Sustainability. Philanthropy. Community service.
Ten years ago, these were not front-and-center for most retailers. Some tried to recycle, and national chains sponsored events that supported good causes, but these efforts weren’t operational priorities. And businesses avoided taking positions on complicated, even divisive social issues.
That is no longer the case, at least not in terms of what customers want. Forrester’s Consumer Technographics® data reveals that “consumers explicitly consider factors such as company values and commitment to certain causes or beliefs when choosing brands to associate with or products to buy.”
Customers not only want convenience, value and great experiences, they want to feel good about which retailers get their money.
Kantar Consulting found that 77 percent of shoppers believe it’s important to vote with their dollars by supporting retailers and brands who reflect their values. Another survey from Accenture Strategy revealed that 47 percent of consumers will leave brands that lack a purpose.
This starts will sustainability, both as a business practice and as an important part of a corporate mission and values. Consumers want to know how retailers manage resources and whether they emphasize responsible sourcing. They want to see substantial, measurable efforts to implement programs for energy savings and emissions and waste reduction.
It’s not difficult to find examples of sustainability’s growing prominence for retailers. In August, Nordstrom announced a pair of sustainability initiatives. In September, Kohl’s unveiled a number of initiatives focused on long-term sustainability. As noted in Chain Store Age, “The initiatives, part of the retailer’s corporate social responsibility platform, fall into three key areas: climate action, waste and recycling, and sustainable sourcing.”
In April, Retail Dive asked, “Will sustainability change the retail landscape?” in a series focused on what retailers were doing now and what’s next.
Miller Zell sees this, too, and incorporates it into solutions we offer our clients. Simply, sustainability is fundamental to Miller Zell’s corporate mission and values. It’s part of who we are and how we conduct business.
And it’s good for business. All businesses. Consumers, particularly younger ones, now favor businesses that actively and authentically support good causes.
As far back as 2012, surveys found that Millennials shop differently than past generations. They grew up with recycling as a standard and critical practice. As Boston Consulting Group noted, “Millennials expect companies to care about social issues and will reward those that partner with the right causes.”
According to Edelman’s annual goodpurpose® study, 86 percent of global consumers believe that business should place at least equal weight on society’s interests as on its own. Further, 62 percent would switch brands if another of similar quality supported a good cause. Fifty-three percent of consumers agree that every brand has a responsibility to get involved in at least one social issue that does not directly impact its business.
That means retailers need to incorporate philanthropy into their culture, and not just as a “write a couple of checks” sort of thing. As with sustainability, there’s a lot of out there about “strategic philanthropy.” But today’s consumers also are quick to skepticism. They want authenticity and true commitment, not marketing manipulation. Edelman’s found that 56 percent of shoppers believe brands use societal issues as a marketing ploy.
Most companies can’t rework themselves into almost entirely charity-based endeavors like Seattle-based Purpose Boutique, which donates a percentage of every sale is to “Rescue: Freedom International” to fight human trafficking. But they can make philanthropy a part of their corporate culture.
Miller Zell built such a cultural foundation by supporting associate initiatives, whether that’s raising money for breast cancer, volunteering for the Special Olympics of Georgia, supporting the community around our headquarters or offering support for other foundations.
Finally, there are divisive social/cultural issues that permeate our lives and even enter our stores. Two obvious recent examples would be retailers who take a position on guns, and Nike’s decision to use controversial former NFL quarterback Colin Kaepernick in an advertising campaign.
The decision-making challenges here are obvious. Some customers will be happy with the effort, and others will be angry. Triangulating between customers present and future and bold versus impulsive decisions is difficult.
But taking a stand on a divisive issue can work. Bloomberg writer Sarah Halzack reviewed Nike’s numbers after the Kapernick partnership and saw a savvy company that knew its customers.
She wrote, “Nike’s experience shows that it is plenty possible for a corporation to take a stand on a politically sensitive issue and not get burned — so long as the foray is well-executed and feels authentic to its longstanding image.”
Retailers need to connect with customers, both loyal and potential, by every available means. While many shoppers obsess primarily about cost and convenience, a trusting connection over shared values now matters more than ever. It needs to be in the foreground of retailers’ strategic thinking.
Want to know more about what resonates with shoppers at the intersection of customer values and store strategy and design? Check out our ebook: The Split Personality of Value.