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Generous Brands 2.0: Retail’s ongoing journey towards the greater good


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Emotional connection with shoppers has always sat at the heart of the essence of our industry, and yet there are still precious few retailers putting their money where their mouths are towards a new agenda of social wellbeing.

5 years ago FITCH identified the move towards this trend with its Generous Brands white paper, a ground breaking challenge to the retail industry to take up the mantle and to change both operations and culture from a focus solely on the bottom line to one marrying commercial realities with a responsibility towards a higher purpose.

The time has come to revisit this topic as retail finds itself poised at a moment of profound change – most pointedly the approaching dominance of Gens Y and Z on the shopping landscape, collectively the largest block of consumers in history and by far the most socially conscious.

Against this backdrop it is more important now than ever before for brands and retailers to align their higher purpose with their business goals. Only then will they become not only unique, but relevant and memorable to those that they seek to serve.

Published in: Retail

Generous Brands 2.0: Retail’s ongoing journey towards the greater good

  2. 2. Please join the conversation #irdc2015 #generousbrands @FITCHdesign @cdaviesFITCH
  3. 3. FORESIGHT#1 Generous Brands In a world where consumers are becoming increasingly aware of ‘mean’ brands FITCH has begun researching the concept of generosity. Generous brands are the ones who show more of a heartbeat, take the first step and display a genuine understanding of their customer needs. This is a long way from 2 for 1 deals and bonus points, but rather a tone of voice and general personality and encourages consumers to warm to their offer. TM
  4. 4. WE’VE GOT A LOT TO GET THROUGH And it’s a heavy topic…
  5. 5. Our Agenda… 1: How do we define Generosity? 2: Why is it important? 3: What factors are shaping it today? 4: Who are the Generous Brands? 5: Where is Retail Generosity? 6: Leave, have a think, start making a difference…
  6. 6. How do we define Generosity?1
  7. 7. The habit of giving without expecting anything in return. Farukh GENEROSITY:
  8. 8. Offering time, assets or talents to aid someone in need. Often equated with charity as a virtue, generosity is widely accepted in society as a desirable trait. Wonderlane GENEROSITY:
  9. 9. Reconciling this generosity with the daily demands of commerce Jeremy Schultz THE CHALLENGE?
  10. 10. Why is Generosity so important today?2
  11. 11. OR, PUT ANOTHER WAY… Why should retail care?
  12. 12. BECAUSE TODAY’S SHOPPER CARES Generations X, Y and Z share an overwhelming belief that all of us need to work together to change our world.
  13. 13. Nau AND THEY ARE VOTING WITH THEIR $ Customers are forming deep and resonant emotional bonds with brands and businesses that align with those beliefs and rewarding them with loyalty
  14. 14. WHY X,Y AND Z? Because in less than 5 years they will essentially represent the global audience for retailers and brands
  15. 15. LET’S START WITH GEN X This group was not born into a climate of broad social responsibility, but their attitudes and values were shaped by a series of world changing events Zoriah
  16. 16. THESE WORLD EVENTS Led to the development an emerging belief in integrity, authenticity and action, particularly as it relates to business and government TheGuardian
  17. 17. TRAITS THAT INFLUENCED X-ers behaviors as parents and laid the groundwork for their influence on the Generations to come… Me
  18. 18. Me
  19. 19. GENERATION X TODAY Are focusing their energies and wallets on undoing the mistakes of the generations that came before them
  20. 20. GOOD NEWS FOR GENEROUS BRANDS As this group are also entering the peak earnings decade of their careers and are ready to reward companies that align with their beliefs Volvo
  21. 21. GENERATION Y Aren’t the kids in your store anymore, and are in fact more likely to be shopping for their kids.
