The article in the url link below reviews the extent of the market for “ethical retailing” (Chapter 2: CSR: Do Stakeholders Care? p25; Issues: Consumer Apathy, p156). In spite of the common perception among executives that consumers do not tend to make purchase decisions based on their best intentions, the author argues this is now changing:
“But there is no mistaking the trend. Worldwide sales of Fairtrade-certified products, for example, grew 42 per cent last year, although at Pounds 1.1bn (Dollars 2.2bn) they are still equivalent to only 2.6 per cent of Tesco's revenues and 0.6 per cent of Wal-Mart's.”
In general, the author portrays the UK’s ethical retail market as being relatively mature:
“One UK retail executive who has made a detailed study of the phenomenon divides consumers into four categories. The first, about 8 per cent of the total, are committed, cause-driven purchasers. A second group, accounting for 30-35 per cent, want to purchase ethically but are not really sure how and are looking to retailers to help them. The third group, also about 30-35 per cent, feel the same, but doubt that their individual purchases can make much difference. The fourth group, the remainder, are completely uninterested, often because they are too poor to think about much more than putting food on the table for their families.”
In using this evidence to make his case, however, the author only serves to highlight the limitations of this market. These category numbers mean that the “completely uninterested” group is at least twice the size of the “committed, cause-driven consumers,” possibly three times as big. At the end of the day, we are still nowhere near a majority of consumers who are willing to place social responsibility concerns above more traditional considerations in arriving at their purchase decisions. The overwhelming sense, despite the author’s enthusiasm, is that any gains made are still largely superficial and are more about relieving first-world consumer guilt than re-shaping the underlying business model to instill a permanent strategic CSR perspective:
“… by publicising their initiatives the supermarkets help consumers feel they have done the world a good deed. Only a small proportion of goods in their shopping baskets may be Fairtrade, but all the in-store advertising about ethically sourced this and free-range that helps persuade consumers that they are buying more of it than they are.”
The final quote in this article, however, is most interesting and demonstrates the danger for firms that are too progressive on this issue:
“Retailers need to be alert to the change. The supermarket executive I mentioned above told me: "A smart retailer is half a step ahead of the consumer. Ten steps ahead and you're out of business."”
Take care
Dave
Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
http://www.sagepub.com/Werther/
There is a good trade in ethical retailing
By MICHAEL SKAPINKER
789 words
11 September 2007
Financial Times
London Ed1
Page 15
http://www.ft.com/cms/s/0/352205cc-5fc6-11dc-b0fe-0000779fd2ac.html
