CORPORATE RESPONSIBILITY - CHANGING
THE RETAIL LANDSCAPE
The third issue of Counter Culture focuses on Corporate Social Responsibility (CSR or, more commonly, CR) in the retail environment. CR is one of the most topical issues in retail and one that continues to grow in importance. Over the past few years, CR has evolved from merely being a minor obligation, fleetingly acknowledged, into a key consideration, frequently placed at the centre of business strategies. There has been a huge positive change in the numbers of retailers acknowledging the importance of CR. Moreover, looking to the future, there is no doubt that CR will increasingly become an integral component of business practices as retailers look at the challenges facing them in the post-recessionary environment.
CAUSES FOR CONCERN
Any CR strategy should acknowledge that companies have an impact on society and the environment through their operations, products and services as well as through their interactions with key stakeholders. CR means managing this impact to add value to the company and brand, and increase wider economic and social well being now and in the future. Some leeway should be given when considering the difference in consumer attitude versus actual purchasing behaviour. Consumers do not always act on their initial stated intent when it comes to all things ethical and sustainable.
INFLUENCING THE CUSTOMER MINDSET
Consumers are willing to pay a premium for products that benefit the environment. Even though products which contribute to animal welfare are less popular, research shows that consumers are willing to spend more on products with demonstrable benefits to wider society. Consumer opinion seems to be more effectively influenced by messages coming from close peer groups, such as family and friends, as opposed to more public messages, such as from official government sources. Opinions are mostly derived from what is reported in the media together with the opinion of friends and family. Messages via retailer marketing can be reasonably effective.
THE PRICE OF LOSING THE CR BATTLE
More than half of consumers claim that their perception of a retailer’s responsibility influences their purchasing decisions to some extent. Even taking into consideration the difference between consumers’ stated beliefs and their actual behaviour, this is still a very powerful message. However, when it comes to avoiding socially irresponsible retailers, consumers are not quite so resolute in their behaviour. A significant number declare themselves prepared to avoid a business that they feel is not acting responsibly.
DRIVING HOME THE BENEFITS
Retailers who adopt a ‘responsible’ corporate approach can create a potential driver for growth. However, many retailers are not clearly communicating their ethical cultures to their consumers. There are various labels and products which retailers attempt to sell at higher prices – in return for some level of investment in improving the environment, society, or personal health. However, there remains significant difference with regard to consumer understanding of what exactly the rationale of these initiatives are.<br/><br/>Consumers are unable to comprehend why they are expected to pay more for these products and increasingly find the use of different terminologies to promote products, such as ‘organic’, ‘green’ and ‘environmentally friendly’, confusing.
LESSONS FROM THE SHOP FLOOR
The strongest performance in demonstrating ethical values comes from Fairtrade and free range products. Fairtrade benefits from a widely recognised certification mark and message consistency in what it stands for. A strong marketing campaign and widespread media coverage communicates to consumers exactly what the certification represents and the benefits of Fairtrade to society in particular. That said, there is less recognition of the environmental side of Fairtrade and the brand would benefit from more promotion of its role in encouraging sustainability.
THE ROLE OF GOVERNMENT
As well as meeting stakeholder expectations and demands, the other major factor, which shapes retailers’ CR programmes, is government legislation and initiatives. There are a considerable number of schemes currently in place at both a UK and European level, ranging from the voluntary to the legally binding. The majority of laws governing ‘responsibility’ tend to cover environmental and domestic social issues, with areas such as ethical sourcing largely left to the retailers’ own judgement and the local laws of the countries in which they operate.
KEEP IT POSITIVE
Honesty and integrity are key desirables for consumers when it comes to ethicality, so transparent business practices are also increasingly important and even issues such as the salaries of retail executives are now coming under scrutiny. Brands whose entire organisational purpose, vision and values are driven by a solid ethical blueprint and a commitment to integrity and fairness in all aspects of the business can flourish, whereas those simply promoting an ethical veneer will quickly be rejected and lose share. Retailers should look to emphasise the importance of their roles as ‘choice editors’, in filtering out products incompatible with their ethical stance. Consumers perceive this to be fair and are comfortable that retailers are entitled to promote the matter.