  22. 22. 47% of Millennials are parents, 49% live as a couple, 52% are homeowners ALL GROW’D UP… Source: Yankelovich Monitor, 2014
  23. 23. They are getting used to a lot more responsibility. And with more responsibility comes an (even) more responsible outlook. ONE THING IS FOR SURE
  24. 24. 78% would recommend a company seen as a good citizen, 74% would be proud to be associated with it, 71% would be loyal to such a business Source: MSL Future of Business Citizenship Report, 2014 SLACKTIVISTS NO MORE
  25. 25. GenZ is the most socially responsible generation in history Glenn Brown BUT THE BEST IS YET TO COME
  26. 26. WITH A CRAP TON OF OOMPH “By 2020 today’s 14-19 year olds (GenZ) will be the largest group of consumers worldwide, making up 40% of shoppers in the US, Europe and the BRIC countries” Source: FITCH Gen Z report LauraSmith
  27. 27. AND A CONSCIENCE TO BOOT “Research points to the emergence of a stellar generation: educated, industrious, collaborative and eager to build a better planet” Source: Maclean’s: Get ready for GenZ
  28. 28. “Their role models are young, everyday characters like The Hunger Games’ Katniss Everdeen, who face seemingly inescapable scenarios but rise above them to create a better society - just like Zs, who feel a responsibility to change the status quo.” Source: Forbes, GenZ Rebels with a Cause “60% of Zs want jobs that have a social impact and 26% already volunteer.” Source: Meet GenZ: Forget everything you know about Millenials TheRealMStyles
  29. 29. THE IMPACT OF THESE GROUPS Will signify a profound shift in shoppers’ expectations around how businesses need to act relative to the challenges our world is facing.
  30. 30. AND WE’VE GOT A LONG WAY TO GO 89: Percentage of individuals globally who believe business should equally weight commercial and societal needs 29: Percentage of individuals globally who believe business is actually doing that today Source: 2012 Edelman Good Purpose Study
  31. 31. What factors are shaping the new Generosity?3
  32. 32. WHAT CAN WE LEARN? From X, Y and Z
  33. 33. 3.I JUST “GIVING” WON’T CUT IT Almost every business gives money to charity. And while on paper that’s great, being generous means taking this altruism and activating it. TimGreen
  34. 34. NEXT GEN STATS ON GIVING The new generation of shoppers has had a front row seat on the ineffectiveness of government to tackle issues head on. The key is using your particular SKILLS, EXPERTISE, PEOPLE and RESOURCES to tackle problems that businesses can solve - even when others can’t. They now see businesses as a far more effective vehicle for change, and they expect them to step up.
  35. 35. It’s more important for Generous Brands to focus on close-in issues, rather than making generic and lofty goals that can never be achieved. 3.II YOU CAN’T BOIL THE OCEAN
  36. 36. NEXT GEN STATS ON OVERREACHING We now live in a world where the problems we face are having a direct impact on our lives everyday. From water shortages to superstorms. From cyber crime to huge income gaps. From immigration issues to education. From an aging population to everyday health. We need to stop trying to “End World (insert worthy cause)” and recognize much needs to be done closer to all of our homes.
  37. 37. ALSO, BEING VAGUE DOESN’T WORK Pepsi’s refresh project raised $20MM but was “canned” in less than 2 years as no-one - most of all Pepsi’s board - could articulate what the point was
  38. 38. 3.III ACTION TRUMPS PURPOSE For these new generations of shoppers WHAT you do is far more important and meaningful than WHY you do it…
  39. 39. NEXT GEN STATS ON PURPOSE While having a mission is important to corporate culture it is trumped by action. “We gave $150 million in donations a year but we didn’t really DO anything. We let somebody else pick up the food and it just disappeared. We didn’t use our skills and our people. We didn’t make a difference in ways that we could” Ron Shaich, Founder and Executive Chairman, Panera Bread Good citizenship today means being a game changer.
  40. 40. PANERA CARES Panera A Panera where you can eat a meal for literally cents if that is all you can afford - a brand using its people, places and products to make a difference
  41. 41. 3.IV FOCUS ON WHAT MATTERS While purpose shouldn’t trump action, no brand will be seen as Generous if it doesn’t address issues that are meaningful to shoppers.
  42. 42. SO, WHAT’S ON THEIR MIND? It’s not possible to have a conversation about how business needs to change to align with the next generation of shoppers without discussing the environment. The top 5 as it turns out. When teens were recently polled globally on their top 10 concerns, 5 of them related to the environment.
