2.2.2. Retailers' Phygital Strategies and the Sustainable Smart Store of the Future

The roots of the idea behind the book Sustainable Food Supply Chains: Planning, Design, and Control through Interdisciplinary Methodologies [42] were planted at the Universal Exposition Expo Milano 2015, whose motto "Feeding the Planet" was chosen by combining issues of economic development, agriculture, energy, and sustainability. Within this specific framework, significant research results from the Food Supply Chain Center (FSC) of the University of Bologna, Bologna, Italy, were presented, the Center having been recognized worldwide for its focus on the creation of the decision-support tools aiding the design of the Sustainable Food Supply Chain operations. As shown by the European Retail Academy [43], the need to promote holistic research about food/health/sustainability and to ensure the penetration of knowledge and standards along the total supply chain from farm to fork has led to the signing of a Memorandum of Understanding by two international networks, EQA (Education Qualification Alliance), Bonn, Germany and ERA (European Retail Academy), Roesrath, Germany, in order to institutionalize a Thematic University Network (TUN, concept developed by the FoodNetCenter of the University of Bonn, Germany). Consequently, significant aspects such as encouraging sustainable food production and food consumption patterns, the relation between consumer willingness to pay/the evolution of consumer behavior and the information regarding ingredients and food production processes, taking into account labels' significant impact on consumer demand within the positive-negative asymmetry, etc., were also approached in Romania [44].

At Expo Milano 2015, on the occasion of the SHOP 2015 Conference, Purcarea [45] introduced as keynote speaker the road map for the store of the future and outlined how this challenge can be approached to tackle the problematic aspects that have emerged at the confluence of connectivity and convergence, by considering technological innovation, applications, and success stories in retail to continuously improve omnichannel shoppers' experience. Within this framework, it was recalled that education means life and civilization transmission, and the circular economy was advocated for as a regenerative economic model for implementing new technologies and for research and innovation [46]. This last message was well received, and was noticed recently in a systematic review of the circular economy and bioenergy as they have been addressed by education and communication [47]. As shown later by Bendle et al. [48]), retailers need: to better understand shifts in consumers' awareness (measuring awareness and knowledge), attitudes (measuring beliefs and intentions), and usage (measuring purchase habits and loyalty) in order to consider consumers' willingness to recommend and to search, etc.

Charm et al. [49,50] underlined that within the context of the current pandemic, the majority of global consumers changed their shopping habits—in other words retailers need to better understand this new consumer. Moreover, since the health, economic, and social impacts of the pandemic are not uniform, there are differences in consumer behavior across geographic markets and demographic groups. Nevertheless, to provide a more comprehensive perspective of these changes in consumer shopping behavior arising from the various impacts, the above-mentioned NYU Stern Center for Sustainable Business [51], whose research showed the falseness of the widely held idea that consumers do not buy sustainable products, introduced a roadmap to sustainable e-commerce. They highlighted e-commerce retailers' need to understand consumers' values and assume responsibility for sustainability challenges and opportunities by starting to implement measurable solutions.

According to Accenture's new concept and solution "The Store of Tomorrow" (whose layout has three complementary parts: Aisle, Dark Store and Promenade), retailers today need a new integrated vision for the near future of retailing that includes strategy, data, experience design, supply chain, technology, and sustainability, since consumers are expecting retailers to contribute to greater sustainability, and they also need to optimize their online and offline operations holistically by connecting the dots so that their online-mergeoffline (OMO) model ensures shoppers an omnichannel retail experience in which the store is a crucial part of the overall shopping journey [52]. One of the key ingredients for Accenture's Store of Tomorrow is enhanced sustainability and social responsibility, with the development of the OMO model allowing retailers fix ESG principles (environmental, social, and governance) firmly and deeply across their end-to-end functions. Thanks to this operating model, consumers can make better and more informed choices, with the ESG-related information being provided through digital displays; retailers can drive down their costs while optimizing carbon emissions by accessing clean energy and waste reduction across perishable goods, merchandising, and packaging material; and shoppers are provided with greater choice and convenience in their omnichannel journey, while retailers realize both revenue growth and cost optimization.

