When it comes to topics and hallway conversations, all the usual suspects were at the National Retail Federation’s just-completed annual Big Show.
There was omnichannel, cashier-less checkout, personalization, 3PL, BOPIS, mobile, merchandising, last-mile, first-mover. But there were also subtler themes that meandered through conversations and occasionally burst on to the stage. Themes like the importance in 2019 of values-based retailing.
Businesses, perhaps especially retailers, can no longer sit on the sidelines when it comes to issues that are important in their customers’ lives. It’s no longer open for debate: Consumers are willing to pay more in order to shop with retailers that support values that they believe in.
“The word I love to use is the purpose of your brand,” Jill Standish, senior managing director and global head of retail for Accenture, said during an NRF news conference. “The consumer can feel this purpose. Consumers we actually studied said they would spend 31 percent more with brands that have a strong purpose.”
No doubt consumers are spending more with retailers that reflect their values, especially millennial consumers, NRF’s Director, Retail and Consumer Insights Katherine Cullen, added during the news conference.
It’s not news that the world of retail is changing rapidly, as is the world around it. Consumers are not only empowered in the way they shop — in-store, online, mobile — they are exerting the right to care about how the stores they shop with behave in the wider world.
Social media has played a powerful and undeniable role in this transformation. It is the way like-minded consumers share intelligence on who’s shop-worthy and who is not. It is the way consumers keep their favorite brands honest.
“In this social media environment, we’re always on,” Target CEO Brian Cornell said during a session, when asked about the role of leaders in retail today. “We’re always on. We have to represent our brands, our teams, our values each and every day. People look to us for consistency and confidence that we’re leading our companies in the right direction. I think expectations are higher than ever before.”
So, being socially aware and active is important. But how do retailers pull that off in an era when social issues have divided the Untied States and countries in Europe and beyond?
“It’s hard to take a stand,” Jay Sole, executive director of UBS Securities LLC, said, joining Standish and Cullen at the news conference. “They’re finding it difficult to find their niche to do something unique.”
Think of some of the big stands brands and retailers have taken recently. Nike’s advertising campaign featuring Colin Kaepernick, who was among the NFL players who kneeled during the national anthem. Dick Sporting Goods decision to stop selling assault-style guns and stop selling all guns to customers younger than 21, after the Parkland High School shooting.
It’s hard to imagine two more polarizing social issues in recent times.
As CEO of Patagonia, Rose Marcario runs one of the most socially vocal and politically active retail enterprises in the United States. Patagonia called 2018’s corporate federal tax cut irresponsible and pledged to donate its $10 million tax savings to environmental nonprofits that are working to protect water and land and working towards “finding solutions to the climate crisis.”
The company has endorsed political candidates and contributed to their campaigns. It’s created a platform that connects volunteers with local organizations working on environmental issues. And it recently changed its mission statement to say it will build the best products, cause no unnecessary harm, use business to protect nature and not be bound by convention.
Aren’t such actions risky, Marcario, who spoke at the NRF session, “Money Well Spent: Making Your Purchases Stand for Something,” was asked by Fast Company Senior Staff Editor Jeff Beer.
“It’s funny,” she said. “This last decade has been the best decade for us.”
But Marcario readily acknowledged that not every retailer would be wise to precisely copy Patagonia’s playbook — criticizing the president of the United States and his policies and getting directly involved in political campaigns.
“We grew out of a catalog company,” she said. “We’ve always had a very close relationship with our customer. It’s not been a big risk, I would say. But we really know our customers and they know us.”
Marcario said the company’s work on climate change has resonated especially with younger customers, who relate to the change in weather and temperatures much more directly than “my generation.”
So, finding social causes that are consistent with a brand and understanding how those causes resonate with that brand’s consumers are clearly important. And despite the polarization in the country and the world, there are issues that seem to be fairly universally accepted, Accenture’s Standish said.
Diversity and inclusion are important, for instance. Inventory should reflect the broad range of backgrounds that shoppers bring into a store or to a website. Sustainability is important, USB’s Sole said. “It’s something that is a lot less polarizing.”
When you think about retail realities, with Amazon growing and buzzy digitally native retailers gaining market share, it’s crucial that retailers find ways to differentiate themselves. Discounting has more than worn out its usefulness. Retailers realize a race to the bottom is not going to win the day.
Values-based retailing provides another way. It’s a way that, when done right, is not only good for business, but good for all of us.
Photo courtesy of NRF