Consumers’ growing concerns around overall health, wellness and ethically-sound production are helping to influence a radical shift in the retail industry — leading to the proliferation of transparent, sustainably conscious companies and initiatives. According to Nielsen’s annual Global Corporate Sustainability Report, 66% of consumers are willing to spend more on a product if it comes from a transparent or sustainable brand.
It’s evident consumers are demanding socially responsible production of clothing and food,making transparency and traceability a clear business imperative.With technology, retailers can build trust with consumers by actively demonstrating traceability and transparency from end to end. By implementing a digital core and leveraging advanced technologies, such as IoT and blockchain, retailers can easily provide the information consumers want, such as quality, safety, ethics, environmental impact and more.
From Farm To Aisle
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Consumer behavior is driving food and grocery companies to adopt new initiatives through transparent marketing. Some of these initiatives include adding additional background information, such as naming the specific farms or listing all ingredients on labels, advertisements and web sites, to provide increased clarity throughout the supply chain. Whether it’s allergies (lactose intolerance, gluten-free), ethical standards (pesticide-free, organic, free trade, cruelty-free, free-range) or lifestyle choices, (paleo, veganism), consumers are beginning to ask more questions about the ingredients used in the production of their food.
Product content management solutions maintain a master log of data that enables consumer products companies to update product information in the event of any changes. This allows food companies to deliver an enhanced consumer experience while providing transparency and building trust. While nutritional facts, ingredients and allergens may be included in print, brands are now turning to SmartLabels such as QR codes to provide consumers with a wide range of information. They can provide consumers with up-to-date, real-time information on third-party certifications, social compliance programs, advisories and safe handling that’s managed directly by the CP company. For example, The Coca-Cola Company uses QR codes to provide ingredient definitions, GMO disclosures and contact information. With a quick scan on a smartphone, consumers can make informed decisions each time they purchase a Coca-Cola product.
Barry Callebaut, a manufacturer of high-quality chocolate and cocoa products, is another example of a brand using advanced technology to improve product traceability and quality control to embrace the initiative of sustainable farming. The brand provides small-holder cocoa farmers with an innovative cloud-based mobile solution that helps farmers monitor cocoa prices, determine the best time to go to market and manage the sale of their cocoa through electronic funds transfers via the app. With this level of detail, Barry Callebaut can trace its ingredients from the source through the entirety of the supply chain, giving consumers the transparency and trust they seek while assuring chocolate lovers everywhere they are buying a quality product that supports responsible sourcing. Throughout this process, Barry Callebaut is building goodwill among consumers by leveraging solutions that improve the lives of the smallholder farmers that supply their core product, cocoa.
From Weaver To Wearer
While concern around fair trade and organic food is more widely discussed, consumers also are starting to demand similar accountability for clothing. McKinsey & Company’s State of Fashion 2017 survey reported that sustainability is becoming an important new driver of consumers’ purchasing decisions. Not only do people want to know where the materials are sourced from, but whether the labor practices are ethical and the authenticity of an item.
Clothing company Everlanehas established a transparent supply chain by detailing the entire production costs of their products, including materials, labor, duties and markup, on their web site. Additionally, they include information on the factories where products are made, and provide pictures and videos of both the employees and factories. This gives Everlane’s consumers the opportunity to feel good about the ethics and background involved in their clothing purchases by outlining exactly what is involved in each piece of clothing.
Additionally, various luxury retailers are adopting technologies that help them to better trace the authenticity of product materials. Since these brands are commanding a higher ticket price, there is often an expectation coming from the consumers that the product will be of better quality. To assure brands that they are receiving the exact product contracted for with suppliers, as well as communicating this authenticity to consumers, , they are turning to blockchain, which tracks a product from the source of origin through its purchase. There are even some diamond suppliers that are now including a molecular fingerprint in their diamonds to ensure the gem was sourced in a conflict-free area.
A Clear Need For Transparency And Traceability
Thanks to technology, whether it’s the food they eat or the clothes they wear, consumers now expect and demand insights into the exact history of the items they purchase. To ensure and sustain consumer trust, companies are focusing on strategies that provide transparency and traceability from ingredient origination and sourcing to the point of sale. By making it easier for consumers to obtain the information they want — such as quality, safety, ethics and environmental impact — businesses can foster stronger, more authentic relationships. In turn, this will help yield better business results through improvements in brand equity, social sentiment and, ultimately, increased market share of the products that consumers desire.
Lori Mitchell-Keller is Global General Manager of Consumer Industries at SAP. In this role, she leads the Retail, Wholesale Distribution, Consumer Products, and Life Sciences Industries with a strong focus on helping SAP customers transform their business and derive value while getting closer to their customers. Mitchell-Keller brings over 25 years of experience in the software and consumer goods industries, including more than 15 years as an executive driving business strategy while building strong and sustainable relationships with customers, partners, financial analysts and industry experts.