1. The Role of Retail in a Sustainable Future FoodProWest - 2010 June 4, 2010 - Burnaby BC May 5, 2009

2. Collage (From the French coller, to stick) is regarded as a work made from an assemblage of different forms, thus creating a new whole.

3. In On Around

4. www.dig360.ca 19 Health & Wellness  Driven by Boomers  Physical Health & ‘Looking Good’  Younger Canadians concerned with healthy eating and exercise  Childhood obesity a looming issue

5. The Body Shop changed the world once

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8. Retail is Theatre Retail is People Retail is Logistics

9. www.dig360.ca Complex systems Retail shapes shoppers Shoppers shape retail

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12. 12 25% of retail = food & bev Canada (1997 - 2007) Source: Statistics Canada (Trade Group) 25% 7% 34%

13. 13 Two retail worlds Chain Stores (3+ Stores) 2/3 $ Sales  Large Retail has clout & influence  Small Retail has entrepreneurship, flexibility, adaptability  All Retail is part of the Larger System

14. www.dig360.ca Types of retail competitors Mom & Pops (Self employed) Growth start- ups & concepts* Chains The majority At risk (but continuously emerging) Fewer in number Catalysts for retail innovation Concentration of Sales $ Greatest influence

15. 15 Strategic evolution 1994 - 1996 Strategy = Buying Season 5 Year commitments “We walk the floor” Insular Beginning of competitive boom Minimal technology “We know” Retail = formula Few tools 2010 Strategy = LT Planning 3 Year commitments Data-driven Help from outside Perpetual new competition Tech impacting all aspects “We need answers” New skill-sets Many affordable apps

16. 16 Retail strengths and weakness  Strong: on tactics and short-term strategy, adaptation to its ‘environment’ and adopting new tactics.  Weak: true innovation, organizational change, long-term vision and strategy.

17. 17 Canadian Retail Sales % Change 1999-2009 Source: Statistics Canada % change in dollar sales from prior year

18. 18 Canada is under-competed  Just 11 of top global 250 are Canadian  Only 7 of top global 20 are in Canada today  Foreign retailers often choose Canada as warm-up for US  Outperforming US past few years

19. www.dig360.ca Retail strengths and weakness  Stronger: on tactics and short-term strategy, adaptation to its ‘environment’ and adopting new tactics.  Weaker: true innovation, organizational change, long-term vision and strategy.

20. www.dig360.ca What keeps retailers up at night?  Technology  Inventory management, supply chain  Sales growth, expansion  Doing more with less  Staffing  New channels and competitors  … and Sustainability

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23. 21 Community  Not just your neighbours  Social networks & media  Building community with your audiences… but also enabling them with each other

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25. 34 Retail relatively benign

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27. “Development that meets the needs of the present without compromising the ability of future generations to meet their own needs".

28. www.dig360.ca 20 Shoppers want green plus plus  …Price, Quality, Convenience, Design  Expect brands to “be good”  Often a paradox in the same shopper.

29. www.dig360.ca  Green high on public agenda  Must help bottom line  Catalyst is price curve

30. www.dig360.ca 34 Sustainability drivers  Waste Reduction – cost savings  Labour Market key  Not green product sales  Health + kids excepted  Price falling will help  Risk management, Regs  Brand differentiation  Avoid falling behind  “Right thing to do”

31. www.dig360.ca Possible barriers… (from DIG360 Retail Cares Study)  Customers not paying for it.  Lack of human resources  Budget restraints  Lack of time  We are doing much already; there are diminishing returns to our efforts.  Customers not demanding it  Difficult to make a business case

32. 32 Green retail activities (Executive survey from DIG360 Retail Cares Study 06) More common  Reducing waste in operations +/or reducing energy use.  Offering environmentally friendly products to consumers  Mandating eco-friendly packaging  Developing or designing green products  Incorporating green procurement of supplies and services. Less common  Supporting specific environmental groups  Conducting green building and design (such as LEED)  Many mall-based / leased premises  Using green power  After sales environmental product stewardship  Public accountability reporting  Participation in carbon offset programmes

33. www.dig360.ca Org charts matter  Where in the organization does sustainability lie?  Are the messages and measures in sync?

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38. 2010  Global leaders continue to lead  Grocery at front of categories  Canada ??  Waste reduction = bottom line  Moving to product and package  Pushing back on supply chain

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44. Those stuck in the middle at risk

45. www.dig360.ca Three levels of true green

46. 46 Collaboration & co-creation

47. 47 Influence

48. 48 Suppliers will produce green at great price great quality great design great convenience This will happen

49. www.dig360.ca Sustainable Retail  The next transformative catalyst!  Similar to Internet in 90’s

50. www.dig360.ca Lessons from Internet adoption Disruptive or Transformative? 199420091999 Dial-up, bbs email Publishing “Yellow Page” Netscape “Retail Dead” New Economy Ecommerce Alt. Channels DSL Rich media Multi-Channel Web 2.0 Alt Platforms

51. www.dig360.ca Suppliers  Get on the curve  Anticipate more and more demands from regs and shoppers via retail  Seek to collaborate  Understand who is making decisions  Green at great price  Packaging, Life cycle

52. Thanks! For more information, contact: David Ian Gray DIG360 Consulting Ltd. davidiangray@dig360.ca www.dig360.ca Follow on Twitter: www.twitter.com/davidiangray May 5, 2009 davidiangray@dig360.ca www.dig360.cawww.twitter.com/davidiangray