Eco-Label). Requirements for ICA stores to be labelled with the Swam label include environmental
product selection, access to consumer information, employee training, waste sorting and controlled energy
consumption. ICA notes that it adds the TVs and other information in store to give consumers confidence in
their shopping experience (ICA CSR Report, 2005)
Box 8. ICA Shows its Swan Label on TV
2.1.4 Mobile Technology
Mobiles phones are another new addition to the provision of sustainability information to consumers. This report covers the use of Quick Response (QR) code readers.
In Japan, retailers use QR codes (Quick Response) to transfer product information in-store to the consumer. In Europe, QR code readers are mainly available through a technology called i-mode, pioneered by NTT, and have only been available since 2002.9 Similar tech-nologies have been available in Japan since 1999.
Food retailers like AEON and Ito Yokado utilize QR codes by providing consumers with access to the producers’ websites directly on their camera phone. On the website, which pops on the customers’ mobile phone displays, they see the producers name, picture, and even the production record of their food item. This system provides the consumer with more transparency regarding their food purchases and helps them make decisions accord-ing to which food choices are more sustainable.
Figure 9 shows an illustration of how the mobile device works with the mobile phone and QR code technology. First (1) the user takes a picture of the QR code on the product label with his/her mobile phone. Then, (2) the user is directed to the website, which finally (3) allows the user to “meet” the producer.
9 http://www.nttdocomo.com/services/imode/global/index.html
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Retail Industry and Sustainability
Source: Ito Yokado website; www.itoyokado.jp
Figure 9. Illustration of transparency via mobile phone technology
QR codes are affixed onto a product read via camera phone technology. I-mode technol-ogy allows the camera owner to see easily the information from the website displayed on the screen.
Box Mobile Phone Technology for Transparency at AEON
Japanese food retailer AEON uses mobile phone technology to provide customers with security about their
product purchases.
With their “TOPVALU Green Eye” brand, AEON launched a producer information system in 2004 to enable
consumers to access producer information on 70 products directly on their mobile phones while they are
shopping. AEON wants to develop the service to a larger range of foods, featuring those of local culture, to
include 350 items by 2006.
Tracing products can not only make a difference on the consumer side, but also on the supply side. A key
feature of the system is that it allows consumers to send messages to the producers, who then manage the
comments. Furthermore, the producer must keep a more detailed record of their product chain. Thus,
AEON also aims to contribute to a more efficient crop production.
Information from AEON Sustainability Report, 2005.
Box 9. Use of Mobile for Receiving Product Information
2.1.5 Customer Club Cards
Retailers have used customer club cards for a long time to encourage customer loyalty; sometimes these schemes are called customer loyalty cards. Club cards are generally activated following consumer purchase and offer shoppers special discounts and some-times include a point scheme, depending on the products that are purchased. However,
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with the push towards a greener image, several retailers are taking the club cards to the next level by encouraging sustainable behaviour.
Clubcard System: Tesco
Tesco, a major UK food retailer, has increased the sustainability measures through its Clubcard system,
originally introduced in 1995.10 The Clubcard uses a point system, rewarding the customer one point for
each pound they spend. Each time a Clubcard customer brings their own bags, a point to their card will be
added for each bag they saved. These points are counted as “green points.”
The card is now used to encourage customers to bring their own bags. The new system is part of their 10-
point Community Plan, which is intended to increase “greenness” at their stores and improve their position
within the community. That plan includes a commitment to decrease the number of carrier bags Tesco
hands out by 25% over the next two years. Also, Tesco is phasing in thicker and degradable bags.
Decreasing bag usage encourages customers to think about their environmentally friendly behaviour and
feel like they are contributing to sustainability.
Source: Finch, Julia. Tesco offers bonus to green-conscious consumers.
