Corporate social responsibility (CSR) and sustainability are no longer uncharted waters for retailers. While in the past CSR still was somewhat of a voluntary social commitment, these days it is an important factor for company success. However, oftentimes end customers still don’t fully understand sustainability of products and processes. Particularly in retail, this can result in customers turning away from the B2B as well as the B2C area.
For retail, CSR includes sustainable resource management as well as an eco-friendly manufacturing process. At the social level, fair treatment of associates, suppliers and service providers along the entire value chain is an important aspect.
Customers are becoming more critical
The many Smartphones and the constant accessibility are a blessing, but sometimes also a curse. Whereas in the old days, you were ¬– to put it a bit flippantly – only informed if you saw the news and read the paper, in times of the Internet, Smartphones and social networks it is almost impossible to remain uninformed. What is even more crucial for retail: whatever the manufacturer or the product is not communicating to the customer, the customer researches on his/her Smartphone and factors in external – sometimes also critical – sources in his/her decision-making process. At the actual store, the customer doesn’t hear about polluted bodies of water in China, low paid cotton farmers in Africa or staff that is being secretly watched under video surveillance. Yet after three clicks on the Internet, he/she knows all about it.
In online retail, sustainability and CSR are still not particularly hotly debated topics; the customer is more interested in a bargain in this case. However, the controversy about contract workers at Amazon in Germany should have somewhat set the ball rolling in this case.
Potential business partners have new demands
Responsible management is not just a topic that affects end customers. Companies in all industry sectors have to bow to increasing political and social pressures. Consumer and environmental organizations are also a reputational risk for companies that still take some liberties with sustainability. In architecture and store construction for instance, today sustainable production and corresponding documentation is already somewhat of a requisite. In this case, it is the strong brands in particular that put pressure on architects and shopfitters, because companies want to convey their sustainability consciousness not just through their products, but also through their store construction concepts.
Green store construction 2.0
Puma is an example of green store construction. In a suburb of Bangalore, the sporting goods manufacturer has opened a sustainable and resource-conserving store. Local companies built the building using local products. Recycling also plays an important role in the store. Recycled steels as well as reusable materials from retired technology, cans or bicycles were being used.
In addition, many Puma stores already live by the “Bring Me Back” philosophy: customers can return their worn out clothing to specially allocated collecting bins. Afterwards -and depending on their condition- these bins are taken back down to pieces or are completely shredded and made into new pieces of clothing. Other textile manufacturing companies such as Jack & Jones already work with this recycling process.
Zumtobel is involved in another new and sustainable project in the architectural sector. The LifeCycle Tower One in Dornbirn, Austria, is the first un-encapsulated hybrid timber high-rise building in the world. The Austrian company relies on an energy-efficient mix of natural and LED lighting.
Green product line
The memo Company, which sells sustainable office supplies, pursues another strategy of sensitizing customers through targeted sustainability communication for their products. ”…“, comments sustainability expert Stephan Schaller of GS1 Germany on the success of this product line concept in our EuroShop.de interview.
Although CSR and sustainability have not yet fully arrived in online retail yet, there are nevertheless already concepts like the one offered by Otto Group, which meet the sustainability demands by educated consumers. Schaller explains:”...“
Well implemented CSR for sustainable company success
Corporate social responsibility and sustainability are topics that affect retail and consumers equally and will become a part of life in the future. Even if the topic has been in the media for some time now, it is not just a mere trend. Not working in a sustainable manner can be very bad for a company’s image. In our interview, sustainability consultant Martin Blumberg from brands & values confirms: ”This can result in business risks for companies, if it becomes public knowledge that they don’t show responsible sourcing practices and lack of responsibility towards the manufacturing practices in their preliminary products.“
The expert questions whether sustainability is profitable for companies: ”I am personally rather skeptical whether sustainable management is a sales driver in the traditional sense. It is more of a tool for companies to stay competitive and to meet the sustainability demands of an increasing number of customers at the product level.“