Increased consumer demand for sustainability sparks technology-enabled business model innovation.

Sustainability continues to be a growing priority for consumers and brands alike. As the planet continues to grapple with the ever-evolving threats posed by a changing climate, embracing business practices that reduce the impact on the natural environment has become a global imperative. 

Consumers have taken note of corporate commitments to sustainability. According to one corporate responsibility study, it was found that a clear majority of Americans expect companies to take action against climate change — and will stop purchasing from companies that do not appear to care about the problem. The same can be said in the UK, where a recent survey found that one-third of consumers claim to have stopped supporting brands that do not embrace sustainability. 

Businesses are reassessing strategies to accommodate the growing consumer demand for sustainability. With more than 90% of CEOs stating that sustainability is important to their company, making sustainability a key business practice doesn’t just leave a positive impact on the environment — it delivers a competitive edge. Considering millennials’ willingness to pay up to 25% more for a highly sustainable product or service, brands that lead the way in following socially responsible business practices can end up building a greater sense of brand loyalty while boosting the bottom line. 

That’s not to say, however, that becoming a more sustainable company is a simple upgrade from traditional product development or service delivery. Between costly upfront investments and hard-to-define sustainable metrics, businesses often find it difficult to find the right entry point to adopting a more eco-friendly strategy. That’s why, when looking to invest in environmental sustainability, it is vital to assess the business through a holistic lens rather than a particular product or business process. 

Fortunately, digital innovation provides a medium for companies to identify and realise new business opportunities that are sustainable yet profitable. From blockchain to cloud computing, digital solutions can help organisations meet their sustainability objectives like never before.

Using Sustainability to Craft Sustainable Business Models 

The commercialisation of sustainable products should not be designed or assessed within the parameters of traditional products. Instead, organisations have the opportunity to take a more comprehensive view of their business practices to uncover innovative approaches to sustainability — and even unlock entirely new business models. 

In Bridging Digital and Environmental Goals: A Framework for Business Action, the World Economic Forum highlights many of the practical methods by which organisations can incorporate sustainable practices through digital transformations. It highlights how sustainability efforts made by some of the world’s leading companies, including Hewlett Packard Enterprise and UPS, by embracing new IT business models and cutting-edge technologies have helped to reduce operational inefficiencies and lower costs.

At Ciklum, we work with some of the most innovative consumer brands in the market. One such case is shoe manufacturer On Running. With the upcoming Cyclon, a zero-waste running shoe made from castor beans, the company redefined its business model entirely as a subscription service. Rather than having customers repeatedly purchase new shoes, only to eventually become worn down and disposed of, the Cyclon shoe subscription provides customers with an eco-friendly shoe that lasts about 600km and gets recycled and replaced as soon as it’s outlasted its usefulness. This innovative model - underpinned by a digital platform developed by On Running and Ciklum - not only helps cut back on wasteful manufacturing, it rethinks the age-old relationship between consumers and brands. 

In a similar fashion, Oddbox, an online food subscription service, helps combat food waste through a creative recurring revenue business that embraces supply chain transparency. In the UK, millions of tonnes of fruit and veg go to waste before leaving the farm because the size and shape of some produce is considered to be unusual. Reclaiming these wasted products, Oddbox delivers regular boxes of oddly shaped but still fresh produce to subscribers across the country. Not only does Oddbox serve an entirely new market for “damaged” fruits and vegetables, it rescues wasted food, reduces water usage, and cuts carbon emissions. This is all made possible through a complex technology stack, developed by Oddbox in collaboration with Ciklum, that leverages automation to allocate stock and manage orders. 

Transforming throwaway vegetables into home delivered boxes and revolutionising apparel as a subscription service are just two examples of how organisations can unlock sustainable opportunities through digital innovation. By embracing the technologies that make these endeavors possible, such as digital platforms, artificial intelligence, blockchain and IoT, organisations can revitalise or revolutionise key business practices to benefit all.

Tomorrow’s Business is a Sustainable Business 

Sustainability isn’t a buzzword -- it’s a key driver of innovation. From railways to semiconductor manufacturers, organisations across all industries are embracing forward-thinking solutions that balance business needs with environmental concerns. And as the risks posed by climate change continue to grow, it’s never been more important to rise to the occasion as an organisation and global citizen. 

In the wake of the COVID-19 pandemic, companies like JPMorgan have recognised the greater need to balance environmental factors alongside traditional business metrics. With consumers and businesses alike demanding that sustainability takes a bigger seat at the table, digital innovation offers an efficient and effective entry point for organisations seeking to replace wasteful business practices with powerful green solutions. 

At Ciklum, we partner with enterprise and fast-growth consumer brands to build digital IP that empowers sustainable development, transforms industries, and changes the way people live. By embedding technology across all areas of the business, the world’s leading organisations can yield environment sustainability as an opportunity for innovation and new growth. 

To find out more about Ciklum and the services they provide to the retail industry, click here.

This article was also published in The Retailer, our quarterly online magazine providing thought-leading insights from BRC experts and Associate Members.

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