Ethical Branding Is On the Rise and Retailers Need to Pay Attention
Why "doing good" is becoming a retail requisite
When consumerism is at its peak, many of us will have a hard time applying words like “ethical” or “sustainable” to our purchasing habits.
As a culture, we consume too much, we buy goods we don’t need, and we contribute to the detriment of the environment—sometimes without self-reflection or recognition.
Most of the marketing we see day-to-day includes fast food, pharmaceuticals, or cosmetic brands that might’ve used harmful ingredients in their products.
None of us would classify these brands as “ethical” or “sustainable,” so how do we determine what a truly “ethical” brand is and the steps they’ve taken to achieve that status?
How to classify an ethical brand
Behind every brand is a company, and every company has values, strategies, and operations in place that are open to interpretation by consumers. Because of this, an “ethical brand” can only exist when the public recognizes a company’s determination to promote good.
Specifically, an ethical brand acts morally, recognizes its social and environmental responsibility, is accountable for its actions, and creates value for its customers and stakeholders via these initiatives.
When it comes down to it, truly ethical brands need to embody the word “ethics” within everything they do. They must build a strategy towards maintaining long-term sustainability for themselves, the environment, and the customers they serve.
With power comes responsibility
No doubt, retail giants like Amazon, Walmart, and Costco have a lot of power in society. Not only do they influence consumer purchasing patterns on a massive scale, but some have an influence on government policies, state and local legislation, and greater social behaviors.
We are raised to believe that “with power comes responsibility”, but that’s not always the case when it comes to the corporate bubble. There are certain retailers that put profits above all else, but more than ever, the public is taking notice. The digital age has connected consumers and allowed them to create and send messages to the world at large.
In an overcrowded marketplace, these digital messages can make or break a brand’s reputation. Not only is it advantageous for a brand to be socially and environmentally conscious, but they may need to do so in order to expand their audience and beat out competitors.
Further, the owners and chief executives of well-known brands are more recognized than ever on platforms like Twitter and Instagram. When they boost ethical commitments online, their reputation improves and they build brand loyalty.
Ethical branding is good for business
Some companies will and have already adopted ethical and sustainable practices, but others will treat “sustainability” as a buzzword and neglect to make social and environmentally friendly commitments.
When this is the case, it’s likely a sign that a company is more talk than action. Consumers expect transparency from retailers these days, so when it’s not received, they will boycott products and services.
In fact, a 2017 study by Cone Communications found that 82% of consumers say they will hold a company accountable to share social or environmental commitments with the public.
A tertiary group of retailers has stated that it’s too expensive to give in to social or environmental commitments, but recent numbers suggest most of the public are willing to pay more for goods that demonstrate sustainable practices.
In the past, retailers needed to focus on business sustainability. But now that’s become one-in-the-same with environmental sustainability. A growing percentage of online retailers have taken steps like offsetting emissions associated with shipping or donating to popular organizations like Friends of Trees and the Nature Conservatory, but it doesn’t stop there.
Companies who wish to showcase their social and environmental results can become B Corporation certified. Obtaining this certificate is one of the more thorough and rigorous methods a company can go through to claim the title of an “ethical brand,” and there are usually only a few thousand certificate holders at once.
Becoming a B Corporation, donating to environmental organizations, and offsetting emissions contribute to an all-encompassing ethical or sustainable brand, but who’s to say what’s ethical if not for consumers, themselves?
Patagonia has set a high bar
Highly successful ethical brands not only make these commitments but they are recognized by the masses because of them, too. Of the bunch, Patagonia has set itself apart in a number of ways.
Verbatim, Patagonia’s mission statement is to “build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis.” They’ve set a high bar, but it’s not just because of their products.
The team at Patagonia is invested in environmentalism and they’re transparent about it, too. They produce numerous reports annually that include data and talking points about their carbon footprint, social impact, and future commitments.
Patagonia is also a certified B Corporation, they donate millions to grassroots organizations, invest in carbon-neutral solutions, and are working towards higher wages for all their works.
However, many of these steps are taken behind the scenes and consumers aren’t always aware of the company’s carbon data or investments. Most of us come to understand the brand as ethical because of its activism and social media campaigns.
Patagonia’s employees are encouraged to volunteer, become activists themselves, or participate in protests—all under the umbrella of the brand. This is key, as Patagonia’s products are now synonymous with the work that’s being done both behind the scenes and on social media.
Likeminded retailers will need to follow a similar recipe if they want to reach comparable levels of success as Patagonia.
Ethical branding will translate to more loyal customers
No doubt profiting is and should be a priority for retailers, but it often comes at the expense of customer relationships, ethics, and reputation.
Putting these benefits on the sidelines may seem like the obvious choice when a lucrative deal comes around, so why is it so important that brands stick to ethical or sustainable commitments?
Not only do ethical companies often-times outperform their peers, but following through on these kinds of commitments breeds brand loyalty. In Patagonia’s case, they’ve built a following who will be by their side for decades to come, and for good reason!
Brand loyalty is one of the most effective ways a brand can withstand the relentless pressure of market competition, but it doesn’t come easy in the digital age.
When it comes time to boost “ethical” branding on social media, retailers will need to use the communication tools they have at their disposal to send authentic and transparent messages to their audience.
These messages should include a promise to ethics and sustainability, but they also need to foster relationships, connections, and trust—and sometimes that takes years to accrue.
Retailers have an opportunity to create change
When we observe the most successful ethical brands, we take note of their commitment to improving just as much as their commitment to meeting current standards.
A brand’s values, actions, and commitments change over time, which makes it hard to draw a line between “ethical” and “unethical” behavior. However, consumers can tell when ethics are at the core of a brand—when a company is dedicated to its cause and taking action against injustice.
Consumerism is and has been on the rise for much of the modern era, but that doesn’t necessitate a marketplace of waste. Retailers will take steps towards ethics and sustainability, and their customers need to hold them accountable. A truly ethical brand cannot be defined by a corporation itself, rather the public must acknowledge steps taken and the transparency of the message.
As e-commerce becomes more prevalent in light of the global pandemic, online retailers have an opportunity to change public opinion and standards when it comes to ethical and sustainable practices in the digital revolution.