Box 10. Tesco Uses Clubcard to Decrease Plastic Bag Use
Club cards can also be used in conjunction with Internet systems to increase sustainability measures. BP, in conjunction with the UK non-profit Targetneutral, allows customers to calculate their car emissions on the web, find out how to reduce their emissions and learn more about projects to minimize CO2. The program is part of a push to make BP’s UK fuel tankers neutral. As part of the program, they will make a contribution to the fund for cus-tomers using their Nectar cards.11 The Nectar card is a loyalty card used by a consortium of UK retailers, including Sainsbury’s, Debenhams, Barclaycard, and BP. Roughly half of the UK population has a Nectar card.12 Under the current scheme, consumers can pay only £6 to reduce one tonne of CO2 ; £20 per year.13
2.2 Future Possibilities
2.2.1 Smart Ads
Poster advertisements can now “talk” to their viewers. By using either near-field communi-cation (NFC) or Bluetooth technology, the posters can send messages directly to a view-ers’ mobile phone. Both devices allow the posters to talk to mobile phones, including text, graphics and video. While NFC is cheaper, the extension to Bluetooth technology can
10 The Card up their Sleeve. The Guardian. 11 www.BP.com 12 Ibid… 13 www.targetneutral.com
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increase the distance from which a viewer can communicate with the wired device through he/her mobile phone. Advertisers are excited about the devices because they increase the impact of advertising, increase interaction with the brand and have measurable results (Bradbury, 2006).
Implications for sustainability criteria communication exist, because they could be used in conjunction with sustainable product communication, and allow customers to make in-formed product choices. Communication between the brand is quite important for con-sumers to identify the sustainable product brands and understand them better. Finally, Innovision Research and Technology, an NFC research and development company, ex-plains that it plans on advancing the technology to explain to consumers how to better use and dispose of products. While all the kinks have not been worked out yet, future devel-opment looks promising (Bradbury, 2006).
2.2.2 Window Shopping
To communicate with potential shoppers after hours, a Polo Ralph Lauren store in New York City installed an interactive screen on its store window. The screen is touch-sensitive. It allows passer-byes to browse the selection and order items with their credit cards after the store is closed. In its test-run at the Manhattan store, the information on the screen was specifically designed to publicise the corporation’s sponsorship of the U.S. Open tennis tournament, including links about the sport (Ho, 2006). For example, the same technology can be used to draw attention to the company’s practices related to sustainability.
2.2.3 Holographic Images
While holograms seem to be a “space-age” idea, they may be materializing. Toyota has pioneered the new technology for a new car. Also, museums, like the Maryland Science Centre in the US, are using similar technology to educate the public on earth and science issues (Roylance, 2006).
Toyota has pioneered a futuristic car, which not only runs on electricity, but also includes a new user-product interface, that is easy and fun to use. Toyota’s CS&S car (yet to be seen on the market) employs holographic images, called “Space Touch” - a revolutionary con-cept for user control functions, which allows the user to touch the images and control func-tions such as air conditioning, audio and satellite navigation systems. 14 The interface also enables users to send and receive emails. There is potential for this system to be used to inform consumers about the hybrid vehicles and about energy efficiency matters.15 Still in the concept stage, the CS&S holograph images are an exciting technology for delivering sustainability issues.
14 http://www.toyota.com/vehicles/future/cs.html 15 ”http://www.autoemirates.com/SneakPreview/details.asp?CID=266
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3.1 Findings The MIT sector is developing through a number of different avenues, including the Internet, interactive screens, mobile technologies and customer club cards. Technological devel-opments, such as RFID and i-mode have spawned new ways of interacting with consum-ers.
It seems that MITs on the whole have not quite found their place in the marketing mix yet. Many in-store technologies are more supportive of other types of techniques, such as pro-motional techniques. For example, PSAs often attract consumers’ attention to current price promotions. MITs can, however, strengthen the message to the consumer, by pro-viding an interactive interface, which can hold more information than typical in-store or even beyond-the-store methods, such as the Internet. However, the extent to which con-sumers will use all of the information from the retailers is unknown.
Several benefits, such as the possibility of increasing customer trust and loyalty have been found. For example, the Waitrose Website has been noted as enhancing consumer trust. Stop and Shop is also hopeful that implementation of the PSAs will increase sales by pro-viding information directly to the consumer in the store.
Yet, there is uncertainty about why these techniques should be favoured over others. This uncertainty can be attributed to the difficulty of finding information directly related to these tools. While this lack of data may be more directly related to the novelty of the technolo-gies, it also points to potential areas in which the use of the techniques can be questioned. For example, it is unclear whether the technologies actually do increase sales, especially of sustainable products or whether they do create brand recognition. Furthermore, the lack of data points to investigating the necessity of MIT applications and their extensive growth.
