Strategies for effective green retailing

Plus lessons from Coca-Cola, Dell and Timberland

Retailers go green for two reasons. One, consumers favor products they believe are green. Two, it’s the right thing to do.

One in three American consumers are more likely to choose environmentally responsible products, and 70 percent of Americans are paying attention to what companies are doing about the environment, according to an Opinion Research poll. Across the water, two out of three UK adults say environmental concerns influence their purchasing decisions.

Does the time and expense of green retailing to these consumers pay off? The jury is still out on that one, so the smart retailer at least considers going green. Fortunately, good green retail marketing is by definition good for the planet. It’s not greenwashing. To be effective, green retailing actions must be able to withstand reasonable scrutiny. They’re changes that matter, in ways however small, to the planet and your business.

Step one: the inventory
If you want to go green, the first thing to do is conduct a thoughtful inventory of how your business affects the environment. Consider both the obvious and less obvious impacts. Let’s say you sell cars. Obvious impacts include the gas they burn, the emissions they spew and the pile of tangled metal that eventually goes to the landfill. The less obvious effects include the production of electricity to illuminate your lot; the trees that die for your paperwork; and the impact of trucking new cars to your showroom. Less obvious still are the natural resources that go into the vehicles’ parts, the energy produced in refining those materials, and all the subsequent consequences of manufacturing.

With this inventory, you learn pretty quickly the infinite breadth of your environmental footprint. The good news is you don’t have to fix everything at once. The inventory simply introduces you to accountability and defines the scope of areas where you can become more sustainable. (This step also tells you how critics might attack you should you be so foolish as to make overly aggressive green claims.)

With your environmental impact inventory complete, here are some options for going green and some examples of companies that employ them:

Green your product
Any product can be greened up. Downsize the vehicles you sell, for example, and make room for some hybrids. Or use greener materials. Payless Shoes now offers a full line of eco-friendly footwear, purses and accessories that use natural fibers like organic cotton, hemp, jute (plant), recycled rubber and plastic, water-based glue and (for packaging) 100-percent recycled boxes printed by soy-based ink. No metal or pesticides in the sourcing chain and no excess raw material extraction. (Sorry, ladies, no pumps either, but you can still get some elevation, see right.) The marketing benefits are immediately clear: Why else would this post mention Payless? How else would Payless have caught our eye on Reuters?

Green your most visible operations
Whole Foods Market banned the use of plastic grocery bags at its 280-plus stores starting on Earth Day 2008. In the ensuing year, it says it has kept an estimated 150 million plastic bags out of landfills. The campaign helped energize customers to triple their use of reusable bags – themselves made of recycled materials. The company also sells a special reusable bag for $29.99, each sale of which feeds 100 kids in Rwanda. That’s good marketing, and it’s hard to be cynical about feeding the hungry.

Green the building
Timberland opened a “carbon neutral” store in New York City last week with reclaimed wood, salvaged brick, efficient lighting and non-VOC paint. These green features hit the consumer between the eyes. Although less visceral, Timberland’s LEED certifications for its mall stores are also important for green credibility.

Green your energy consumption
Dell, for example, announced last week it gets 26 percent of its global electricity needs from renewable energy sources, up from 20 percent in 2008, and powers nine of its facilities with 100 percent renewable energy. Twenty-six percent doesn’t sound like a whole lot, but the company wisely uses credible third parties to compare itself favorably with competitors in technology and in big business. Dell also uses another tactic…

Buy renewable energy certificates
Renewable energy certificates, or RECs, are commodities that an organization can purchase from a renewable energy producer (solar, wind, biofuels) to conceptually offset the harm the first company’s power sources are causing. Purchasing a REC subsidizes renewable energy production and effectively increases the cost of emitting carbon. It’s of limited green retailing value except in bolstering a claim of progress toward carbon neutrality.

