Profits: Re-imagining Retail

The new sustainable business model
November 11, 2010 – 8:55 amBy Director of Insight, Karen Barnes

A lot of large corporations these days are struggling to convert their existing operations into a more sustainable model. They’re becoming more energy efficient, examining their supply chain, reformulating their products, reconfiguring their packaging and conducting full life cycle assessments in their efforts. But what they’re not doing is fundamentally changing the way they do business. Today, there’s a new crop of visionaries who are re-imagining retail and throwing away the old rule book.

You’ve probably heard about Blake Mycoskie of Tom’s Shoes – a five-year-old company founded on the premise of giving away one pair of shoes for every pair it sells. Just a few months ago, the company handed out its one-millionth pair of free shoes in Argentina. Tom’s Shoes are considered “must-haves” for celebrity A-listers, and regularly make the fashion pages of Vogue and Marie Claire.

In St. Louis, Panera Bread’s taking a different approach. Its Community Café is Panera branded, but that’s where the similarity ends. Set up as a non-profit, the café asks people to pay what they can afford, and according to a local journalist, at a recent lunch hour, almost everyone paid full price. According to company executives, about 65% of people leave the suggested price, 10-15% pay a little more, and 10-20% pay less. Those folks, Panera’s people say, are generally those who are struggling to make ends meet. If a patron can’t afford to pay anything, they’re encouraged to volunteer at the store for an hour. The store usually serves between 3,000 and 4,000 people a week. “We’re trying to set an example that corporate responsibility is not just about cutting a check,” said Panera’s executive chairman Ron Shaich. Started in May, the Community Café is now breaking even, and there are even expansion plans for 2011.

Social responsibility is at the very core of these businesses’ existence. It’s not some forced retrofit – it’s their fundamental mission. Even Nordstrom, a well-established brand, has figured out a new way of embracing sustainable values through leveraging its inherent strengths.

So my challenge to you is this: in addition to becoming more energy efficient, examining your supply chain, reformulating your products, reconfiguring your packaging and conducting full life cycle assessments, what else can your company do that’s game-changing yet still allows you to practice what you do best? If Panera can figure out a way to help feed the hungry because it understands how to run restaurants, what can your company do?

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