In a news interview for the online magazine EuroShop—the World's No. 1 Retail Trade Fair [53], Xenia Giese, the Industry Executive of Retail & Consumer Goods at Microsoft and co-author of the Microsoft/EHI white paper entitled "Sustainable Smart Stores 2021— Digital Sustainability Solutions for Retail", stated: "Many retailers already rely on digital solutions in their 'smart stores', whose operation is based on sensor technology, the Internet of Things and AI-supported applications ... these types of stores are more energy-intensive than shops that do not or barely leverage digital technologies. This has drastically increased the demand for 'sustainable smart stores', which feature digital solutions to improve operational efficiency and to offer more customer services, while simultaneously emphasizing a focus on sustainability ... There is enormous untapped potential in the five relevant fields for sustainable action: head office, logistics & supply chain management, merchandise planning & production, stores, consumers & circular economy ... Innovative solutions offer far-reaching optimization potentials, which usually have positive effects on sustainability and core business processes. For example, the 'Pictofit augmented reality (AR) engine by Reactive Reality' creates a photorealistic custom avatar on the smartphone, offering a personalized customer experience that is designed to attract and retain customers thanks to virtual try-ons. The solution also reduces return rates since customer can virtually try on items with the right fit and dress size based on respective size and fit recommendations . . . "

Without a doubt, today's retailers need to guide their strategic decisions based on correct actionable data in order to ensure a better understanding of the needs of today digitally savvy buyers, who are also channel agnostic. Retailers' phygital strategies (in-store, online, e-commerce, m-commerce) must allow for the personalization of their consumers' journey and the delivery of seamless experiences, personalization, and omnichannel working closely together. This involves monitoring and understanding all the moments and micromoments of consumers' interactions with retailers and brands, holistically thinking about the above-mentioned consumers' journey and overcoming their anxiety and friction [54–57]. Research findings have confirmed that there is an increased concentration of retailers in terms of digitizing processes (by creating a digital representation of physical objects or attributes), including the mode of retailer–consumer communication (social media, text messages, phone, etc.), enabling new business models to emerge with the help of new disruptive technologies (valorizing the digitized data and improving consumer experience). As living through the COVID-19 pandemic has increased social awareness, retailers are

under pressure to better understand explicitly how people, technology, and data come together to inform one another and make decisions. This is becoming rapid a source of survival and differentiation, with the accelerated change needing to be orchestrated and led based on decision intelligence and outcomes depending on business competency in connecting data, artificial intelligence, and analytics [58]. Within the context of established business designs and practices which are amplifying the risk of change, retailers also need to begin their journey toward composable business (composability making change easier, faster, safer, and less costly, while also allowing initiative in pursuit of an opportunity) with composable thinking (introducing, driving and anticipating more change), so as to ensure a new balance of stability (repeatable behavior) and agility (a changed behavior) and gaining control of the risk of either [59]. Recent McKinsey research confirmed that to respond faster to the current crisis many companies embraced agility, which means "moving strategy, structure, processes, people, and technology toward a new operating model by rebuilding an organization around hundreds of self-steering, high-performing teams supported by a stable backbone" [60]. Acting along this path, companies can ensure not only the improvement of delivery and the increase of speed, but also the enhancement of both consumer experience and employee experience. With regard to the challenge of continuously improving the consumer experience within the current crisis, McKinsey recommended for retailers other specific actions beyond embracing an agile operating model, namely: extending shoppability, digital-channel presence, and engagement, as well as ensuring zero friction digital experience; injecting innovation into the omnichannel by bringing more of the in-store experience online and launching or diversifying their delivery mechanisms; transforming store operations and ensuring new safety requirements for both customers and associates; and creating the store of the future as a core component of the omnichannel journey, educating consumers on product offerings, etc. [61].

There is a lack of studies with regard to retailers' digital transformation to aid consumers to adopt more sustainable lifestyles and to make informed choices in the omnichannel world. We therefore analyzed consumers' relationship and engagement within digital transformation on the one hand, and retailers' phygital strategies and the sustainable smart store of the future on the other. In this context, it is important for retailers to address two questions which have not yet been clarified: first, whether their increased concentration on responsibly answering to sustainability as a personal value of consumers (changing their behavior) is facilitating their digital transformation to aid consumers to adopt more sustainable lifestyles and to make informed choices in the omnichannel world; and second, whether a positive influence has resulted from their digital transformation to aid consumers to adopt more sustainable lifestyles and to make informed choices in the omnichannel world.

