Transparency, Connected Consumers and the Importance of Knowing Your Supply Chain
Cashion East, Technical Specialist at PRé, discusses the positive and negative influence the Internet and social media have had on the consumer’s relationship with your company’s brand. And when it comes to sustainability, even your supply chain partners can have a negative influence on this new and more transparent relationship with consumers.
In today’s increasingly connected world, consumers have never had the level of access to interact with brands and brand owners as they do now. Social media and device technology allow brands and marketers to connect directly with individual consumers on a larger and larger scale every day. This connection not only gives brands direct access to their consumers, it also lets consumers share information easily and quickly with other consumers. A 2013 study by The EXPO Communications Group indicated that 80% of consumers connect with brands via social media at least once a month, and 25% of consumers post to or about brands at least once a week. This rapid sharing of information, coupled with the increasing consumer awareness and preference for “green” products, makes transparency in supply chains particularly important for global brand owners when developing their sustainability strategies.
This unprecedented flow of information and direct connection to consumers creates enormous opportunities for brand owners. Brands are now engaging in two-way conversations with consumers via social media sites. Levi Strauss, General Electric, and Danone have all seen success from positive social media sentiment on sustainability issues. Green Mountain Coffee Roasters used a social media campaign to promote a fair trade coffee product, and saw a 67% increase in sales. The campaign was shared widely by consumers and celebrity spokespeople, and reached over 8 million individual consumers.
However, this flow of information is difficult to control, and news of negative events can also spread quickly. Negative environmental events, or a negative public reputation can have enormous consequences. BP will spend years repairing its brand (valued in the billions), which was damaged during the Gulf of Mexico oil spill of the summer of 2010, a disaster followed closely on social media. BP’s stock lost over $25 billion in value in the months following the accident, for which BP insisted two of its supply chain partners were also responsible. While having complete control over a supply chain may be beyond a company’s reach, having adequate knowledge of and visibility into supply chain partners and their practices is paramount when facing issues such as these.
Another case in point–following an outpouring of negative sentiment and consumer pressure, McDonalds, Burger King and Kroger, among others, have all condemned or begun moving away from suppliers who use gestation crates for pigs because of animal welfare concerns. Both Apple and Walmart have faced pressure by consumers and investors because of poor working conditions at supplier factories. And consumers expect brands to be honest about their sustainability efforts. 78% of consumers would actually boycott a product if they discovered that its environmental claims were misleading. Issues such as these can severely damage a brand’s consumer reputation, and often are not under the direct control of the brand itself.
Consumers have never had more access to information or more channels for communicating about the brands they buy and use every day. While this is a great opportunity for spreading positive sentiment about those brands, it also presents a heightened risk for propagating negative perceptions as well. More and more organizations are understanding the importance of this connection and are looking outside of their own four walls and into their supply chains to identify and manage potential sustainability issues. In an increasingly transparent world, where information is spread instantly across the globe, it is more important than ever that brands both understand and manage sustainability in their products and supply chains.
Cash worked for PRé as a Senior Sustainability Consultant from 2012 to 2017. His areas of expertise included sustainable return on investment, sustainable supply chain collaboration, and sustainability performance. For PRé, he lead the development of tailored sustainability software tools for the Sustainable Apparel Coalition, among many other projects in sustainable development and sustainability integration.