Green-Eyed Retailers

January 17, 2014  by in Business Strategy, Industry   

By Powell Slaughter

SOME BIG NAMES IN FURNITURE RETAILING MAKE SUSTAINABILITY A PRIORITY

If you think paying attention to sustainability is more trouble than it’s worth at your store, be aware that retailers with far-flung operations believe it’s an investment in the future. And they won’t be shy about letting consumers know what they’re doing. Tamarac, Fla.-based City Furniture, for example, completed its sixth LEED-certified store late last year. LEED—Leadership in Energy & Environmental Design—is the U.S. Green Building Council’s standard for energy efficient building design.

The retailer’s proprietary Kevin Charles upholstery line uses soy-enhanced cushioning, which takes the place of petroleum-based foams; and City also is examining the possibility of converting its truck fleet to operate on compressed natural gas. “We aren’t ‘tree-huggers,’ but it’s the right thing to do balanced with business sense,” City Furniture President Keith Koenig said during an interview at last October’s High Point Market.

ROLLING OUT

Late last year, Ethan Allen, which had fulfilled registration for the American Home Furnishings Alliance’s Enhancing Furniture’s Environmental Culture (EFEC), began extending the program into its retail operation. That process should be complete this year.

“Ethan Allen has certified our entire retail home delivery center operations under EFEC and we are now working on our retail design centers,” said Chairman Farooq Kathwari. “The company has also certified our manufacturing and distribution operations under EFEC, and then took our manufacturing to the next level with the Sustainable by Design (SBD) designation.”

While Ethan Allen used its EFEC experience with manufacturing and distribution for certifying the retail home delivery operations, Kathwari said the retail design centers do present additional challenges, especially the scale of the company’s store network.

“With 150 design center locations it requires more conformity between locations and more statistical sampling to ensure locations have met the requirements,” he said. “We have decided to continually sample the retail locations as a method to ensure that the requirements are being met. To do this we have set the requirements, trained on the requirements, and continue to audit the requirements.

“Another challenge is that our retail segment is staffed differently than our manufacturing divisions that have dedicated associates in place with environmental compliance backgrounds who can lead the EFEC requirements,” Kathwari said. “We therefore, for retail, have a focused auditing and training program in place supported by regional EFEC team leaders. These team leaders were established to help focus the efforts across a region and to also work with the other team leaders to maintain consistency across the division.”

Ethan Allen’s retail training focus is twofold: to establish and maintain the practices to meet certification; and how to communicate to the consumer what the company is doing as a company in being environmentally responsible.

“The relevance to the product seems to be the key driver for retail, more so than the certification itself,” Kathwari noted. “We already started preparing for it and feel confident we can achieve EFEC certification in 2014. We have a training plan and supporting testing plan we are implementing. All our associates see this as an important initiative so as any challenges arise we have a lot of creative energy to find solutions.”

A WAY OF DOING BUSINESS

While Room & Board has a strong customer following that appreciates the responsible way the 15-store, Minneapolis-based retailer does business and the eco-friendly product it carries, going greener was more of a business decision, according to Steve Freeman, the retailer’s vendor resource manager.

“We did it mainly because we find working overseas can be difficult at times,” he said. “That’s not to say we don’t have some good foreign vendors. These days, though, the price difference for sustainable doesn’t mean as much cost difference” at Room & Board’s price points.

“We try to keep our sourcing as local as possible, and while we don’t push that, there is a sustainability factor when you look at transportation impact,” Freeman continued. “We’ve done these things just because that’s the way we want to do business. We changed our lighting to LED—there’s a cost to do it, but the payback in energy savings is there over time.

“We’ve gone to re-cycled packaging because it costs us less than taking it to the dump. If you gain a little marketing edge as a result of those things, so much the better.”

CHALLENGES/BENEFITS

What are the costs and challenges involved for a retailer who wishes to move toward a sustainable, environment friendly operation, and what do they need to include in their planning process moving forward? “The costs are variable and a component surrounds the time consumed training our associates,” said Ethan Allen’s Kathwari. “But we have found that with the return on recycling and reducing energy costs at each location, the cost is more of an investment that does generate a real ROI over time.”

