American Express did its market research before joining the Red partnership. According to Gail Wasserman, the company's vice president of international public affairs and communications, "There are 1.5 million conscience-consumers in the UK who make decisions about brands based on social and ethical values—it is an audience with increased affluence who can choose where and how they spend their money. The market is currently worth £4 billion [US$ 7.44 million] annually and is growing."

Product Red launched in the US in mid-October with some of its partners introducing products, notably Apple's Red iPod Nano. American Express will first be evaluating the uptake in the US before taking steps to introduce its American Express Red card—which donates 1 percent of its revenue to the Global Fund.

The Challenge for Brands
Whether the latte activist will have a wider range of "good" purchasing choices in the coming years will depend on how other large brands respond to this new market. Consumers are still generally cynical about big business and big brands. On the flip side, it can be a risk for big business to invest in responsibility-led campaigns—even if they are already doing participating behind the scenes—particularly for those brands that have been exposed over the years for poor business practices. Any attempt to position a multinational brand as "responsible" opens the brand to potential criticism about other areas of its business (as what happened to Topshop). Also, the financial rewards of targeting the conscience consumer for the big brands are currently uncertain: some believe that retail's conscientious consumer will be as large an audience as purchasers of organic food—but the fashion market is a little more fickle than the food market.

Most brands still opt for the easier route, using corporate responsibility as a mechanism for inspiring employees (through offering volunteering initiatives and partnerships with not-for-profit organizations, for example) and to enhance a company's reputation internally rather than focusing on the consumer. Their tactics are aimed at investors, non-governmental organizations (NGOs), clients, and employees. Consequently, the responsible agenda remains within the corporate affairs or internal communications department and does not always extend to the design and procurement teams.

Other companies, such as Sky and Virgin Group, have recently started promoting responsibility through their leaders: James Murdoch, CEO of British Sky Broadcasting, and Richard Branson, head of Virgin Group, have both taken a stance to tackle climate change and carbon-emission reduction through their companies. Sky is the first major media company globally to become carbon neutral, a certification based on the company's efforts to measure, reduce, and offset its carbon emissions; the company also awards £1,300 (US$ 2,436) to employees who buy hybrid cars. So far, though, neither Sky's nor Virgin's customers experience the company's attempts at responsibility directly at their level. Similarly, Nike often speaks to its peers as a learned leader on labor issues in the footwear and apparel sector, but this has yet to be communicated to customers in a meaningful way.

It may only be a matter of time before these brands make moves in the consumer space, and Sky certainly has plans in to promote green thinking to its customers: "We think the brands that are in tune with the values of their customers are more successful," says Ben Stimson, Sky's director of corporate responsibility. "Climate change is an issue of concern to our customers and that's why we've taken steps in this direction." Sky has already increased its coverage of environmental issues. It will be also be using its technicians, who make home visits, as messengers to inform customers on how they can save energy and reduce carbon emissions themselves.

No Substitute for Real Responsibility
Whether it's a trend or a long-term prospect, responsible selling to a new audience is still no substitute for fundamentally responsible business practices. Motorola may be a highly visible Red partner, but its phones are part of an industry with serious human-rights issues: a key phone component, the metallic ore coltan, is sometimes sourced from war-ravaged Congo in Africa (though Motorola claims it sources from legal suppliers). Garment companies Gap and M&S are among brands damaged by allegations of child labor in the supply chain (unsubstantiated, in the case of M&S—and both companies now follow strict codes of conduct and inspections). Targeting the responsible consumer is only a segment of a whole responsible brand approach—resources must also be dedicated to improving business practices within the sector, particularly among the less visible brands.

Yet these companies offer an issues-related model that sets an example for other brands. It takes a step toward closing the gap between the consumers who are demanding "responsible" products and buying options, and the reluctance of brands to get involved in issues because they can't foresee the rewards or fear a negative consumer response. Responsibility can also differentiate a brand, according to Ralph Ardill, founder of The Brand Experience Consultancy:

"As global competition for hearts, minds, and wallets intensifies, it will no longer be a question of whether a business should practice responsible consumerism. This will be expected and demanded—while becoming another point-of-entry hygiene factor. What will increasingly differentiate brands are the quality and sustainability of this responsible consumerism. Brands whose organizational purpose, vision, and values are driven by this are set to flourish. Those that are simply looking to promote an ethical veneer will be quickly outed and become obsolete."

Companies—and their brands—are key players on the global stage, and individuals have the power to effect change through their buying choices. The benefit of a brand using its marketing power to contribute responsibly can surely outweigh the cynicism or option of doing nothing at all. As Motorola's Dale says: "Motorola doesn't just want to be a great company, but a good company. It's not about the coolness of cause-related marketing—it's about wanting to make a difference." And there is still plenty of room for creative innovation in responsible retail.    

[23-Oct-2006]