The latest report from the IPCC is very clear. Consumers, businesses, and governments must urgently change their ways to prevent a major disruption to the climate and environment within our lifetimes. Limiting global warming to less than 2°C is still possible, but requires “rapid and far-reaching” changes to how we consume land, energy, and raw materials.
No single player holds all the cards, but the relationship between consumers, retailers, and producers is the single most critical arena in the mission to more intelligently manage earth’s resources.
Consumers are the key. Like a vast global democracy, the planet’s 7.5 billion shoppers possess immense power to change the world via choices made at checkout. That positive power can only be fully exercised if the retailers, manufacturers, and software-vendors who serve the global consum-ocracy are willing to establish new systems of transparency in the supply chain.
See the future with a transparent supply chain
The idea of the transparent supply chain has been around for years. Initiatives like FairTrade use verification and labelling to reassure shoppers that their goods are sourced from socially-just markets and give farmers a fair cut of the proceeds. Organic food labelling works on the same principle.
But the notion of the ‘ultra-transparent’ supply chain takes this concept to another level. Ultra-transparency means that the provenance of every product you consume – the food on your fork, the clothes on your back, the battery in your phone – would be specifically traceable down to a minute level of detail. For every product and for each of its components and ingredients, you’d be able to see where it came from, how it was assembled and how it reached you, and then be able to evaluate the social and environmental costs associated with it, if you choose to do so.
Data and CRM software could save our planet
How though? In a world where billions of consumers are consuming trillions of products weekly, implementing this kind of ultra-transparency seems a difficult undertaking. Yet thanks to the advent of digital technologies like scannable-barcodes, RFID tags, and blockchain ledgers, along with dirt-cheap computer processing power and mass-customisable labelling technologies, it’s now a genuinely feasible prospect to imagine a world where many (and maybe most) high-environmental-impact consumer goods could be shipped and sold with their detailed supply chain data embedded within.
But is there any point to this mass-transparency? Wouldn’t this just lead to a further deluge of information in our already data-drenched lives, not to mention a major cost as businesses invested in making their supply chains more transparent?
It’s now or never: The time for transparency is now
Businesses that enable deep transparency and couple it with smart human managers and powerful AI computer programs can optimize their demand patterns, building resilience and sustainability into their supply chain. This saves time, money, and wastage, and adds significantly to operating margins, which is why the shift is already underway. However, the environmental upsides are limited since this kind of transparency is mainly being used to drive competitive advantage (i.e. business vs business), not as a basis for transformational collaboration (i.e. business + business + consumer).
Consumers possess the tantalizing possibility for supply chain transparency to become the catalyst for massive change in human behavior.
Imagine a better world, then go make it
Imagine this: What if we could audit our daily / weekly / annual consumption and see the social and environmental cost of our spending, category by category, item by item, line by line? Imagine doing this not to be judged or guilt-tripped, but to optimize and seek more efficient, less damaging consumption choices.
And imagine if making these choices was made almost effortless by smart recommendations technology (example – “Mr Ballard, click here to update your basket and reduce its atmospheric carbon impact by 26kg” or “If you replace these 3 items with these other ones, you will reduce your plastic consumption by 87g”).
Imagine, each January 1st, receiving an email notification itemizing the environmental and social impact of your consumption over the past year, detailing the improvements you’d made compared to the previous year, plus some recommendations to further optimize your choices in the year ahead.
Or imagine all of this on a app you could check whenever you wanted. Imagine it game-ified. Imagine it social media-ified. Wouldn’t that be an incredibly powerful tool for you, and millions of others, to take control of your consumption and be more environmentally, ethically, and socially responsible with it?
If digging in data like this is not everyone’s idea of fun, perhaps retailers can appeal directly to customers’ pockets, using loyalty and reward technology to nudge lower impact shopping choices. Governments can be involved, too. What about different tax codes, based on resource consumption?
Again, it seems far-fetched, but all of this can be done today. The checkout and recommendations technology is certainly already there. And as more of our spending and consumption moves online, with more of our offline spending mediated via loyalty schemes and e-payments, it’s possible to conceive of an aggregated system-of-record being built based on the entire consumption history of me, you, and anybody else who chooses to participate.
Big challenges and staggering opportunity
Climate challenge is at the top of everyone’s inboxes, waiting to be addressed. Sustainability matters today more than ever. Businesses increasingly talk about being purpose-driven (the ‘triple bottom line’), and consumers are discovering the unpleasant truths and consequences of plastics, meat production, labour exploitation, and fossil fuel use (to name but four examples). It’s the supply chain where all of this meets, and where all of this can be resolved.
Three big challenges need to be overcome for us to be able to establish worldwide systems of ultra-transparency in supply chains and consumption records:
Interoperability and common data models: All commercial producers, manufacturers, wholesalers, and retailers would somehow need to agree to talk a common language of supply-chain and have a common model for evaluating and quantifying environmental impacts. It’s an obstacle, but not an impossible one: Institutions like GS1 the UN and the WTO, exist to facilitate this kind of international, inter-business cooperation, and software vendors are already establishing cross-industry solutions in specific market segments like grocery.
Software that connects and embeds the supply chain and demand chains: Unleashing the democratic power of the consumer requires unseen levels of interconnectedness between supply-side and demand-side data. Standalone retailers like Amazon are getting close, but on the open market, perhaps only SAP, who envision a fusion of their supply chain and software with their customer experience and CRM suite, are coming close to making this a procurable reality. By partnering with industry consensus groups and co-innovating new solutions with its customers, a companies have the chance to take an enlightened leadership position here. They should not sit back.
Consumers’ willingness to co-opt their data: A fascinating topic right now, in light of the succession of scandals and revelations about how social media companies use (and misuse) the data harvested from their audience, and the growing sense of unease about ‘big brother’ style monitoring of our everyday digital data exhaust. And yet, for every adverse application of technology, there can be a beneficial one.
The question of data privacy is not a binary black and white. While I’m personally aghast at the thought of my social media clicks being harvested for nefarious political purposes, I’d be overjoyed at the prospect of my data trails being used (and enabling me) to make a positive environmental impact for future generations.
Together, software and business can help consumers save our world. It’s a staggering opportunity to do good. Leadership is needed. Calling all visionary CEOs!
Learn what effects the current health crisis might have on business strategy, digital transformation, and the future of e-commerce HERE.