All of these measures can be effective, but they have the potential of doing more harm than good. Few media stories are more withering than a point-by-point analysis (of how a company took its green claims a little too far. So just be careful what you say and how you say it:

  • Modesty is always nice, lest you provoke observers to note all the ways you are not yet green.
  • Align green retail actions with your product. The auto industry needed greening, so Toyota greened an auto, the Prius. Coca-Cola, a beverage company, is vowing to replenish the supply of the world’s most popular beverage: water. Alignment resonates. If your building is LEEDS certified but your product pollutes, your overall message is weak.
  • Try to be correct. The Treehugger blog skewered an Italian architect for a stunning creation billed as the “first zero CO2 office building in Milan.” Among other things, the building is elevated on 13-meter pyramid-like “stilts,” effectively driving occupants onto elevators just to get inside. On a roll, the blog even complained about the carbon footprint of manufacturing photovoltaic panels for the roof.
  • Prepare for surprises. As reported, Coca-Cola until recently assumed that most of its emissions came from manufacturing or its trucks. It discovered the lion’s share came from cold drink equipment – the coolers, vending machines and fountain dispensers. This gear includes potentially damaging refrigerants and insulation and consumes a lot of electricity. This unexpected source accounted for about 15 million metric tons of emission every year – almost twice that of the trucks and manufacturing combined.

These examples should give you some direction in planning your next step in green retailing. Remember, if it’s good for the planet, it’s good for business. Because it’s hard to profit without a planet.

If you’re green, prove it

Green is wonderful, especially if you’re savoring it in the forest on a pillow of sun-drenched moss.

As a marketing term, though, green is getting old. Overuse and spin have dulled the verdant halo. Increasingly “green” label may be warning wary consumers they might be getting jerked around. Same with sustainable, fresh, local, organic, natural, recyclable and energy-efficient.

Consumers do want to buy green, and despite the recession, four out of five consumers claim they do (survey results). Unfortunately, one in three doesn’t know how to verify green claims. Translation: when consumers buy green, often they don’t really know what they’re buying.

Since buyers need information and sellers need credibility, the next wave of green marketing will rely heavily on proof – documentation and certification – just as cars rely on JD Power, and as buildings rely on LEED certification.

Says the Federal Trade Commission: “Claims that a product or service is ‘environmentally friendly,’ ‘environmentally safe,’ ‘environmentally preferable,’ or ‘eco-safe’ or labels that contain environmental seals – say, a picture of the globe with the words ‘Earth Smart’ around it – are unhelpful for two reasons: First, all products, packaging and services have some environmental impact, although some may have less than others. Second, these phrases alone do not provide the specific information you need to compare products, packaging, or services on their environmental merits. Look for claims that give some substance to the claim – the additional information that explains why the product is environmentally friendly or has earned a special seal.”

So what’s the seal of approval for green claims? There are options for niche segments of the industry, but no universal seal.

A hundred years after introducing its venerable seal of approval, Good Housekeeping wants a similar role in green affairs, at least when it comes to consumer goods for the household, like appliances, toys, cosmetics, food, beverages. The magazine is launching a green seal in the April issue.

The nonprofit Green Seal,  unrelated to Good Housekeeping, also covers consumer goods, but skews toward the institutional and B2B market with categories in construction, food service, office products, transportation and utilities. It has been certifying products since 1992. Green Seal’s bona fides are here Certified Green Seal products and services are here.

The Federal Trade Commission doesn’t have a seal, but offers guidelines for avoiding false or misleading green claims, over which it has some enforcement power. Here are its suggestions for businesses trying to comply with its “Green Guides” against deceptive green marketing. It defines terms like biodegradable, compostable, recyclable, recycled content and ozone- friendly.

The data center community is pushing for special LEED standards specifically for power-hungry facilities packed with servers. The criteria would be entirely different from green homes or office buildings., launched by the nonprofit publisher of Consumer Reports in 2005, provides information on appliances, cars, electronics, food and home/garden products. It gives ratings and provides calculators.

Two generally respected labels are USDA Organic for food and ENERGY STAR  from the U.S. Environmental Protection Agency and the U.S. Department of Energy. The Today Show suggests, and

The Boston Globe recently explored this miasma of green confusion around the carbon footprint issue. The article surprisingly revealed that microwaving food (they don’t call it nuking for nothing) is greener than baking it and that bottled water from Fiji or France is probably greener (again, from a carbon standpoint) than Poland Springs. The reason? Bottling plants in France typically use nuclear power-generated electricity, and Pacific Islands plants typically use geothermal-powered electricity. It’s fossil fuels in the United States. Bottom line: tap water is your best bet.

Dassault Systèmes SolidWorks Corp. of Concord, Mass., (disclosure: a client), is developing software that fosters intelligent green decisions long before products hit the market – in the design phase. DS SolidWorks makes widely used 3D computer-aided design software, and the new product, code-named “Sage,” will detail in real time the environmental impact of parts, assemblies and design decisions that go into new products.

