In the 1990s, Nike was caught in a sweatshop scandal showing poor working conditions in its suppliers’ Asian factories. Not only did its stock prices fall as a consequence, but the company also suffered a loss of reputation that triggered a loss of several contracts with colleges, boycotts by celebrities, a drop in sales (from $9 billion in fiscal 1998 to $8.8 billion in fiscal 1999), and a fall in market share (from 35.5 percent in 1997 to 30 percent in 1998).
Greenpeace’s
2011/12 Detox campaign, which attacked second and third level
suppliers of global apparel brands such as GAP, H&M, Levi’s, Nike
Puma and many others, brings to mind several similarities with the
Nike scandal.
The
accompanying publicity campaign raised so much concern among
consumers – and first signs of serious sales losses and boycotts –
that even reluctant manufacturers such as Inditex eventually signed
up to the ‘Roadmap
to Zero’ initiative
to clean up their act.
Then, two important suppliers’ factories in Pakistan burnt down in the last quarter of 2012. These factories were SA8000 audited and certified yet all exits were locked which caused twice as many deaths than the New York Triangle Shirtwaiste Factory fire in 1911.
The incident received widespread publicity across the international press.
Supply
Chains: Lack of Controls orApathy?
However,
between the Nike scandal and the Bangladesh fires lie over 20 years
of industry incidents, all of which have at their roots the
Western fashion brands’ lack of supply chain controls result of
their outcontracting policies. In these 20 years, the story has
repeated itself over and again, without brands seemingly learning
from past mistakes.
But
where previously it was traditional media such as newspaper, TV and
radio that owned the news, today information spreads much more
quickly and in a less controlled manner thanks to informal digital
communications channels, owned and orchestrated by consumers
themselves.
Worse,
since the Nike scandal, consumers have become not only more cynical
about the industry’s true motivation to self-regulate and ‘do
business responsibly,’ but also came to understand that they cannot
trust any claims made by retailers and brands.
Creating
a Cynical Customer
In
numbers: Over
75 percent of consumers are suspicious of corporation’s
sustainability pledges,
and don’t trust businesses. An equal percentage (75 percent) is of
the opinion that large companies do not care about the environment.
Further, 82 percent of all consumers have noticed some type of
‘environmental friendly’ claims by companies, but 54%
state that they do not trust
any public
‘eco’, ‘green’ or ‘sustainability’ claims made by companies.
As
a consequence consumers have come to request in-depth product and
production information, in a format suitable to them: concise, to the
point, accurate, and with enough evidence to prove any claim.
In recent
research conducted during a consumer trade fair, we found that
consumers are not as clueless as the industry assumes them to be.
Attendees were well aware of the pros and cons of outsourcing of
apparel production to overseas destinations with many of them
acknowledging that “companies go out of their way to both, reduce
price but also purposely release production control and management to
their suppliers. Companies want to purposely remain ignorant about
what may, or not, be happening in those far away places”.
Consumers
did not particularly appreciate that their clothes were made in Asia.
They were certain that the ‘Made in China’ tag on their jeans or
winter coat isn’t good news, not for the environment and not for the
workers who made those garments.
Yet, at the same time, they had
little idea of alternatives available to them.
From
their perspective, ‘everything’ is made in those far away places.
Where can they find alternatives that are affordable? This is why
consumers
resort to buying locally in order to buy sustainably, because they
perceive large brands and businesses to be non-transparent and
therefore untrustworthy.
On the
Hunt for Ethical & Sustainable Consumer Products
Suddenly
the words ‘accessibility’ and ‘availability’ take on a
somewhat different nuance.
What
consumers in fact are facing is a typical Catch22 situation: plenty
of producers and brands claim to be ‘listening’ yet neglect to
acknowledge the demands consumers put forward, and consumers who want
to invest in better products but also feel that producers are
inattentive to their needs as consumers.
After
all, one of the most frequently received answer when asking CEOs of
consumer goods companies – fashion and apparel in particular –
why they are not producing more sustainable products is: “Show
me there is demand, and we’ll be happy to cater to it.”
It
is important in this context that, in
a recent report we found that
consumers
are neither purposely ethical nor unethical.
Instead, purchasing decisions are made as a response to particular
needs and choices related to the range of products available. In the
purchasing process, convenience
remains an important factor. Given choice, sufficient information and
a comparable price/quality ratio among products, a majority of
consumers are willing to choose the most ethical product among those
available to them, despite being valued at a slightly higher price.
There
is, however, equally little doubt that consumers are reliant on, and
generally trust product labels, certification and accreditation
labels in order to compare the ethical credentials of products and
make their purchasing decision. However, they maintain the view that
sufficient information is still unavailable to them. So is the market
ready for transparency? If brands, department stores and retailers
were ready to give consumers easy access to their supply chain data
and and consequently also, a larger range of more sustainable
products, then yes, it is.
