Listed below are the key technology trends impacting the ESG theme in retail and apparel, as identified by GlobalData.
The emergence of ecommerce platforms has created new opportunities, and Covid-19 has not only accelerated the online shift but also increased the importance of sustainability and ESG concerns.
Artificial Intelligence (AI)
About 1.6 billion tons of food is wasted globally every year, according to the Boston Consulting Group (BCG). To combat this, retailers providing highly perishable foods can implement AI into their business model. AI technologies, specifically machine learning (ML), can help retailers assess food waste in the retail supply chain, improve demand forecasting accuracy, and better monitor when stock replenishment is needed.
AI can also be used to respond to market conditions in real-time, particularly in the event of contaminated foods being distributed. Some innovations in food safety monitoring through AI include the Luminous Group’s creation of an AI software to prevent outbreaks of pathogens in food plantations. Similarly, Fujitsu created an AI model to monitor hand washing in food kitchens following the Covid-19 outbreak in Japan.
Internet of Things (IoT)
The IoT describes the use of connected sensors and actuators to control and monitor the environment, the things that move within it, and the people that act within it. IoT technology can be used to tackle food waste. The United Nations (UN) has set the target of reducing 50% of food wastage by 2030 as part of its Global Opportunities for Sustainable Development Goals.
IoT integrates intelligent sensors with database management platforms to monitor food waste. Eseye, an IoT company, provides tools to tackle food waste and promote environmental sustainability. Eseye uses real-time data tracking to monitor fruits and vegetables while they are growing and assesses their shape, size, and colour. This information helps monitor water supply and predict future crop yield and the optimum harvest date, reducing the amount of stock that is lost before it enters the supply chain.
Refrigeration uses the most energy in a supermarket, accounting for up to 60% of the total electricity consumed annually. However, due to advancements in technology, the amount of energy use in refrigeration is falling.
In June 2021, The Grocer reported that 565 brick-and-mortar supermarkets in the UK found that the energy used in refrigeration had fallen by 20% in five years. M&S deployed aerofoils in its open-fronted fridges to guide cold air down more efficiently. Aerofoil energy strips are attached to the shelves and reduce energy use by 30%.
Vehicles are responsible for the most emissions in processing online orders. In Ocado’s case, its orders produce 73% of the company’s total emissions. As a result, Ocado’s Islington depot will use electric vans for customer deliveries as it works towards “operating the largest fleet of electric vans of any grocery retailer in the UK.”
Restocking the premises will be done using only natural gas-powered large goods vehicles (LGVs), which are up to 65% lower in emissions than diesel LGVs.
This is an edited extract from the ESG (Environmental, Social, and Governance) in Retail and Apparel – Thematic Research report produced by GlobalData Thematic Research.