More than ever, consumers are looking to shop with brands with purpose – those that share the same values as themselves. But how do retailers establish what their purpose is and how do they communicate it to staff and shoppers?
- 60% of shoppers have made more environmentally friendly, sustainable or ethical purchases since the pandemic began
- Businesses must work to “bridge the gap” between a company’s perception of its purpose and customers’ view
- Very Group says purpose is “more relevant than ever for our people and our customers”
There is a groundswell of socially minded consumers who, driven by fears of the future for the planet and the treatment of workers, are increasingly voting with their feet and shopping with brands whose values mirror their own.
This has picked up during the pandemic when consumers have gravitated towards smaller independent businesses and companies that are have been seen to do the right thing. According to Accenture, 60% of shoppers have been making more environmentally friendly, sustainable or ethical purchases since Covid-19 hit. Nine out of 10 of those said they were likely to continue doing so post-pandemic.
They are not alone. Investor activism is also a growing phenomenon with many investment houses now refusing to invest in businesses that have not divested from mining companies or tobacco producers or audited their own supply chains.
But what can retailers do to find and communicate their own purpose?
Pinning down purpose
Accenture strategy and consulting lead for UK and Ireland Rachel Barton says a good place for retailers to start is by essentially agreeing as a business on the customer need they are meeting and then finding a way to commercialise that.
For example, during the pandemic, many grocers leant on their true purpose – feeding the nation.
Early in the first lockdown, the grocers took action limiting the sales of products in high demand, such as hand sanitisers and toilet paper – actions some would deem unthinkable of commercial organisations – and kept online delivery slots for elderly and vulnerable customers. Morrisons even went a step further, setting up a food delivery phoneline for older and shielding people who were not used to using the internet.
The big supermarket chains also clubbed together, holding weekly meetings with Defra, to coordinate on things such as supply and strategy.
Morrisons chief executive David Potts said earlier this month: “I genuinely feel the company played its full part in feeding the nation and it’s properly been a company that’s been there for all stakeholders. The Covid crisis has accelerated the new Morrisons as a truly distinctive business.”
While times of crisis has made crystal clear what the purpose of some retailers are, McKinsey partner Arne Gast says there is often a “purpose gap” between what a company’s perception of their purpose is and a customer’s. This is also true between the senior leadership team and employees.
Gast says: “The only way to bridge a purpose gap is to embed your reflection, exploration, discussion and action in the heart of your business and your organisation”.
The Very Group did this when it nailed down its purpose which is “to make good things easily accessible to more people”, back in 2012.
In practical terms, this means combining the more than 1,900 top brands it sells (the good things) with a seamless shopping experience (making it easily accessible) and giving shoppers more flexible ways to pay (thereby opening it up to more people).
Chief people officer Sarah Willett says its purpose is the core around which Very hangs all of its strategies, on which business decisions are made and which people are hired against.
“Our purpose isn’t going anywhere. In fact, with more and more people shopping online, it’s more relevant than ever for our people and our customers,” she says.
All about the climate
If purpose should be distinct to each business, as both Gast and Barton believe, that raises another question. Why have so many businesses chosen climate crisis as a part of their wider purpose?
While this is not the most innovative or unique way of thinking, Barton says it is increasingly difficult for any business to resonate with customers or investors without addressing its impact on the climate.
“The climate is non-negotiable now,” she says. “Younger consumers, your millennials and Gen-Zs, are definitely driven by that purpose but we’re seeing that bleed into older consumers too.”
However, consumers across all demographics will not be fooled into thinking that any old company is really putting climate change at the heart of their business.
Barton says: “If you as a retailer or brand are putting yourself out there for something connected to purpose, you have to take that seriously. You have to cascade that purpose all the way through your organisation because consumers are pretty savvy. If they don’t see that authentically show up, they won’t do business with you.”
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An example of a retailer that has placed the environment at the heart of its purpose is Patagonia. In 2018, it changed its mission from “Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis” to the much clearer statement: “Patagonia is in business to save our home planet.”
