The issue of safety standards in developing world factories, which produce clothes for Western economies, has once again been highlighted by recent events. Martin Philpott, head of retail at information management and business intelligence expert, IMGROUP, explains the demand for responsible retailing is set to grow and why retailers must embrace this

Philpott: responsible retailing can be a differentiator
The recent collapse of a factory in Bangladesh is the latest in a long line of disasters caused by unsafe working conditions. While major retailers including Tesco, Primark, H&M and Inditex have since signed up to the Accord on Fire and Building Safety, many will be asking, is this too little too late?
This tragedy has certainly intensified the growing demand for responsible retailing. The push towards this has been gaining traction in recent years with international retailers such as Nike putting sustainability at the top of their corporate agendas.
While the Accord is certainly a good place to start, retailers must go even further than this, beyond the obvious safety issues to see what more they can be doing to ensure they are responsible and ethical throughout the entire production process. From ensuring workers receive a fair wage, to sustainable sourcing, even ensuring that vehicles delivering goods have MOTs, responsible retailing should be a key priority.
Brands who fail to do this and are exposed, risk losing the trust of their customers. Rather than seeing responsible retailing as a burden, retailers should embrace it as part of their corporate responsibility. In addition, they should also look at it as a key marketing initiative and highlight the work they are doing in this area. This could be an important key differentiator in the increasingly overcrowded retail space.
Balancing act
Of course, responsible retailing requires financial investment, so how do retailers balance this with the need to make a profit?
Today’s consumer is looking to buy ethical more than ever before. According to research by Goodbrand, 19% of the UK population are classed as ‘highly ethical’ consumers. This group of people is also predominantly made up of the more affluent ABC1 social class. They have more disposable income and are willing to pay more for items which they know have been produced ethically. In the longer term it makes sense to invest in responsible retailing and promote your brand’s ethical credentials as part of a marketing initiative. Goodbrand’s research also shows that brands that do this have a much better perception among consumers.
Some of the world’s best known retailers are already realising the marketing potential of being recognised as an ethical brand. In recent year’s sports retailers, Nike and Puma, have put corporate and social responsibility at the top of their agenda.
In addition to ensuring safe working conditions under the Puma.Safe initiative, Puma is also the first company to publish an unprecedented Environmental Profit and Loss Account which monitors the company’s environmental impact. In response to previous claims about its labour practices, Nike established a code of conduct to ensure that any unethical practices were stopped and over the last decade, it has really established itself as an ethical, sustainable retailer. It’s most recent campaign, ‘Nike Better World’ promises to use recycled materials in the manufacture of its products. As a result of its efforts, Nike has received praise from the industry and consumers alike and still turns a healthy profit.
Now is the time for retailers to invest in responsible retailing as a key marketing initiative. Proving to customers that the product they just bought for their five year old wasn’t in fact manufactured by a five year old on the other side of the world should really be a priority and would subsequently garner much more trust with consumers. Following the lead of Nike and other ethical retailers could be a key differentiator in what is a challenging market.
Proving that safety and ethics are top of mind throughout the entire organisation, takes responsible retailing to the next level.
IMGROUP contact details:
Tel: +44 20 7842 7800
Email: info@imgroup.com
Web: http://www.imgroup.com
(A Retail Times’ sponsored article)