As climate change and sustainability dominate global headlines, retailers are increasingly finding themselves under pressure to do their part to reduce their environmental impact. The sustainability of an ERP is becoming critical for retailers with studies showing consumers preferences for sustainable shopping, particularly amongst the cohort most vocal about conserving the health of the planet, the Millennial and Gen Z generations. For example, a 2021 HubSpot survey found that:

  • The majority of all respondents, across every generation, expect retailers and brands to become more sustainable.
  • Sustainability is more important than brand name when making purchase decisions for the majority of Generation Z shoppers
  • Generation Z are increasingly influencing their Generation X parents preference to shop sustainable brands and willingness to pay more for sustainable products.
  • Men, Generation X, Millennials and Generation Z are the most likely to make purchase decisions based on values (personal, social, and environmental).

There’s no doubt, findings like these represent a seismic shift in sentiment around sustainability purchasing decisions. And business leaders are paying attention. A McKinsey Global Survey surveyed C-suite executives and investment professionals and found that 83% believe that in five years’ time environmental, social, and governance programs will generate more shareholder value than they do today.

In short, as more people choose to engage with retailers who operate sustainably, it is becoming an imperative for brands to keep pace with the expectations for these next-generation consumers by improving their sustainability practices.

But as the saying goes, it’s not easy being green. It can be expensive and counterintuitive to growth. However, with the sustainability of an ERP, both business and the environment can come out on top.Let’s take a look at the cloud ERP model and where it can step up to drive sustainability.

Reducing waste and costs with improved operational efficiency

Reducing waste and becoming more efficient goes hand in hand. In fact, optimising resources can reduce energy and material waste, and labour costs too.

Better control over inventory

Poor inventory planning can lead to an over or under supply of stock. This not only creates waste; it chips away at the customer experience. On the flipside, ERPs offer a broad array of capabilities to optimise the availability and levels of inventory, helping to keep costs low while meeting delivery expectations. Take the food and beverage sector - a good ERP will help you monitor the shelf life of products and materials. By uniting data and processes in a central database, it provides the advantage of real-time visibility over procurement, production, and distribution. This means you not only have the visibility to know what’s being wasted, you can also pinpoint why – whether it is incorrect storage, transportation, spoilage, leakage, or some other factor – and make appropriate changes. You can also keep tabs on top and bottom sellers, and adjust your product mix to cut out any excesses. Or combine your supply chain information with market and historical transaction data to determine actual demand and plan ahead.

Supply chain efficiency

With better control over inventory and orders, retailers also gain efficiencies in the movement of inventory and orders. For example, to minimise the inefficient logistics activities that traditionally increase a company’s carbon footprint, deliveries can be scheduled using the best routes for speed and efficiency. This helps reduce both CO2 emissions and the time, costs and human resourcing associated with inefficient logistics.

Automating key processes

Another obvious advantage of an integrated ERP stems from automated information flows across the business, facilitating a smoother, and more transparent coordination efforts. Without the unified cross-functional workflows that define cloud ERPs, the ability to make faster, more informed decisions is stymied by miscommunication, misinformation, and bottlenecks.

Reducing carbon emissions by saving energy

Cloud ERP solutions remove the need to manage an on-premises ERP therefore reducing hardware maintenance costs such as electricity usage. This, in turn, helps to reduce the carbon dioxide emissions that contribute to climate change. In fact, a study by green consulting firm Greenspace surveyed NetSuite’s customer base and found that NetSuite saves the equivalent of 423,000 metric tons of carbon dioxide per year or more than more than $61 million in energy bills.

Greater digitisation leads to less paper usage

The costs associated with filing, storing, copying and printing documents add up quickly, as does the impact on the environment. Transitioning to a cloud ERP presents an opportunity to substantially reduce the use of the paper, perhaps eventually going 100% paperless. With all your critical information housed inside the ERP, everything can be digitally stored and transmitted creating a more reliable audit trail and easier, faster access for users. For example, reports can be viewed in real-time eliminating the need for hard copies and ensuring everyone has the most up to date information.

Cloud ERP platforms cut waste through the enforcement of lean production principles that reduce excess materials and inventory and creates more efficient supply chains. This provides a clear competitive advantage and will benefit a retail company’s growth in the long run.

If you’re looking for ways to improve your energy and materials efficiency, and productivity of your business' processes, Annexa can help by leveraging the sustainability of an ERP to tailor solutions to your business’ sustainability needs, provide training and support and ensure the successful implementation of a smart, cloud-based platform.

You can also learn more about cloud ERP and retail with: The definitive guide to NetSuite for retail companies

More than just NetSuite experts

At Annexa, we provide industry-leading solutions customised to the NetSuite platform, including supply chain management. With our in-house integrations, extensions, partnerships and full-service capabilities, we deliver end-to-end solutions for our customers to help them grow and expand their business potential. Contact us today to speak to an expert to learn whether we are the right NetSuite implementation partner for you.

Annexa is a leading NetSuite partner with extensive experience designing and implementing comprehensive and customised business systems, including payroll solutions,financial management ,warehouse managementandecommerce solutions