Sustainable Furnishings Council Executive Director Susan Inglis said both costs and benefits of flooring sustainable product vary tremendously. “Anything that is certified is going to cost more, but often the choices do not cost more—wood that is legally harvested from well-managed forests, bamboo and other rapidly renewable resources,” she said. “And the benefits are varied, too: There is the matter of an improved future in the long run and in the immediate future. It can be challenging to be concerned about the future—cancer caused by exposure to a toxins off-gassed from furnishings does not show up quite as immediately as flu caused by exposure to a certain virus. “Similarly, the prospect of our grandchildren’s having a very different life from ours because of climate change is hard to imagine. But the benefits of non-toxic and low-impact furnishings include exactly these hard-to-imagine futures: less cancer in our families, and affordable consumer goods even in a future that will include higher costs of insurance, higher costs of food, water scarcity, decreased water quality and other ecological problems.”

In addition to its high-end upholstery business, Mitchell Gold + Bob Williams operates 20 retail stores. Mitchell Gold, co-founder and co-chairman, believes the costs of going green are negligible, especially compared with the consequences of not doing so. He’s fairly outspoken on the topic.

“What is the cost to destroying our environment?” he said. “If you believe in rapture and don’t care, that’s a seriously flawed approach. We are seeing the cost to climate that is wreaking havoc on our lives and businesses.”

FINDING SUSTAINABLY SOURCED GOODS

What are the barriers to flooring ecofriendly goods? Gold summed it up in two words: “Stupidity and greed.” He added that it’s almost impossible to floor 100 percent sustainably sourced goods. “Yes, you can ‘go half-way’—consumers are very interested in having the choice,” Gold continued. “They would rather be shown a range of products including those that respond to their own environmental concerns, than not to be shown any with that sort of story. They actually tend to have more respect for a company that at least offers them a choice.”

Freeman at Room & Board said its easier now to find products made in wood that’s certified as sustainable. “It’s not affecting our pricing a lot, but we’re in the mid to upper price ranges so it’s easier for us to absorb any extra cost,” he said. “Because we stay with product made in the U.S. for the most part, it’s easier for us to make sure vendors are doing what they say they’re doing. “I think some manufacturers think sustainable materials may cost them more than it really will. … I was born a skeptic, so I’ve always asked more questions than some people would like. If a supplier says they ‘can’t,’ there’s someone out there who might be able to get what you want.”

Room & Board’s approach is that environmental responsibility is a by-product of business practices that have worked for the retailer. “We feel we have a strong customer following that appreciates the way we do business, but we did it mainly because we find working overseas can be difficult at times,” Freeman said. “That’s not to say we don’t have some good foreign vendors. These days, though, the price difference for sustainable doesn’t mean as much cost difference” at Room & Board’s price points.

“We try to keep our sourcing as local as possible, and while we don’t push that, there is a sustainability factor when you look at transportation impact,” he continued.

“We’ve done these things just because that’s the way we want to do business. We changed our lighting to LED—there’s a cost to do it, but the payback in energy savings is there over time. “We’ve gone to re-cycled packaging because it costs us less than taking it to the dump. If you gain a little marketing edge as a result of those things, so much the better.”

 

REGULATORY CLIMATE

Air-quality and fire-retardant issues regarding home furnishings have made headlines of late—and could make retailers think about environmental concerns whether they want to or not. “We just went right to CARB 2 compliance even before anyone had to be CARB 1-compliant,” Freeman said. “The same thing is true with all these regulatory issues—we’re staying in front of regulations. Make sure consumers are aware of what you’re doing and why. “Rules and regulations change, new products reach the market. It’s harder for smaller retailers and manufacturers to keep up. They’re wearing all the hats, opening the store, running the day-to-day business.”

 

“I think some manufacturers think sustainable materials may cost them more than it really will.”

STEVE FREEMAN
Room & Board

 

“All our associates see this as an important initiative so as any challenges arise we have a lot of creative energy to find solutions.”

FAROOQ KATHWARI
Ethan Allen

“(Consumers) would rather be shown a range of products including those that respond to their own environmental concerns, than not to be shown any with that sort of story.”

MITCHELL GOLD
Mitchell Gold + Bob Williams