#### *2.3. The Discrepancy between Consumers' Attitudes towards Sustainable Consumption and Their Behavior in Purchasing Sustainable Products. The Need for Understanding Retailers' Sustainability Journeys*

Consumption patterns have long been recognized as major driver of complex environmental challenges such as climate change and the depletion of natural resources, while the win/win alliance between better consumption and production has long been recognized as being used to promote sustainable consumption [62]. Beyond regulatory and economic tools to influence consumers' choices within this framework, there were also behavioral and communication/information provision tools used towards sustainable consumption. At the beginning of 2020, The Consumer Goods Forum (CGF—CEO-led, and the only organization bringing consumer goods retailers and manufacturers together globally) formed its Product Data Coalition of Action aiming both at the global implementation of a unique product identification system and at ensuring that all IDs can be verified in real time, so that by 2022 all retailers, manufacturers, and platforms follow a common Global Data Model [63]. Consumers (like everyone in the supply chain) will be able to verify in real time the ID (including data on sustainability) of all consumer products by scanning this unique code and accessing data that is centrally captured based on the Global Data Model [64].

#### 2.3.1. Resolving the Challenging Green Shopper Dilemma

The term sustainable consumption is very noticeable in Agenda 21 at the United Nations (UN) (New York, NY, USA) Conference on Environment and Development organized in 1992 in Rio de Janeiro, Brazil [65]. Terlau and Hirsch [66] underlined the need for interdisciplinary cooperation between psychology, evolutionary and behavioral economics, marketing, and other disciplines (anthropology, sociology, neurology, etc.) in responsibly approaching sustainable consumption. They took into consideration the need for better understanding the complexity of measures (such as: to increase consumers' awareness and strengthen their individual responsibility, to improve the communication with regard to sustainable products' quality attributes, to improve consumers' acceptance of the sensory attributes of a sustainable product as regular users of the product category, to generate more transparency and trust by attested certificates and labels, etc.) necessary to influence consumer behavior (recognized for its unpredictability within the supply chain) towards this sustainable consumption, including considering the clear discrepancy (the so-called attitude–behavior gap having as a primary cause the dual action model developed by Daniel Kahneman [67], psychologist and Nobel Prize Laureate in economics) between consumers' attitudes towards it and their behavior in purchasing sustainable products. Choosing as a key predictor of the green buying behavior the attitude (understood as a durable set of beliefs about what predisposes consumers to behave in a particular way toward green products) toward environmentally friendly products, Gupta and Ogden [68] put forward for consideration the level of consumer involvement with environmental issues and the perceived consumer effectiveness as two personal norm conditions to strengthen the link between consumer attitude and behavior. Although as individuals consumers manifest clearly positive attitudes, they fail to execute on these exhibited attitudes by engaging in responsible behaviors (green behaviors, in our case). This identified attitude– behavior gap (between pro-environmental attitudes and green purchase behavior of the green consumer segment) seems difficult to deal with it in prospect, representing a real challenge. That is why Gupta and Ogden underlined that green consumers' behavior can be understood by examining factors influencing consumers' green purchases, with the most accurate market segments being possible on the basis of a mix of the demographic, psychographic, and individual characteristics of consumers.

Johnstone and Tan [69] suggested that consumers' intention to purchase green products may be influenced by their perceptions towards green products, consumers, and consumption practices. The authors identified three types of barriers to consumers purchasing green products (finding it too hard to be green, or being reluctant or resistant to participate in green consumption practices). Orzan et al. [70] made reference to several models used by various scholars to explain sustainable consumer behavior (such as the theory of planned behavior and of values-beliefs-norms), and also to the above-mentioned 'attitude–behavior gap', highlighting among other aspects how price, availability of ecopackaging, and social influences lead to this gap. Moreover, recent research on Europe's leading online platform for fashion and lifestyle Zalando [71] revealed, for instance, that this attitude–behavior gap across all of the assessed twelve dimensions (quality, value for money, brand responsibility, manufacturing, price premium, ethical labor, individual responsibility, influencers, repair, second-hand, disposal, and transparency) is shaping sustainable shopping decisions. Research by Google in partnership with Kantar, on the other hand, revealed that as sustainable living and purchasing become mainstream across the U.K., there is an urge for both businesses and the government to do more, as well as an 'underlying sense of consumer guilt at how cost and convenience are still large barriers to doing the right thing' [72].

