The paradox of sustainability in retail

Delhaize CEO Denis Knoops discussed the three big paradoxes in retail at the SAS Belux Executive Dinner. In this blog I present the first of these paradoxes: sustainability vs sustainability.

Guest blogger: Ivy Vanderheyden, Marketing Director SAS Belux

Last week I attended the 14th edition of the SAS Belux Executive Dinner, together with 200 executives from different industries. Keynote speaker was Denis Knoops, CEO of Delhaize Belgium and Luxemburg.

Denis Knoops is passionate about many things.  Long distance running, people and quality food are just a few of them. The attendees at the SAS Belux Executive Dinner could experience his passion for superior value in food retail first hand.

Delhaize Belgium is a part of Delhaize Group, a Belgian international food retailer that offers their customers a locally differentiated shopping experience in seven countries on three continents. Superior value and maintaining high social, environmental and ethical standards, is at the core of the Delhaize brand.

Denis talked about 3 paradoxes in retail: Sustainability vs sustainability, E-com vs bricks, Big data vs mass retail. In this blog post I would like to elaborate about this first paradox and the five recommendations Denis shared with us. 

Sustainability vs sustainability

As a global food retailer Delhaize offers thousands of products that they source through a complex and interconnected value chain. Their success depends on maintaining the quality of those products and preserving the trust of their customers. Yet the value chain is being affected by global megatrends such as climate change, resource scarcity, food waste, increase in disease, and changes in consumer health needs. As a food retailer, Delhaize needs to understand these trends to try to mitigate the impacts on the business, while finding opportunities to prepare for the future and improve the positive impact on society and the environment. 

“Companies should prepare for a world where society demands absolute transparency from brands. Businesses which open up their value chains for scrutiny now will earn the most trust from consumers.”

So, according to Denis, how can a retailer keep on growing without losing an eye on sustainability?

Denis Knoops emphasized that businesses and brands need to start taking action now, to prepare for a rapidly changing economic, environmental and social climate. These are his 5 key recommendations:

  1. Take innovative business models to market

    Companies should be ready to innovate and develop, experiment with new, sustainable business models. The companies that do this today will be the ones profiting tomorrow.
  2. Work with your value chain to find new solutions

    Manufacturers and retailers operate in a complex system, and the challenges of shifting to sustainable consumption are too big for any organization on its own. Companies should collaborate across their value chain, to find innovative solutions to bringing goods and services to market.
  3. Strengthen local brands and local production

    There is no guarantee that global brands will continue to win the hearts and minds of consumers. Brands that embrace and boost local production and have a local authentic story will resonate with consumers.
  4. Build up long-term trust through transparency

    Companies should prepare for a world where society demands absolute transparency from brands. Businesses that open up their value chains for scrutiny now, will earn the most trust from consumers.
  5. Use the power of marketing to accelerate sustainability

    Don’t wait for consumers to demand more sustainable products and services. Savvy brands will make money by accelerating the transition to a more sustainable world. Companies should use their marketing, communications and innovation skills to create consumer demand for sustainable and profitable products and services. Brands need to understand possible future consumer needs better to positively influence the things that consumers buy, the way they use them and how they dispose of them.