In the 1990s, Nike was caught in a sweatshop scandal showing poor working conditions in its suppliers’ Asian factories. Not only did its stock prices fall as a consequence, but the company also suffered a loss of reputation that triggered a loss of several contracts with colleges, boycotts by celebrities, a drop in sales (from $9 billion in fiscal 1998 to $8.8 billion in fiscal 1999), and a fall in market share (from 35.5 percent in 1997 to 30 percent in 1998).
Greenpeace’s
2011/12 Detox campaign, which attacked second and third level
suppliers of global apparel brands such as GAP, H&M, Levi’s, Nike
Puma and many others, brings to mind several similarities with the
Nike scandal.
The
accompanying publicity campaign raised so much concern among
consumers – and first signs of serious sales losses and boycotts –
that even reluctant manufacturers such as Inditex eventually signed
up to the ‘Roadmap
to Zero’ initiative
to clean up their act.
Then, two important suppliers’ factories in Pakistan burnt down in the last quarter of 2012. These factories were SA8000 audited and certified yet all exits were locked which caused twice as many deaths than the New York Triangle Shirtwaiste Factory fire in 1911.
The incident received widespread publicity across the international press.
Supply
Chains: Lack of Controls orApathy?
However,
between the Nike scandal and the Bangladesh fires lie over 20 years
of industry incidents, all of which have at their roots the
Western fashion brands’ lack of supply chain controls result of
their outcontracting policies. In these 20 years, the story has
repeated itself over and again, without brands seemingly learning
from past mistakes.
But
where previously it was traditional media such as newspaper, TV and
radio that owned the news, today information spreads much more
quickly and in a less controlled manner thanks to informal digital
communications channels, owned and orchestrated by consumers
themselves.
Worse,
since the Nike scandal, consumers have become not only more cynical
about the industry’s true motivation to self-regulate and ‘do
business responsibly,’ but also came to understand that they cannot
trust any claims made by retailers and brands.
Creating
a Cynical Customer
In
numbers: Over
75 percent of consumers are suspicious of corporation’s
sustainability pledges,
and don’t trust businesses. An equal percentage (75 percent) is of
the opinion that large companies do not care about the environment.
Further, 82 percent of all consumers have noticed some type of
‘environmental friendly’ claims by companies, but 54%
state that they do not trust
any public
‘eco’, ‘green’ or ‘sustainability’ claims made by companies.
As
a consequence consumers have come to request in-depth product and
production information, in a format suitable to them: concise, to the
point, accurate, and with enough evidence to prove any claim.
In recent
research conducted during a consumer trade fair, we found that
consumers are not as clueless as the industry assumes them to be.
Attendees were well aware of the pros and cons of outsourcing of
apparel production to overseas destinations with many of them
acknowledging that “companies go out of their way to both, reduce
price but also purposely release production control and management to
their suppliers. Companies want to purposely remain ignorant about
what may, or not, be happening in those far away places”.
Consumers
did not particularly appreciate that their clothes were made in Asia.
They were certain that the ‘Made in China’ tag on their jeans or
winter coat isn’t good news, not for the environment and not for the
workers who made those garments.
Yet, at the same time, they had
little idea of alternatives available to them.
From
their perspective, ‘everything’ is made in those far away places.
Where can they find alternatives that are affordable? This is why
consumers
resort to buying locally in order to buy sustainably, because they
perceive large brands and businesses to be non-transparent and
therefore untrustworthy.
On the
Hunt for Ethical & Sustainable Consumer Products
Suddenly
the words ‘accessibility’ and ‘availability’ take on a
somewhat different nuance.
What
consumers in fact are facing is a typical Catch22 situation: plenty
of producers and brands claim to be ‘listening’ yet neglect to
acknowledge the demands consumers put forward, and consumers who want
to invest in better products but also feel that producers are
inattentive to their needs as consumers.
After
all, one of the most frequently received answer when asking CEOs of
consumer goods companies – fashion and apparel in particular –
why they are not producing more sustainable products is: “Show
me there is demand, and we’ll be happy to cater to it.”
It
is important in this context that, in
a recent report we found that
consumers
are neither purposely ethical nor unethical.
Instead, purchasing decisions are made as a response to particular
needs and choices related to the range of products available. In the
purchasing process, convenience
remains an important factor. Given choice, sufficient information and
a comparable price/quality ratio among products, a majority of
consumers are willing to choose the most ethical product among those
available to them, despite being valued at a slightly higher price.
There
is, however, equally little doubt that consumers are reliant on, and
generally trust product labels, certification and accreditation
labels in order to compare the ethical credentials of products and
make their purchasing decision. However, they maintain the view that
sufficient information is still unavailable to them. So is the market
ready for transparency? If brands, department stores and retailers
were ready to give consumers easy access to their supply chain data
and and consequently also, a larger range of more sustainable
products, then yes, it is.
