Rise of corporate social responsibility (CSR)
The concept of socially responsible practices in a corporate context is by no means a recent development. In 1970, after having been suggested a decade earlier, “corporate social responsibility” became the accepted term for the concept of social and environmental consideration in business. Two years later CSR was on the agenda at the United Nations Conference in Stockholm, becoming internationally acknowledged as a necessary global business policy reform. Following the 1972 conference, companies the world over started to adopt a more conscientious approach in conducting their business. From there, the practice developed over the years into what it is today – “a natural inclination for businesses to ‘do right’ by its customers, its employees and the environment”.
The growing impact of CSR in the retail sector
Although CSR is not new to the business world in general, up until the turn of the century, hardly any direct impact on the retail sector had been felt. Alongside the expansion of the information age, however, we have seen CSR become a significant consideration for retailers globally. Communications companies monitoring the trend over the past five years provide the evidence.
In 2014, communications company, Nielsen, having completed an extensive “Global Survey on Corporate Social Responsibility,” revealed, “Fifty-five percent of global online consumers across 60 countries say they are willing to pay more for products and services provided by companies that are committed to positive social and environmental impact.”
Cone Communications, released the results of their “CSR Study” in 2017, revealing “consumers factor a company’s core beliefs into shopping decisions”. The report found, “Eighty-seven percent said they’d purchase a product because that company advocated for an issue they cared about, and more than three-quarters (76%) would refuse to purchase a product if they found out a company supported an issue contrary to their beliefs.”
In 2019, a similar study by the same company found that, “Ninety percent of Gen Zers believe companies must act to help social and environmental issues and 75% will do research to see if a company is being honest when it takes a stand on issues.”
The benefit of company values
With the social reputation of retailers now having even more influence over the consumer’s purchase decisions than even the relative price, companies are placing more and more emphasis on social and environmental considerations in their daily operations.
The impact of modern consumer attitudes on retailers is significant, but by no means negative. Adhering to socially responsible business practices, displaying ethically sound values in product sourcing and proactively participating in community-improving initiatives not only please consumers, but also benefit the businesses themselves. Contributing to local society isn’t just improving the community – it is also good for the bottom line.
Retailers that have socially, and environmentally beneficial CSR initiatives are reaping the benefits of customer loyalty. They are also enticing new customers to switch from competitors that are not displaying these values expected by the consumers of today.
Sustaining sustainability
In South Africa Corporate Social Investment (CSI) is mandatory for business, but some are going further than merely the minimum CSI required.
Major retailer, Mr. Price Group, has embraced social responsibility, making it one of the company’s core business considerations. Recognising the demanding and mindful nature of modern consumers, a large portion of their website is dedicated to detailing their commitment to CSR, making public how they plan to conduct business. In the section on sustainability, Mr. Price has pledged to operate the business “while caring for the communities and environment…”
Even suppliers to the retail industry are getting directly involved. Consumer goods company, Tiger Brands, has shown their dedication to CSR through a proactive social support initiative recently. Writing for Bizommunity.com, Ursula Human explains that the company has launched its enterprise supplier by developing a fund to support (local) smallholder farmers, processors and distributors in the food-processing value chain.
With the well-informed nature of consumers today, retailers will likely attract consumers in the knowledge that the goods bought through those retailers are produced by a company driving local agriculture.
CSR and company values have become more important than ever. Looking ahead to 2020, retailers will be competing to attract customers and earn consumer loyalty on a more emotional level than ever before.