An important potential benefit of MITs that should not be overlooked is its contribution to the consumers feeling part of the lifecycle of the product. In fact, it can be said that MITs are an “interpretive technique” used to convey the product’s journey from the beginning to the end. Box 11 summarises this idea.
3 Findings and Conclusions
Overview
Benefits
Uncertanties
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Interpretive Techniques
MITs in retail nearly parallels the idea of “interpretive techniques” used in the field of sustainable tourism.
Interpretive techniques are important for addressing concepts and ideals, as well as providing information.
They provide information in ways that can create attitude and behaviour change towards sustainability
(Wearing and Neil, 1999). MIT is the perfect mode of enhancing interpretive techniques; the movement for
MIT in retail can thus advance them in this sector.
Box 11. MITs as reflections of Interpretive Techniques
3.2 Analysis
3.2.1 Strengths
The main strengths of the technologies are that they can provide more information to the consumer in a more interactive, and potentially fun way. A study investigating the impacts of in-store technologies found several benefits. These relate well to most MITs and are summarised in Box 12.
Benefits of In-Store Technologies
In a Sterling Group Study commissioned by IBM, it was found that the main benefits of in-store consumer technologies are16:
• Increased purchase
• Increased store loyalty
• Improved consumer experience
Box 12. General Strengths with In-Store Technology Use
Increased interaction between the consumer and the retailer, either at home via the Inter-net or in the store, encourages consumers to become more informed about their purchas-ing decisions. Moreover, this interaction can help establish new brands of sustainable products. For example, personalised consumer information and purchase history used with PSAs and information kiosks, can be used to remind consumers of their previous pur-chase of sustainable products, and explain why it is beneficial to make a repeat purchase. As was found in the Sterling Group Study described in Box 12, increased purchases are likely to result.
Increasing transparency and connecting the supply chain with the consumer can have positive effects – such as increased store loyalty. Making consumers feel closer to the
16 Sweeney, Mike. Online video: IBM Retail On Demand. The Sterling Group Project for IBM. Available Online: http://mfile.akamai.com/7825/wmv/ibmglobal.download.akamai.com/7825/retail/sterling_es.asx Last Accessed: Septem-ber, 12, 2006.
Increased inter-action linked to purchases
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product chain can increase trust in the retailer. Vermeir and Verbeke (2006) found that one of the largest barriers for consumers to purchasing sustainable products was that they felt that their purchase would not have an impact on sustainability. Yet, through applica-tions that increase connectivity, the retailer can improve the consumers’ confidence that their contributions make a difference.
Potentially, transparency can have the effect of encouraging purchasing decisions for sus-tainable products and helping to increase overall sales. Transparency can help increase credibility of product attributes, which can additionally translate into increased purchases (Belz, 2006). Furthermore, transparency can increase trust in the retailer, and hence loy-alty, as is the case with Waitrose described above.
These applications may be an effective addition to the current communication scheme, described in section 1.3. For example, as advertising is currently expensive, these applica-tions may be able to decrease the amount spent on advertising without negatively affecting a company’s sales. The Internet has especially been noted for providing cheap “advertis-ing” for consumers. Furthermore, Metro has already found savings of � 8.5 million, through their downstream applications of RFID. These savings are mainly attributable to quicker ordering and transporting goods. Also, MITs can improve other techniques, such as label-ling. Alerting the consumer to the meaning of the label decreases the extra amount of communications needed for these products and helps decrease retail costs.
3.2.2 Weaknesses
RFID implementation, although largely praised, has also been stalled in several retail op-erations because of performance issues and implementation costs (Gagnon and Chu, 2005). The same study done by the Sterling Group outlined several potential weaknesses of in-store technologies. Once again, most of these are applicable for other MITs. Box 14 summarises the findings.
Increased trans-parency and store loyalty
Potential sav-ings
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Weaknesses of In-Store Technologies
In a study commissioned by IBM, the Sterling Group found the following weaknesses with in-store consumer
technologies:17
• Difficult to use: too complex
• Does not work properly
• Lacks the human contact
• Not linked to the overall store environment
• Does not provide any added information than what the consumers can see at home
• Technology used for technology sake and not necessarily to increase store environment
Box 13. General Weaknesses with In-Store Technology Use
Regarding RFID adoption, the reliability of the reading and quality of the data from the retail environment currently pose key challenges. For example, several retailers note that data received from RFID has missing readings, or may even report superfluous data, such as that from the trash compactor (GMA, 2006). These findings may question the likelihood of realised business benefits of the RFID technology.