  43. 43. NEXT GEN STATS ON ENVIRONMENT It’s not enough to just take corrective action. Simply cleaning up your past mistakes does not make you a Generous Brand. And yet in many ways, the environment is an area where retail feels most out of step. Generous brands have to go further. Investing their MONEY, their TIME, their EFFORT to changing our future, and not expecting the customer to pick up one cent of the cost.
  44. 44. THE CONVERSATION HAS STALLED Remember just a few years back when every conference like this focused on sustainability, green and LEED? Walmart
  45. 45. Q: HOW MANY SESSIONS IN 2015? One. Across every major retail design conference in the US and Europe. Walmart
  46. 46. Q: REMEMBER THE SESSION NAME? I’ll give you a clue. You’re sitting in it. And yet it’s not like the problem went away…a quick reminder Walmart
  47. 47. BUILDINGS (WHICH INCLUDE STORES) Are the largest contributors of carbon emissions on planet earth La Citta Vitta
  48. 48. AND RETAIL IS A HUGE PART OF THIS The US has more retail sq ft per person than any nation on earth. 6 times more than the largest per person ratio in Europe Chris Ford
  49. 49. 28,000, 42 GALLON BARRELS OF OIL The amount we consume in the United States EVERY 2 MINUTES heating and cooling these spaces Chris Jordan
  50. 50. IT’S TIME FOR RETAIL TO STEP UP But again it has to be more than just cleaning up our mess. A true Generous Brand would go further… Nicholas Eckhart
  51. 51. Who are the Generous Brands?4
  52. 52. Jason MANUFACTURERS HAVE GOT THE IDEA From large to small initiatives they are forging true emotional bonds with the next generation of customers
  53. 53. Raising awareness and building momentum Unilever UNILEVER’S PROJECT SUNLIGHT
  54. 54. To a new generation of leaders Unilever AND GIVING A VOICE
  56. 56. And profound, it has already made staggering gains and Unilever now tops every chart for sustainability and responsible business practices by a mile Unilever PROJECT SUNLIGHT IS VAST IN SCOPE
  57. 57. SMALL ACTIONS, BIG DIFFERENCE “Achieving goals is not just a job for politicians and governments – everyone needs to play their part” Paul Polman, CEO, Unilever Unilever
  58. 58. Always
  59. 59. Cannes Lion
  60. 60. Went to a car company, not for a car, or an electric engine or a commitment to sustainability Volvo 2015 DESIGN GRAND PRIX
  61. 61. Volvo BUT FOR A PAINT Designed to save the lives of cyclists…invariably injured or killed by cars
  62. 62. AND YET, DESPITE ALL THE EVIDENCE …most retail is either late to the Generous party, left early, had something better to do or is acting like it lost its invite. Jason Hargrove
  63. 63. BUT DON’T LOSE HOPE There are a few glimmers that retail brands that are beginning to step up
  64. 64. AND AT LEAST ONE… Who isn’t just a glimmer, but is instead an incredibly bright spark…
  65. 65. Who is leading the way for retail?5
  66. 66. SOME NAMES KEEP COMING UP But is BOGO the right model for change? Is it for everyone? And is it making a difference? Tonya Staab
  67. 67. SO, WHO IS THE BRIGHT SPARK? The grand old dame of British retail, Marks Spencer
  68. 68. A QUICK DISCLAIMER I don’t work for Marks Spencer, I don’t know anyone who works there and they are not currently a FITCH client. Although I did buy a sweater from them a few years ago.