According to GfK [73], despite the fact that there is an increasing awareness amongst a large part of consumers regarding the deterioration of the environment through the depletion of resources (with guilty feelings accordingly for their involvement), they nevertheless want options which do not involve significant cost or time or consumption of effort. As a consequence, both retailers and manufacturers are being challenged to understand this

'conflicted consumer' trend in their relevant markets and ensure, at the same time, the delivery of the products and of the expected performance, as well as identification from core areas that would enable a proper answer to the increase in the ecological consciousness of the consumers.

On the other hand, as shown by the above-mentioned study by Accenture and WWF Singapore [27], for consumers in Singapore to invariably make green choices, sustainable options are not sufficient. Consumers are confused by companies' eco-credentials at the forefront of their products, and they want to verify more easily these companies' claims. Similarly, a message recently posted on Twitter by the Centre for Sustainable Fashion [74] showed that: 'Many of China's young consumers think sustainability is cool, but there's a long path ahead to it influencing how people shop'.

According to White, Habib, and Hardisty [75], sustainable consumption can be encouraged by using psychological factors (the so-called SHIFT framework: social influence, habit formation, individual self, feelings and cognition, and tangibility) to maximum advantage (for example, by drawing analogies between a sustainable action or outcome to a familiar experience, since sustainability is an abstract and intangible concept).

The use of the increasing awareness of sustainability to differentiate companies' products (how the product is made, the sustainability benefits offered by the end-product itself, including, for instance, the additional benefit of enabling more sustainable consumption or the creation of more sustainable products and practices) is considered an interesting current development adding greater value [76]. More recently, Somers and Kohn [77], starting from the fact that both consumers' choice of brands and investors' choice of stocks are increasingly driven by sustainability, conducted an assessment (including appraising the efforts made by some well-known brands in the apparel and sporting goods sectors around creating a circular fashion ecosystem) about the fashion businesses (fast fashion, in particular) that are most sustainable. This assessment was based on their chosen social and environmental metrics, and it added the critical concept of disposability to reflect how the products are used. Within this context, a suggestive reference to a representative of Generation Z was made: a 13-year-old girl demonstrating an exemplary attitude towards sustainable consumption. This was within a context in which, as shown by Brown-West [78], according to the Business of Fashion's inaugural Sustainability Index, companies are to a very great extent behind in making progress on sustainability, which is why there is a real need to do better and move faster by demonstrating real public accountability and publicly making known their chemical footprints. This would ensure greater visibility and traceability of their entire supply chains, making significant improvements beyond forming value chain coalitions and collaborations, and setting goals alone.

2.3.2. Consumers' Decision-Making Impacted by Their Perspective towards Sustainability. Helping Shoppers Make Sustainable Choices

As shown by the above-mentioned BIO Intelligence Service [62], from the point of view of the classical description (as a balance between consumers' needs, desires, and product prices), a consumer's decision regarding sustainable consumption can be influenced only by changing either the needs and desires or the prices, with consumers' understanding of their own needs and desires being influenced and shaped by marketers' and advertisers' work. According to Martuscello [79], consumer decision-making and behavior is impacted by anticipation. This in turn is involved with trust, which is an essential element for the coming attraction to brand experiences, a requirement of the social interaction, and a source of customer value.

Starting from the arguments of the American economist and Nobel Prize Laureate Kenneth J. Arrow (who expressed in his 1951 book *Social Choice and Individual Values* that individual choices are based on socially held and shared values), Laurence Busch from Michigan State University, Michigan, MI, USA [80] stated: "Today, we live in a world in which choice is celebrated as a virtually undiluted good ... we can chose from a vast array of items in the local supermarket ... Consumer choice is also seen as a means of promoting

fair trade, animal welfare ... as well as protecting the environment and biodiversity, among other things. In short, choice is seen as both "revealing preferences" of consumers as well as their ethical stances with respect to various issues facing the world today ... ". On the other hand, in the Journal of Consumer Culture (the Europeans), Plessz et al. [81] stated: "Food consumption has become the subject of many prescriptions that aim to improve consumers' health and environment ... we assume that links that connect practices with prescriptions result from evolving social interactions ... This link is not explicit, unique or stable ... The content of environmental norms continues to change ... the connections between environmental 'sayings' and specific 'doings' are topics of debates conducted by a wide range of social actors . . . ".