Other applications, such as TV screens, are yet to find their niche in the retail sector. One main reason is that customers may generally feel harried in-store and may not even notice the TV screens. The screens have had more successful applications in fast food chains, where people have longer wait times (Derrick, 2006).
While most MITs can save money in downstream applications and in advertising, many of these devices have large implementation costs to retailers and have not yet proven their successes. For example, the Bluetooth technology that can be used for “talking posters” costs up to several hundred pounds. Furthermore, until EU standards are introduced for it, there is currently an expensive licensing fee for RFID technology, which increases the upfront costs of this technology limiting its application within the retail sector.18 Plus, as an IBM/GMA report (2006) found, many retailers are not increasing applications of RFID, for reasons such that it is not financially viable to tag low margin products.
While MITs have been touted for decreasing complexity, the opposite may be true. For example, they seem to make the supply chain shorter, but yet they encourage the addition of unnecessary and incongruous information, which the consumer may not understand.
17 Sweeney, Mike. Online video: IBM Retail On Demand. The Sterling Group Project for IBM. Available Online: http://mfile.akamai.com/7825/wmv/ibmglobal.download.akamai.com/7825/retail/sterling_es.asx Last Accessed: Septem-ber, 12, 2006. 18 British Retail Consortium, www.brc.org.uk last accessed: 12, September 2006.
Unusable data
Unnoticed technology
Expense
Unnecessary complexity
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Not to mention that some consumers, such as older generations, may be less familiar with such technologies, may find them difficult to use, or may be intimidated by them.
The weaknesses in the applications do not mean that there is no potential for use. How-ever, it does point to a potential need to re-think these technologies. The goal of this analysis is to review technologies that specifically communicate to consumers information on the sustainable aspects of products. There may be less costly and more efficient ways to do that than investing in the latest MIT.
3.2.3 Opportunities
Traceability applications have the potential for creating positive upstream effects on the retail supply chain. One can surmise that the greater transparency of the supply chain, the more aware the retailer must be of where he/she is receiving their products from and what the practices of the producers are like.
Additionally, some transparency applications literally bring the consumer together with the products. For example, with the mobile phone i-mode technology, customers at Aeon can send comments back to the producer and receive feedback from the producer, as well. This exchange can make the producer more aware of consumer wishes and demands.
Overall, however, there has been little evidence of actual effectiveness of MITs in terms of consumer perceptions, if they can change consumer behaviour and exactly what benefits they provide to the retailer. Thus, the opportunities may depend on the future results of these applications, and how they affect the consumers’ shopping experience.
3.2.4 Threats
Several threats to the technologies and specifically to their applicability to sustainability measures draw these technologies into question.
Not only do the technologies represent an extra cost to the retailer, but there is a question of where the costs will manifest along the supply chain. RFID and other tracing devises could represent another cost for manufacturers. If this technology is especially promising for sustainability tracing, then manufacturers in developing countries may be left out of the system if they cannot afford such technologies. There is hope. ALCUEFOOD, an EU-funded project for strengthening food traceability and safety between Latin America and Europe has found that some larger farmers can afford tracing technologies. More ad-vanced techniques will not be ready for a few years and remain to be tested.19 Further-more, even the seemingly simple technologies, such as TV screens, have halted imple-mentation because retailers are waiting for brands to sponsor advertising, which has been lacking (Derrick, 2006).
19 ICTupdate. “Targeting ACP traceability awareness via the web.” Available online at http://ictupdate.cta.int/index.php
Summary
Consumer to supplier commu-nication
Uncertainty
Cost to re-tailers
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Of course it is possible that these technologies may increase costs for consumers. For example, instead of the retailer paying to give the consumers information, the consumers may now have to spend extra time researching information on the in-store kiosk, whereas if these technologies were not available, the consumer may have enough information readily available on a sign.
MITs also have the potential to increase environmental problems. One potential problem is that it may increase consumption; hence, increasing resource use. For example, one specific added benefit noted was that these technologies, specifically the PSA systems, “help consumers come closer to their maximum budgets versus initially under-spending.” (GMA/ IBM, 2006) Additionally, an increase in impulse buys may result through the use of smart posters and PSAs (Bradbury, 2006).