  69. 69. FOR THOSE THAT DON’T KNOW THEM Founded in 1884, headquartered in London, $15 billion in annual revenues 1,100 stores across a variety of formats Marks Spencer
  70. 70. PLAN A In 2007 Marks Spencer launched Plan A - a 100 point, 5 year plan to create a greener, more ethical business Marks Spencer
  71. 71. Marks Spencer HOW ARE THEY DOING? By 2012, 94 of the 100 initiatives had been achieved. In 2013 added 80 new initiatives and committed to achieving them by 2020 Marks Spencer Plan A Marks Spencer
  72. 72. WHAT IS THEIR FOCUS? Marks Spencer Plan A Plan A has an incredibly broad remit but there are several key areas where they focus their efforts. Marks Spencer
  73. 73. PLAN A Social Responsibility Focus on local communities Environmental Issues Sustainable Business Practices Ethical Sourcing of products Customers’ health and wellbeing AGAIN, IT’S NOT JUST GIVING the MS example is something different
  74. 74. GENEROUS RETAIL MS specifically utilizes it’s power as a retail network of employees, stores and customers to make a difference Marks Spencer
  75. 75. I’M GOING TO COVER 5 AREAS Charities (McMillan, Marine Conservation Fund, Unicef) Schwopping Marks Start Spark Something Good Plan A and the environment
  76. 76. MACMILLAN CANCER SUPPORT As headline sponsor for the World’s Biggest Coffee morning, MS donate all proceeds from their cafes and sales of a limited edition line of homeware Marks Spencer
  77. 77. MS Plan A Report This annual one day event has raised over $6million dollars for Macmillan in the past 4 years Marks Spencer MACMILLAN CANCER SUPPORT
  78. 78. MARINE CONSERVATION FUND The Annual Big Beach Clean Up sees MS customers and employees teaming up to clean over 90 beaches in the UK on a single day hMS Plan A Report Marks Spencer
  79. 79. MARINE CONSERVATION FUND In 2015 they expanded the scheme to partner with the Canal and River Trust to add clean ups at an additional 45 inland waterways MS Plan A Report Marks Spencer
  80. 80. UNICEF Marks Spencer partnered with Children’s Charity Unicef to raise funds by recycling the hangers they use in their stores MS Plan A Report Unicef
  81. 81. FOR EVERY BOX OF HANGERS Customers choose to recycle at the cash register, MS donates 57p to Unicef, which doesn’t sound a lot, until you realize what it lets Unicef provide MS Plan A Report Marks Spencer
  82. 82. 1 BOX OF HANGERS Provides a child with clean drinking water for a fortnight, 3 boxes can feed a malnourished child for a year and 25 can provide a month of school classes MS Plan A Report Unicef
  83. 83. IN THE FIRST YEAR OF THE PROGRAM MS customers gave back 100 million hangers, generating over $500,000 in funding for Unicef Marks Spencer MS Plan A Report
  84. 84. IN THE SECOND YEAR Customers gave back 160 million hangers adding another $1,000,000 to Unicef’s coffers and allowing them to restart their operation in Bangladesh Unicef MS Plan A Report
  85. 85. A GENEROUS RETAILER Leveraging their people, their stores and the simple act of shopping to help their customers make a difference in the world Marks Spencer
  86. 86. SHWOPPING 1 billion items of clothing end up in UK landfills annually - 16 items, per person, per year. MS believes old clothes shouldn’t be thrown out, they should have a future The Drum
  87. 87. A PARTNERSHIP WITH OXFAM Clothes dropped off at MS are passed on to Oxfam where they are either sold, redistributed to countries in need, or recycled. None end up in landfills. Oxfam
  88. 88. AN INCREDIBLE START in the first 2 years 7.8 million items donated, $9 million raised for Oxfam Howard Lake MS Plan A Report
  89. 89. AGAIN, NOT JUST A DONATION A retail brand leveraging the power of its network of customers, employees and stores for the greater good Oxfam
  90. 90. MARKS START In some ways the most profound of the Plan A initiatives Martin Godwin
  91. 91. A WORK PLACEMENT PROGRAM …that focuses on those who face barriers when trying to find work…single mothers, those with disabilities or health problems and the homeless Marks Spencer
  92. 92. MARKS START A decade long program, offering anyone the chance to join this landmark retailer and giving them the training and support to make it happen Marks Spencer
  93. 93. !! !