The software will feature a dashboard that not only provides information on carbon footprint but also on air impact, water impact and energy consumed in manufacturing. The high-end version will roll up the impact of a product across its environmental life cycle and also include information on energy consumption throughout a product’s usage phase.

So those are all the yardsticks. Are you unconfused yet?

Even if we could objectively measure, certify and label products from a perfect set of all-encompassing green standards, we’d still have problems like this: Which is better, buying a new eco friendly hybrid or driving your oil-burning microbus into the ground?

In the meantime, if you’re marketing a green product that’s really green, go to one of the authorities, document your environmental impact, and get certified.

Biofuel needs a new message

Biofuel startups have a messaging problem. Everyone from scientists and environmentalists to economists and ethicists are hammering the industry in a near-daily barrage of bad press and damning research studies.

I won’t spill the entire rap sheet against biofuels – you can read about them here or here for starters – but to summarize the key points affecting public perception:

  • “sustainable biofuel” is an oxymoron: it takes far more fuel and energy to produce than it delivers
  •  production actually causes more greenhouse gas emissions than it eliminates
  •  it takes farmland away from food crops, increasing prices and world hunger, and
  •  it contributes to rainforest deforestation, to name just a few offenses.

These problems are primarily the domain of first-generation biofuels produced from food stock like corn, soybeans or palm oil. Whether its indictments are fair or not, the perception taints the entire industry, including more promising second-generation alternatives such as cellulosic ethanol (which relies on non-food biomass like agricultural waste products and wood chips) and algae-based biofuels.

Yet the industry’s only response is the same old message it’s been touting since day one: Biofuel helps reduce our dependence on foreign oil.

Important as energy independence may be, the message is ineffective. It’s a macroeconomic abstraction at a time when people are struggling with tougher problems closer to home… like having a job, healthcare and a place to live. It doesn’t give me a good reason to care. Besides, don’t solar, wind and other more clean energy industries have a more attractive hold on that same message? And for transportation fuels, electric and hybrid plug-in vehicles rule the day.

Weak messaging combined with the steady drumbeat of detractors has caused the biofuel industry to lose control of the debate…at their own peril. I don’t have the answer to biofuel’s messaging problem. But if asked, I’d steer the discussion this way:

Doing nothing is not an option – First, re-assert biofuel’s essential role in renewable energy diversity. The messaging needs to convey that while it may not be a perfect fuel; it’s certainly a better fuel. Detractors may fling their arrows, but what’s the alternative? Our oil addition may ebb as new green technologies catch hold, but it won’t go away in our generation. Do we just keep pumping and mainlining dirtier fossil fuels into our cars, homes and industries indefinitely? The messaging needs to communicate that doing nothing is not an option. No single renewable energy option can solve all our problems. Biofuel is a necessary part of our clean energy stew.

Make it personal, keep it local – The biofuel industry needs to get beyond its national energy independence message and explain how a well structured biofuel ecosystem can benefit local economies and, ultimately, people’s lives by:

  • creating jobs in feed stock, production and distribution, and
  • reducing the negative impact on local environments.

In our state of New Hampshire, for instance, the North Country’s economy is reeling from the collapse of the pulp and paper industry. Biomass production from waste wood would not only bring jobs and spur new ancillary businesses, it would lead to better forest management, which boosts tourism. Companies like Pacific Biodiesel and organizations like the Sustainable Biodiesel Alliance promote small scale, community-based biofuel production based on local feedstocks, local production and local distribution of sustainable fuel. In other words, “grow it here, produce it here, use it here.” The messaging needs to communicate how biofuel can positively impact me and everyone else at a personal level.

Rebrand – Lastly, biofuel startups need to directly address the early missteps and knocks against the industry openly and honestly. Acknowledge the problems and show what you’re doing to fix them. Continued support for current first-generation corn-based ethanol production is a non-starter. It’s an unsustainable industry propped up by bad public policy and pols beholding to the agri-biz lobby and Iowa caucus goers. It’s a battle that can’t be won in the long term.

This requires re-branding. Second-generation biofuel companies need to set themselves apart from their first-generation legacy with branding that communicates how they are different…how they are better. The branding should communicate the industry’s future vision. Today, biofuel startups attempt to differentiate based on their intellectual property and production methods. But who really cares which bacteria or enzymes are best for digesting cellulosic biomass, or which algae strains yield the most oil? Most of us don’t. We have faith you’ll figure out the science. Just show us the way forward.

