Retail Trends: Retail CSR Still Matters (What It Means for Wholesale)

May 18, 2015

Retail CSR: Why it Matters and What it Means for Wholesale

On Vend’s 2015 retail trends and predictions report, it was predicted that retailers would “double down on corporate social responsibility” in 2015. Corporate social responsibility is definitely not a new or particularly exciting topic, and it has long been the subject of much debate. Nevertheless, according to Professor Julie Irwin of the University of Texas at Austin, “Consumers are likely to be especially brand loyal if their deeply-held values are engaged in their purchasing. Consumer engagement and commitment is priceless: ethical brands are more likely to encourage this engagement.” According to a survey by Echo Research, 87% of global consumers reported that they factor CSR into their purchase decisions. As these consumers are drawn to retailers that invest in their communities and seek to do more with their revenue than rest on their laurels, businesses are responding to the demand. Indeed, although retail CSR initiatives are ideally focused on a company’s ability to make a real, lasting impact, they also often serve as a tool to drive more business. More specifically, companies who launch retail CSR initiatives that are closely tied with their underlying business or products stand to gain the most in terms of visibility, marketing opportunity, and sales. For instance, The Kroger Company, one of the country’s largest retailers and supermarket chains, developed an anaerobic conversion system at it’s distribution center in Compton, California to turn organic food waste (food not fit for sale or donation) into energy. In January of this year, the Environmental Protection Agency recognized Kroger for these pioneering efforts to move toward a “Zero Waste” culture. In another example, outdoor brand Patagonia launched a “worn wear” campaign on Black Friday to encourage consumers to embrace sustainability by repairing and reusing their clothing, rather than replace them with new garments. CSR is affecting businesses big and small, including wholesalers. In aForbes article addressing the relevance of CSR for small and medium enterprises, contributor N. Craig Smith says, “pressures on the larger corporates will inevitably translate into pressures on their suppliers, including SMEs.” When looking to stock their stores, retailers will be increasingly looking for brands that make customers feel good about buying their products. Perhaps one of the best and most often-cited brands is Toms, a for-profit footwear brand that, according to Fast Company,

communicated its “one for one” business model so well that it’s often mistaken for a charitable organization. For every pair of shoes sold, a pair is given to a child in need. The company has also expanded into eyewear (donating eye care for each pair purchased), bags (for maternal healthcare), and even coffee (the company’s clean water initiative). Selling into retailers from Nordstrom and Urban Outfitters to independent boutiques, TOMS has “bond[ed] moneymaking and giving in an unprecedented manner.” Thus, in 2015, as more retailers seek to launch or continue “good deed initiatives,” wholesale brands will experience more pressure to offer products that make customers feel good about their purchases. In short, wholesalers should be prioritizing CSR, as well as incorporating it into their brand strategy and marketing communications.