Equally alarming, using MITs could potentially create more environmental problems. Elec-tronic devices are very material-, energy- and water-intensive throughout their lifecycle. Electronic waste can also pose a large problem, as it contains a high heavy-metal content (over 50%), 20% plastics, and 10% glass. The high metal content can contribute to the leaching of carcinogenic substances into the soil and groundwater and emission of toxic substances into the air when incinerated or burned without proper filtering systems (EEA, 2005). The following diagram displays the lifecycle of the Internet infrastructure (Kuhndt, et al., 2003). The lifecycle impacts of the infrastructure take into account resource extraction, infrastructure production, infrastructure installation, Internet use, and electronic waste. As the use of these infrastructures increases, more environmental damage may result.
Cost to con-sumers
Cost to the environment
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Lifecycle of Internet Infrastructure
Source: Kuhndt et al., 2003.
Figure 10. Life Cycle of the Internet infrastructure
Another threat that has begun to surface with regard to social issues is that consumer groups are very aware and wary of RFID tag and tracking devices. The American Civil Liberties Union (ACLU) has already threatened to boycott Tesco for using RFID tags (Wil-son, 2006). They claim that the new tags have the potential to spy on customers. Cus-tomer club cards already allow companies vast access to consumer data information. Al-though they are required not to share the information, if governments or courts ask for it, the retailers are obliged to hand it over. Already in the US the government has used such data for ethnic profiling of potential terrorists. With the development of RFID, there is a fear that more information about the consumer would be available, in part because the tags can remain on products throughout their life cycle, collecting data all the way.20 However,
20 The Guardian. “The Card up their sleeve. “
Cost to privacy
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retailers currently using RFID technology on products, claim that the RFID tag can be switched off once the customer leaves the store.21
In store, consumer groups are afraid that the tags will be used to secretly identify the cus-tomer and the items they are carrying or wearing. This fear mainly stems from an incident with the use of RFID to track buyers of Gillette Mach3 razor, which was outfitted with the device to prevent theft. Anyone who picked up the device was then recorded on camera (Wilson, 2006). However, due to complaints by consumer groups, this trial was halted. According to analysts, the technology is not yet ready for individual item tracking on a large scale and will not be ready until at least 2010. However, this threat from consumer groups like the ACLU may create sizeable frustrations for companies wishing to install the tech-nologies.
3.3 Conclusions This paper is only the tip of the iceberg when it comes to researching new technologies to communicate sustainability criteria to consumers. As these technologies are so new to this application and are advancing so, it is difficult to make many concrete conclusions regard-ing these technologies. However, several observations can be made.
On the positive side, these technologies represent a more dynamic way to communicate sustainability criteria to the consumer. Also, they can allow the consumer to search for more information than ever before. MITs have the potential to increase transparency, which is important for increasing consumer trust and loyalty, improving consumer’s aware-ness of the brand. These factors can possibly translate into the purchase of more sustain-able products and the use of products in a more sustainable manner. Indirectly, they may also improve the sustainability of the supply chain. Potential cost savings for the retailer may be realised from the decrease in advertising costs.
On the other hand, there are many unknowns with MITs, which is a cause for concern. Currently, many of these technologies present large implementation costs for retailers, and there is also uncertainty about exactly where all of the costs will end up throughout the supply chain. Furthermore, their potential to increase environmental damage and dis-agreement with consumer groups can cause a large problem. More importantly however, their application in the retail to consumer interface has not yet been proven to be effective, and there is a concern that they will either not be useful to the consumer, especially re-garding the in-store applications. Moreover, there is the potential that they could increase confusion and complexity among consumers. Many uncertainties and questions remain to be answered regarding these technologies.
21 www.future-store.org
Benefits summa-rised
Uncertainties summarised
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3.3.1 Recommendations for Future Research
One component that is clearly missing from the discussion on Modern Information Tech-nologies is any quantitative data analysing their actual influence on consumers’ behaviour. Before these tools could be used as a potential method to convey to consumers environ-mental information about their purchases, MITs first need to undergo basic cost-effectiveness and comparative analyses evaluating their value for the intended purpose. The underlying assumptions that introducing new technologies into a consumer’s purchas-ing experience will increase sales or direct consumers’ attention toward a certain product need to be assessed.