Discussing this pivot with Forbes in 2019, Patagonia vice president of environmental activism Lisa Pike Sheehy said: “Our mission evolved out of direct experience. We’re all outside loving wild places and that directly translates into protecting them. We regularly leverage our employees to advise on where to invest resources since they are active in their local communities.”
In 2012, Patagonia became a benefit corporation, a business committed to creating public benefit and sustainable value in addition to generating profit, which Pike Sheehy said allowed the retailer to “take the long view and hold people, product and profits in balance”.
Patagonia’s sustainable purpose is a big reason that many shoppers are loyal to the brand. Barton believes there is a big opportunity to win new custom from shoppers that truly buy into your purpose.
Accenture refers to this as the “switching economy” and estimates it is worth over $6trn annually and is growing every year.
“What has driven the switching economy has traditionally been price. Then for a period, it was driven by service. What we’re now seeing as a driver of the switching economy is purpose,” she adds.
Communication is key
Having arrived at a purpose, the key then becomes how best to communicate that message to customers and staff.
Many brands have put their purpose front and centre of advertising campaigns. Look at Iceland, which in recent times has taken a lead on sustainable retailing such as reducing single-use plastic and palm oil.
The grocery retailer publicises these causes prominently in stores and even used its all-important Christmas advert in 2018 to highlight the impact that palm oil has on the environment, rebadging a Greenpeace animated short film about the destruction of its rainforest at the hands of palm oil growers.
Although the ad was banned for TV for being too political, the retailer won plaudits for the move.
Retailers publicising their purpose need to be authentic. McKinsey’s Gast says: “Artificial expressions of purpose ring false and stakeholders recognise inauthenticity”.
Empty promises are not looked on kindly. Iceland backed up its sustainable purpose by removing palm oil from its own-label foods by the end of 2018. It is also making progress towards its aim of eliminating own-label plastic packaging by 2023.
Meanwhile, Unilever, which declares that its purpose is to ”make sustainable living commonplace”, has vowed to sell brands if they fail to meet the company’s sustainability goals.
Timberland’s purpose-led London store
Footwear specialist Timberland opened the first of its international “purpose-led” stores in London in 2019, which a spokesman says had been designed and fitted out to drive home to customers the brand’s “decades-long commitment to make products responsibly, protect the outdoors and strengthen communities around the world”.
The 2,600 sq ft store, alongside a curated range, features real, potted trees, a full-height living green wall and natural elements throughout. The store also has CSR pillars that “empower the message, educating consumers on the recycled materials and responsible technologies used in the production of Timberland merchandise”.
Alongside the store layout and design, which reinforces Timberland’s sustainability credentials, store staff were trained to promote the sustainable credentials of the ranges and the brand itself.
“Our retail staff has a leading role to create a unique customer experience and a true Timberland Community. Thanks to dedicated training that reinforces our purpose and eco-innovation in our products, they are able to immerse our consumers into our brand values, and build a movement together toward a greener future” a spokesman says.
Since the store opening, the retailer has looked to open similar themed stores in Philadelphia and New York and ultimately hopes to remodel the bulk of its store estate across North America, Europe and Asia Pacific to the concept.
The opening of the store was part of Timberland’s sustainability targets such as using 100% ethically sourced cotton and leather, cut out the use of PVC plastics and planting 10 million new trees.
“A true brand purpose comes to life at every touchpoint of your brand, internal and external,” says the spokesman. “This is more than creating destinations that only draw in consumers to simply buy stuff, it goes beyond product and elevates the brand’s role as an enabler, facilitating meaningful interaction and sharing between like-minded people to create a true community.”
While it is important to get customers to buy into your purpose, it is equally important to have staff buy-in as well. This was Very’s main focus when it introduced its purpose.
“We set about a huge internal communications campaign, not only so our colleagues would recognise the phrase, but so they understood their own roles in delivering on our purpose,” says Willett.
“It was about helping everyone to personalise it and we did this through a series of team sessions and communications that highlighted how colleagues throughout the company were delivering on our purpose.”
Corporate purpose may be a difficult thing to pin down but consumers and staff alike already expect retailers to be doing more than just making profits. Those that cannot point to why they exist and why the world needs them will quickly find themselves becoming irrelevant.