The growing attacks on biofuel could have the negative effect of stymieing national and global biofuel policies at a time when breakthroughs in sustainable biofuel production are nearing commercial reality. The biofuel industry needs to reclaim the megaphone and deliver a clear, crisp message that communicates its benefits in a personal way.

eBay might be kinda sorta green

eBay is going public about going green (surprise), announcing a Green Team “committed to doing even more to help the world buy, sell and think green every day.” But will the green tint stick?

Well, they’ve got a huge solar power installation. Their business happens to promote reuse, which is better than recycling. They pay for cradle-to-cradle packaging and carbon credits. And who’s to say their heart isn’t in the right place? But beyond that…?

Well, there are plenty of newly manufactured consumer items for sale on their site. A lot of small parcels zooming all around the world 24 x 7 (some $2,000 in goods per second, in fact) doesn’t do much in the way of reducing fossil fuel consumption. And, as the New York Times points out, the ad campaign will be on virgin paper. Ouch! The article proves yet again that even modest pretensions to green goodness are subject to scrutiny.

Credit eBay for doing some good work. But from a marketing perspective, it’s hard to own the green leadership mantle when, by all appearances, your carbon footprint is about the same as everyone else’s.

What PR isn’t – nine things

Most people equate public relations with media coverage and publicity or confuse it with advertising. They’re selling it short – way short.

1. PR isn’t narrow, it’s broad.
Public relations – properly practiced – takes into account every single stakeholder (or “public”) an organization deals with in its daily life. Employees. Consumers. Local communities. Local/state/federal governments. Bloggers. Partners. Policy makers. Channels. Reporters. Industry analysts. Buy- and sell-side financial analysts. Stockholders. Literally, everyone an organization touches. There may be different levels of priority, but they all have to be factored into the mix.

2. PR isn’t self-serving, it’s serving others.
Public relations has a broader – and more strategic – agenda. It’s all about earning a trusted reputation with stakeholders by acting in their best interests – not the organization’s own myopic agenda. An increasing number of smart companies are adding corporate social responsibility to their agendas for this very reason.

3. PR isn’t advertising.
Advertising exists to sell. Advertisers can communicate whatever they want (within reason of course) because they pay for it. They can decide what they want to say, where they want to say it and how often they want to repeat themselves. It’s a controlled process.

By contrast, public relations is an uncontrolled process. It’s an adventure, shifting constantly as it mirrors real-time happenings.

4. PR isn’t best at awareness building.
There are lots of ways to build awareness. PR’s “secret sauce” is its ability to build credibility.

5. PR isn’t sales, but it influences sales.
Some people confuse search engine optimization (SEO) with PR. They’re two completely different things. SEO is focused on optimizing a Web site to increase targeted traffic. PR is focused on earning a trusted reputation which in turn creates positive word-of-mouth.

6. PR isn’t publicity or marketing.
Public relations is typically relegated to the marketing function. This organizational structure may reflect the perceived role of PR within an organization, namely that it exists to help market products and services.

While promoting products and services may be a piece of the PR pie, it should never be its sole focus. When it is, public relations becomes a lower-level function called publicity.

7. PR isn’t one-way, it’s two-way.
When you send out an e-mail blitz to a prospect, run an online banner ad or issue a news release, these are all examples of one-way communication. The message is crafted and pushed out. These are closed-loop systems.

By contrast, true public relations is an open system and a two-way process. The goal isn’t simply to communicate, but rather to be understood and believed. To affect this attitudinal change, continual conversations must take place between the communicator and message recipients (publics). If companies/organizations don’t listen well or engage in open, honest dialogue with the people they want to influence – and change behaviors when necessary –trust isn’t built.

8. PR isn’t fabricated.
The technology industry learned a valuable lesson with the dot com bust. If you spin stories that aren’t true, the fabric doesn’t survive many wash cycles.

Effective public relations isn’t rooted in hype. People are smart and instinctive; they quickly figure out when unfounded claims are bogus. When they do, brands suffer damage.

9. PR isn’t about “me,” it’s about “you.”
To become a successful brand, a product or service must become a personal, positive thing – an individual experience – something that feeds a person’s own self identity.

Great PR is focused on helping a company strategically figure out how to deliver a consistent brand experience, which in turn, yields a community of interested, involved participants.