Rising stakes for retailers on social responsibility

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Rising stakes for retailers on social responsibility

By David Orgel - 08/23/2019
Some years ago social responsibility was a new concept, and its staying power wasn’t so clear.

Not any longer.

This topic has not only grown in importance, but is also impacting retailers in new ways. There’s more evidence that consumers care a lot about this, and that retailer reputation depends on it.

Maybe consumers are looking to the private sector to fill a larger void at a time of great polarization in our nation’s public discourse and political landscape. And who is more high profile in the private sector than retailers?

More retailers get this. They are stepping up commitments on issues such as sourcing transparency, animal welfare, packaging reduction, and ethical workplaces. Retailers are giving more thought to how to best relay success stories. As more companies boost commitments, it raises the bar on how others need to respond. These strategies are increasingly essential to retailer reputations. They can no longer be ignored.

When Harris Insights & Analytics unveiled its annual reputation survey earlier this year, it measured companies for attributes such as culture, trust, ethics, and citizenship. Retailers making the top 10 included Wegmans, Amazon and Publix Supermarkets.

You may question one or more of these picks, but it’s hard to argue with the premise that responsibility links to reputation.

“The results speak to the growing role companies play in our social discourse, and America’s increasing desire for companies to take action on tackling social issues of the day,” said Neil Stern, senior partner, McMillanDoolittle, in a column for Forbes.

Social responsibility is taking more of a central role in retailer communications. I recently heard a senior Walmart executive at a conference emphasizing the retailer’s stances on palm oil and post-consumer plastics in describing the central importance of sustainability in its efforts. There was no mistaking how much this message was being tied to the retailer’s overall mission.

Likewise, DSN recently reported on a presentation by Kroger’s Gil Phipps, vice president of Our Brands, who outlined the retailer’s sustainability efforts in the Philippines, Rwanda and Egypt. His point was that social responsibility needs to be placed alongside other attributes — like premium and exclusive — as one of the key areas of product focus. That’s quite a commitment, and other retailers should take note.

There’s definitely a generational aspect at play here. Phipps called out millennials in particular as a cohort that prioritizes social responsibility in making buying decisions.

Having said that, I’m concerned about consumer skepticism and confusion. While sustainability is important to more than half of U.S. consumers, most say it’s difficult to know whether products are environmentally sustainable, according to this year’s Food and Health Survey from International Food Information Council Foundation (IFIC). Retailers need to make sure that claims are believable and proven.

After all, consumers aren’t shy about calling out retailers who they suspect may be falling short. A new report from Solutions for Retail Brands (S4RB) analyzed consumer feedback on Twitter about six U.K. grocery retailers. Much of the commentary was about product preferences, but sustainability topics figured prominently. In fact, the excessive use of plastics in packaging by retailers was a major topic.

It’s more crucial than ever for retailers to figure out how social responsibility should play in their organizations. Each retailer doesn’t need to solve all the world’s problems. However, relaying responsible and credible efforts on a few topics will go a long way towards boosting reputations and driving consumer trust.

David Orgel is an award-winning business journalist, industry expert and speaker. He currently is the principal of David Orgel Consulting, delivering strategic content and counsel to the food, retail and CPG industries. To read last month’s column, click here.