  94. 94. ! !$# MARKS START VIDEO
  95. 95. THEIR MOST RECENT INITIATIVE Launched last month in London is called Spark Something Good Marks Spencer MS Plan A Report
  96. 96. HOW THEY DESCRIBE IT “We launched Spark Something Good as a way for us all - our people, our stores and customers to get out there and make a difference…” Marks Spencer MS Plan A Report
  97. 97. THE PLAN 24 Cities, 24 charities per city, 24 hours of service. What can we achieve in each city in a single, incredible day. Marks Spencer MS Plan A Report
  98. 98. A DAY OF ACTION Where we don’t try and boil the ocean, we make a difference in ways that are tangible, immediate and close to home. Marks Spencer
  99. 99. IN TERMS OF THE ENVIRONMENT Marks Spencer is #1 retailer in the 2015 Global Sustainability Rankings and the #2 business of any kind (Unilever is #1) Marks Spencer GlobeScan/SustainAbility Survey
  100. 100. Marks Spencer HOW DID THEY GET THERE? By 2012 MS hadn't just reduced their carbon footprint, they became carbon neutral. Every facility they operate is powered via sustainable energy credits.
  101. 101. Marks Spencer 5 YEARS LATER?…they remain the only major retailer in the world to achieve carbon neutrality. GlobeScan/SustainAbility Survey
  102. 102. MARKS SPENCER Represents the ultimate model of a Generous Retail Brand and offers a roadmap for the way forward
  103. 103. SO YOU MIGHT BE THINKING, GREAT! Look at MS, what a generous industry we are…alas there is still much work to be done…if you don’t believe me, consider the tale of Rana Plaza…
  104. 104. AND AS WE THINK ON THAT TALElet’s remind ourselves of the tenets of generosity that we began with…and see how retail’s actions measured up Weronika
  105. 105. The habit of giving without expecting anything in return. Farukh GENEROSITY:
  106. 106. Offering time, assets or talents to aid someone in need. Remember this idea, as we remember this tale… Wonderlane GENEROSITY:
  107. 107. On April 23rd, 2013 at the Rana Plaza in Bangladesh, local media sources reported that cracks had appeared in the building’s structure
  108. 108. This was a building designed for retail and office use, but which had been converted into a series of garment factories
  109. 109. Heavy industrial equipment had been brought into a building never designed for the structural loads and four upper floors had been added without a permit
  110. 110. Much of this clothing manufactured in this building was for western fashion retail brands, 28 of them as it turns out
  111. 111. A local building inspector visited the site and ordered it evacuated. In fact, when he saw the cracks, he literally ran from the building
  112. 112. The building’s owner declared the building safe, and the factories ordered their garment workers back inside
  113. 113. Due to practically non-existent workers rights they complied, after managers threatened to withhold a month’s pay from those that would not return to work the next day
  114. 114. At 8:27 the next morning there was a power cut. The banks of diesel powered generators on the roof kicked in causing intense vibrations.
  115. 115. 3,122 people were in the building at this time.
  116. 116. The building collapsed. 1219 people died, most of them almost instantaneously
  117. 117. More than 50% of the victims were women. Along with their children who were in the “nursery” on the lower level.
  118. 118. The building’s collapse is considered the deadliest garment factory accident in history as well as the deadliest accidental structural failure in modern times
  119. 119. Of the 28 western fashion retailers identified as having goods produced in this building, only 9 attended the initial meeting to discuss compensation to the families of the victims
  120. 120. Of those 9 companies only 4 agreed to pay compensation
  121. 121. It took two years in the courts to finally get the compensation paid
  122. 122. And despite the companies concerned making a collected annual profit of over $20billion in 2014, the compensation fund topped out at $30million.
