I discuss how retailers are simply struggling to survive under enormous pressures to find ways of delivering growth in a difficult climate in this months Retail Focus column.
The government has pushed ahead with its new sugar tax in its bid to tackle obesity and help reduce the nation’s waistlines – though after consuming copious amounts of chocolate over Easter, the sugar content of soft drinks may hardly register.
While the new levy will hit those with a sweet tooth, it is consumers with a conscience that have, traditionally, paid the price. Want to support brands that are socially responsible? You’ll pay more. Buy organic – pay more. Make ‘green’ choices in the products you purchase – pay more. ‘We can’t afford to shop at any store that has a “philosophy”!’ Although these words may come from the iconic, albeit fictional, cartoon matriarch Marge Simpson, when discussing where to go shopping, they capture the sentiment perfectly.
But the focus is shifting, away from the cost to consumers of being ethical and towards the price that retailers are likely to pay for a failure to demonstrate a strong moral stance. At the same time, the question of what it truly means to be ‘ethical’, and how retailers should respond to this increasing scrutiny, is an interesting one. Recent full-page ads depicting a (seemingly) contrite Mark Zuckerberg pleading for forgiveness over data harvesting claims show how even the mightiest can fall when faced with the wrath of a duped public.
Of course, the concept of Corporate Social Responsibility has been around for a while. But where before the focus was primarily on environmental credentials and ethical supply chains, it has now taken on a more holistic mantle. Consumers are no longer simply demanding to know exactly how and where products are manufactured. Like retailing itself, it has become more about taking a 360 degree approach – encompassing diversity, morality, environment, provenance, workers rights, and declaring specific ambitions to make a change for the good.
Many large corporations could take inspiration from smaller retailers, who have led the ‘quiet revolution’ of transparency and conscience, pushing it not as part of their brand but as intrinsically in their DNA. Organisations like Hiut Denim, a fashionista-favourite high-end jeans manufacturer that harnesses local skills and craftsmanship in its hometown of Cardigan in Wales. Previously home to a factory that produced jeans for Marks & Spencer, the town boasted workers with artisan skills and Hiut Denim’s founder David Hieatt focuses on this heritage as a key part of his brand.
One example that is particular pertinent, as I prepare to head to Montreal later this month, is Canadian fast-food chain Tim Hortons. This brand has moved away from the ‘quick and dirty’ side of fast food, instead focusing on boosting its community credentials, acting as a friendly neighbour rather than a faceless corporation. But sadly, even such bighearted brands can have a dark side, and recent news one of its franchises is scrapping its paid breaks for workers has put a question mark over its true ethical commitments. Can a company that (somewhat ironically) relies heavily on coffee-break sales scrap this perk for its own employees? After all, if other employers followed suit, Tim Hortons may find its coffee machines grinding slowly to a halt.
In a similar fashion, consumers are now quick to hit retailers the ‘hypocrisy’ tag. Launching an instore recycling initiative to let shoppers drop off unwanted items at their nearest store is laudable. But miss the mark on issues like diversity and consumers will soon forget such admirable gestures. The extent to which H&M was vilified for its ‘monkey’ hoodie gaff at the start of the year is proof enough of that fact. Topman has also endured its own Twitter storm for its red ’96’ hoodie, designed to celebrate a Bob Marley song but seen as distasteful in its unwitting reference to the Hillsborough disaster.
In today’s world, calculated tactics, however good their intentions, and honest mistakes are seen as equal affronts by eagle-eyed consumers – Millennials in particular – raised on a diet of social media outrage. Whatever you stand for; if you don’t do it, mean it and live it, the message from consumers is clear – we are simply not prepared to buy into that.
One final word on ethical behaviour: Taxation. As many, including myself, have been discussing in the media and online discussions recently, the practice from some etailers of making large revenues but declaring widening losses due to ‘building the brand’ is becoming increasingly prevalent. At what point do online retailers have to show a profit… if ever? Surely it’s only a matter of time before this is put under the same kind of spotlight as Corporation Tax avoidance?
There are unspoken rules of conduct in many aspects of everyday life: keeping to the right of the escalator on the Tube or tipping for good service in a restaurant. For me, any brand that innovates and serves their shoppers well should enjoy the commercial rewards. But they should also declare their profits to the exchequer like all good citizens are expected to do.
It’s little wonder then that many of world’s biggest brands today invest huge sums on elaborate PR efforts to promote greater transparency to consumers. Although clearly, some have more work to do than others.
We all know retailers are under enormous pressures to find ways of delivering growth in a difficult climate. In some cases, they are simply struggling to survive. But this can categorically not be done at the expense of ethical behaviour.
Yes, everyone accepts the fact that balancing divergent and competing demands is increasingly difficult. But for all the effort and energy retailers may putting into delivering transformation and turning around fortunes at the minute, the harsh truth is this: one wrong step and all your good work can be undone, in an instant.