A systematic review of consumers' motivations to make green purchase decisions [82] identified some key research directions for the future, and revealed, for instance, that from the point of view of the research object, consumers' subjectivity in answering the questionnaire can be weakened to a certain extent if scholars choose those consumers who have already purchased sustainable products as the research objects; that, regarding crosscultural research, there is less related research in a cross-cultural context, since there are obvious differences between developing countries (such as China and India) and developed countries (mainly in Europe and the United States) concerning economic conditions, culture, and traditions, despite the fact that by considering these differences marketers can have access to relevant references to develop differentiated marketing strategies.

According to André, Carmon, Wertenbroch et al. [83], there are more choice options and related information for consumers in the age of Artificial Intelligence (AI) and Big Data, but it is necessary to consider not only different aspects with regard to the need for autonomy in consumer choice (such as constraints required for the solution of the preference for this autonomy, the detraction from consumers' autonomy by automation and data-driven marketing practices, consumers' limited understanding of the stakes because of recommendation systems), but also what the costs of experiencing autonomy in consumer choice are (both this experience and its consequences might be affected by marketing and consumption technologies' automation). Bault and Rusconi [84] reflected on recent advances in decision neuroscience (the neurobiology of choice) by underlining how consumers' individual decisions are strongly impacted by attentional (brain activity linked to the retrieval and comparison of values being modulated by attention) and affective factors which are manipulated externally, while Bell et al. [85] highlighted how the online environment is influencing a complex interaction of emotional factors which are key factors in the prediction of online transactional success (beyond consumers' initial purchasing goals) and which allow for the active of promotion trust and brand loyalty (an antecedent of online brand loyalty being online brand trust) based on both cognitive and emotional factors. They also underlined that to obtain significant consumers' data (such as the type of device used, the specific product desired or needed, the originally pursued motivations, the factors turning them into delayed buyers, and other individual differences), it is necessary to collaborate with online retailers.

In the introductory statement in The Roadmap to Sustainable E-commerce report released in July 2020 by EDF + Business, part of Environmental Defense Fund (EDF), New York, NY, USA, Tensie Whelan, Clinical Professor at NYU Stern and Founding Director of the NYU Stern CSB, underlined companies' tremendous opportunity (as the abovementioned report suggested) to win over the customer base by showing concern for the environment and having awareness that they are members of society through helping shoppers make sustainable choices. In this respect, online marketplaces can be used by e-commerce retailers to provide deeper education about both environmental and health impacts of products purchased everyday by shoppers, which involves including the necessary sustainability information of a product right on its product page, using certifications to highlight shoppers' options, and improving eco- and socially conscious shoppers' engagement by offering them rewards or discounts when they are making sustainable choices [86,87]. On the other hand, RILA, the US trade association for leading retailers [88], showed that in

order to encourage both sustainability strategies and financial performance, the NYU Stern CSB developed the Return on Sustainability Investment (ROSI) methodology, which can be applied as a customizable framework to all types of brands, retailers, and industries. RILA also brought to retailers' attention the current needs of reflecting on waste and recycling and of identifying areas of risk and opportunity at the level of their supply chains while trying to build long-term resilience [89]. In June 2021, the NYU Stern CSB released The Business Case for Circularity at Reformation [90], Reformation being a women's clothing brand and retailer committed to building a more circular global fashion system (including through its partnership with one of the largest online platforms for buying and selling second-hand apparel, the resale brand thredUP, Oakland, CA, USA) and having as a primary objective the reporting of its sustainability impact. Its partnership with thredUP, Oakland, CA, USA (and its insights uncovered by the ROSI methodology) among other aspects, resulted in encouraging consumers' purchasing of new clothing from a sustainability-oriented brand.

Recent research from McKinsey in collaboration with EuroCommerce [91] focusing on sustainability in European grocery retail underlined the growing importance of sustainability for consumers due to the pandemic crisis, and how they understand the critical role played by the food sector in climate change. Alldredge and Grimmelt [92] highlighted the real challenge of better understanding the ever-evolving consumers, arguing that as marketing is a dialogue, it is necessary that companies better align themselves with consumers' values (considering health, social justice, and the climate change crisis), with Chief Marketing Officers (CMOs) preparing for consumer needs' and expectations' constant evolution and rapidly obtaining insights (including from e-commerce sites) concerning their thinking or feeling by using advanced analytics without underestimate consumers' resilience.