  123. 123. Or $6,000 for each family who could prove they had a claim
  124. 124. Huffington Post To do the right thing, to make a difference, to show the world that there was another way. But at Rana Plaza, we failed. RETAIL HAD A CHANCE
  125. 125. THERE WAS ONE RESPONSE… Fashion Revolution Day, an Instagram campaign encouraging people to wear their clothes inside out to raise awareness as to where the clothes came from Stellamccartney
  126. 126. Had it’s heart in the right place…but did the garment workers, making $72 a month in Bangladesh feel the effects? How about #actiontrumpspurpose? Amylearns #WHOMADEMYCLOTHES…
  127. 127. THERE ARE SIGNS That retail is waking up to the challenge
  128. 128. EMPLOYEES AS VOLUNTEERS Like Timberland’s long standing and pioneering Path of Service program celebrating its 23rd year offering all staff up to 40 annual paid service hours Timberland
  129. 129. A CULTURE OF CARING 80% of Timberland’s staff participate, which is a staggering number in terms of employee volunteer programs Timberland
  130. 130. LEADING BY EXAMPLE The program recently celebrated its millionth hour of paid community service across the globe, and is an inspiration for others to follow Timberland
  131. 131. STORES AS STAGES Brands like LUSH have long realized their stores and their employees can act as powerful vehicles for raising awareness Lush
  132. 132. ATTENTION GRABBING STAGES In one of their more infamous stunts they got their entire employee base to work naked for a day in 2007 to raise awareness on unnecessary packaging Lush
  133. 133. AND SOMETIMES SHOCKING Like this protest against shark fin harvesting Lush
  134. 134. IN TERMS OF THE ENVIRONMENT Walgreens Net Zero Energy is hard to beat. A store which makes more energy than it consumes Walgreens
  135. 135. IKEA AND THE SWEDES IKEA has always been known as a generous brand
  136. 136. IKEA FROM COMMUNITY IMPROVEMENTS To employee housing, from actively improving the sites they develop, to water taxis in Brooklyn
  137. 137. JUST LAST MONTH They announced they would be the first major retailer in the UK to adopt the new “living wage” levels across all their stores, paving the way for greater good IKEA
  138. 138. THEN THERE’S LUXOTTICA Luxottica launched the Gift of Sight program 27 years ago to provide access to vision care in underprivileged communities around the world OneSight
  139. 139. TODAY Luxottica selects 1,000 volunteers every year to offer their skills and expertise at OneSight clinics across the globe, Luxottica
  140. 140. GIFT OF SIGHT IS NOW ONESIGHT A global, sustainable, non-profit organization that has changed the lives of over 9MM people in 40 countries, built from the actions of one retail brand… Luxottica
  141. 141. WATCH ALL THEIR VIDEOS Like their amazing Gambia film on YouTube…but for today, something a little closer to home… OneSight
  143. 143. BUT PERHAPS THE BEST EXAMPLE? CVS reported 2.4 billion dollar decision to remove tobacco products from their shelves. A gift of generosity for generations to come.
  144. 144. Can all this generosity actually make financial sense? Jeremy Schultz BACK TO OUR ORIGINAL CHALLENGE
  145. 145. Despite $2.4mm going up in smoke, CVS entered the Fortune 500 Top 10 for the first time this year. The only other traditional retailer on the list is WalMart. YOU BETCHA… CVS
  146. 146. And it just released record earnings for the second Quarter, thanks in part to a 5 point plan specifically designed to offset the losses from tobacco revenues YOU BETCHA… CVS
  147. 147. PANERA CARES Panera 60% pay full price, 20% pay nothing, 20% pay more. Cares runs at 80% of the performance of a regular Panera, proof that we can make this work
  148. 148. AND DESPITE A DECADE OF GRIPING …from shareholders MS was finally able to announce this year that it saves more money from Plan A than it spends on it. Marks Spencer MS Plan A Report
  149. 149. THE CASE IS CLEAR Retail, one of the biggest industries on planet earth can make an almost unfathomable difference to our world…if only we start acting with generosity…
  150. 150. It’s not that we are doing nothing
  151. 151. It’s just that we could be doing so much more…
  152. 152. OURS IS ONE FANTASTIC INDUSTRY Bringing joy to people on a daily basis. Let’s spread this joy and do the right thing…we really don’t have any choice, to quote a hero of mine…
  153. 153. Forbes BUCKMINSTER FULLER: “We are not going to be able to operate this Spaceship Earth successfully, nor for much longer, unless we see our fate as common. It has to be everybody, or it will be nobody.”
  155. 155. Please join the conversation #irdc2015 #generousbrands @FITCHdesign @cdaviesFITCH