Research is needed to investigate whether the investment into experimental technologies is a worthwhile endeavour from the perspective of the retailer and to answer which tech-nologies serve the retailers’ intent best. For example, such question as whether installing electronic personal shopping assistants (PSAs) on shopping carts yields greater results than placing information kiosks at the store entrance need to be answered.
Typically, while the typical foremost goal of the technology is to increase sales, the re-search effort would be best served by establishing several indicators that can be applied to most MITs and used to compare the emerging technologies. These can include overarch-ing qualitative categories such as difficulty of use, provision of valuable information to the consumer and improvement of the overall shopping experience; and also concrete figures such as rise in sales per consumer with technology use, percentage of consumers utilising the technology and cost to the retailer to introduce the MIT. The retailer could use the information to determine which (if any) MIT fits its competitive strategy and goals.
This research would be best carried out by retailers’ collective organisations or research institutions rather than individual retailers for a couple of reasons. First, retailers usually decide to invest in one particular type of MIT, making comparative analyses within the re-tailer nearly impossible. Secondly, while most retailers are hesitant to invest in novel tech-nologies until the appropriate research showing their effectiveness has been done, con-ducting appropriate research without wide-spread use of the technologies is also difficult. A central body that can track and monitor the use of individual MITs in disparate locations would most likely be the most effective approach.
Once the applicability of MITs for their intended purpose has been established (or refuted), the research institution could look into the feasibility of appropriating the technologies to communicate sustainability criteria to the consumer. We expect that throughout the re-search process, the most useful and robust aspects of MITs will be illuminated, which could be transformed into powerful tools for educating the consumers.
Whilst this paper primarily overviewed the current state of Modern Information Technolo-gies in the Retailer Sector, its findings reveal the lack of concrete data confirming or deny-ing MITs’ place in the contemporary shopping experience and is a call for the appropriate
Basic Research Needed
Parties Involved
Next Steps
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research to be carried out. It is clear that the technological supplements to one’s traditional shopping trip are innovative and plentiful, but their usefulness still needs to be evaluated – with regard to their conventional function of increasing profits first, followed by their poten-tial use of creating more environmentally-aware consumers.
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AEON. (2006). AEON Sustainability Report 2005. [Online]. Available: http://www.aeon.info/eco/report/english/e_2005pdf/e_01.pdf#search=%22AEON%20Sustainability%20Report%22 [2006, August 31]
Ahold. Ahold Sustainability Report, 2004. (2005). [Online]. Available: http://www.ahold.com/media.aspx?id=2182 [2006, August 31]
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Retailer Reports Used Website
Aeon CSR report www.aeon.jp
Ahold Ahold Sustainability Report, 2004
www.ahold.com
BP BP Homepage www.bp.com
Home Depot
Home Depot Home-page
www.homedepot.com
ICA ICA Homepage www.ica.se
Ito Yo-kado
Ito Yokado Homepage www.itoyokado.jp
Ralph Lauren
Ralph Lauren Home-page
www.rl.com
Stop and Shop
Stop and Shop Home-page
www.stopandshop.com
Tesco Tesco Homepage www.tesco.com
Toyota Toyota Homepage www.toyota.com
Waitrose Waitrose Homepage www.waitrose.com
Resources
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LCD Liquid Crystal Display
B2C Business to Consumer
RFID Radio Frequency Identification Data
EEA European Environmental Agency
PSA Personal Shopping Assistant
DIY Do-It Yourself
ACLU American Civil Liberties Union
MIT Modern Information Technology
Abbreviations
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Retailer: Any outlets that sells individual units to the consumer, thus ranging from venues such as mom and pop stores, to major manufacturer stores, hypermarkets, on-line stores, and even TV shopping channels (UNEP et al., 2006).
EU Energy Label: A mandatory label for all large appliances in the European Union. The label ranks the energy use of the electronic devise on a scale from A to E. A be-ing the best energy efficiency.
RFID: Stands for Radio Frequency Identification and refers to technologies that use radio waves to identify objects or persons that have RFID tags (RFID Journal, 2006). This is similar to scanning barcodes, but RFID technologies allow for identifica-tion at a much greater distance.
MIT: Stands for Modern Information Technology. MIT refers to technologies developed primarily in the Information and Communication Technology (ICT) sector. These technologies include product identification tags, mobile technologies, Internet applications, interactive screens, and others.
Definitions