Photo: Home Depot
What is retail’s role in building a better society?
Look around and you will see many examples of retail industry leaders taking definitive action to protect and serve public interests when other systems don’t or can’t. Top-of-mind topics are healthcare, gun safety and disaster response.
These are complex issues that impact stores, employees, customers and general public well being. They challenge retailers to balance business risks with loyalty, sales and profits. They also present growth opportunities.
Healthcare
I recently got a notice from CVS reminding me they quit selling tobacco five years ago. It was a bold move at the time. Since then, CVS and other retailers have expanded retail clinics, prescription services (like CarePass and PillPack) and insurance programs that increase access to healthcare of all kinds at a reduced price point. All major drug chains, supermarkets and mass merchants now provide alternative healthcare treatment options for consumers. These services could cut overall costs, promote the use of cost-effective preventive care at easily accessible locations and improve quality of life for many who are under- or not insured.
Public safety
The RetailWire Braintrust had a spirited discussion on Walmart’s recent decision “respectfully requesting that customers no longer openly carry firearms” and to discontinue sales of short-barrel rifle ammunition in the wake of more mass shootings. Walmart previously took steps to ensure store and customer safety in the past by raising the minimum age to purchase firearms and allowing only trained employees to sell them. Dick’s Sporting Goods, Target, Starbucks, Wegmans, Kroger, Walgreens and others have acted as well.
Disaster response, relief and recovery
The Home Depot’s Disaster Response Command Center is well known for stepping in to help in times of need, especially in response to hurricanes and other natural disasters. Lowe’s and a slew of 3PL’s also provide response, relief and recovery products and services. The retail industry ecosystem brings expertise, people, products and facilities that can provide and deliver supplies where they are most needed.
Given other systems aren’t enacting policies to improve health and safety — even though there is widespread public support — retailers are stepping in and up.
- CVS to walk away from $2 billion in cigarette sales – RetailWire
- CVS subscription program goes big to outdo Amazon Prime – RetailWire
- Poll: Most Americans Want To See Congress Pass Gun Restrictions – National Public Radio
- Behind the Scenes: Home Depot’s Hurricane Headquarters – Home Depot
- Would you go to Walmart to see a doctor? – RetailWire
- Will Walmart’s customers accept its rejection of the firearms status quo? – RetailWire
Discussion Questions
DISCUSSION QUESTIONS: Is it the responsibility of retailers to address gaps in society’s well being? Do you think that doing good correlates with doing well in business?
Poll
BrainTrust
Dave Bruno
Director, Retail Market Insights, Aptos
Lisa Goller
B2B Content Strategist
It may not be retailers’ responsibility to fill the void of “the public good,” but it is an opportunity for them. CVS and Dick’s took risks by dropping tobacco and firearms sales (respectively), and the moves have paid off over the long run. Target has donated 5 percent of its profits to local charities going back to its roots as a division of a department store company. You can’t put a price on the kind of goodwill these moves created.
Meanwhile, the trend is gaining speed as customers perceive their government failing to address the same issues — such as gun safety or the environment. Retailers can take a visible position on these issues (without wading into controversy) since they are the most consumer-facing industry out there.
The inaction of lawmakers is indeed opening up opportunities for retailers!
Waffle House gets my respect for their natural-disaster preparedness training and logistics protocols — they’re often the first to get lights on and food ready in local communities once the storm has passed, and their data backbone is strong enough to relay real-time information to where it’s needed.
Building resiliency and recovery ability into local communities should be a core function of many front-line businesses such as convenience stores and fast food. It’s an investment in the public good that also makes sound business sense.
Since companies and corporations are “citizens,” yes, I think they have a responsibility to act as a good citizen. This is not to suggest they replace government in any way, but good citizens help and contribute when and where they can. The examples in the article are terrific. CVS especially has woven good citizenship into being a core part of their brand promise. It’s a perfect fit. A win for all. Businesses can do nothing, or do something, and whatever choice is made it ultimately becomes part of the brand promise.
In my opinion, there is a big difference between taking a political position on an issue and doing something positive for the community. Indeed, the case of Home Depot, Lowe’s and other home centers donating materials, labor, and services to help hurricane victims is an excellent demonstration of how big business can do something positive to help those in need. However, when a company takes a political position standing for or against something that often alienates half their customer base and can do more damage than good. So retailers, especially the bigger ones, need to carefully evaluate what they will stand for and support and look at the whole picture. Goodwill programs like helping hurricane victims will win every time, but political ones, if the company feels they must take a stand, should be carefully examined because there is very little value in upsetting those that may not agree. Once you lose those customers, you may never get them back. Ironically, years later, a political sentiment may completely change, and the company will find out they gained absolutely nothing.
I couldn’t agree more, other than to point out it isn’t necessary to evaluate the P/R effect of “definite action” to find reasons to feel uncomfortable with it. The healthcare and public safety measures that Patricia cited are certainly hers to approve of, but other reasonable people may not (ask a 20-year old who wants to buy a rifle as a gift or for hunting how they feel about it). There are of course things we all agree on that retailers should do … they’re called laws.
Growing consumer outrage over plastic waste has made corporate social responsibility a retail priority. Retailers and consumer goods brands that demonstrate leadership by creating innovative, sustainable products and business strategies will gain an edge over rivals.
Lisa,
Do you really think retailers and CPG companies see addressing that outrage as a “priority”? And how much outrage is there in a retail world where consumers continue to ask for plastic bags, buy water in plastic bottles by the pallet, and shun bulk sales fixtures as unsanitary? I know the Twitterverse is concerned, but how about the mass market?
If retailers and CPG manufacturers are so concerned, why are they still handing out plastic bags, over-packaging, and bundling six packs of soft drinks and water in those lovely strangle-the-wildlife plastic rings?
I guess I’d rather see them reduce the problems they currently create rather than continuing existing practices until they innovate something better. I’m all for innovation and leadership, but the plastic waste problem you have identified is immediate and at this time appears all but intractable.
You’re absolutely right, Ryan: Not all retail companies take this issue seriously.
Yet retail leaders (including Walmart, Amazon, Kroger, Starbucks, IKEA, P&G, Unilever, Nestle and Coca-Cola) have recently made their sustainability programs more robust by adding new recycling initiatives, phasing out single-use plastic bags and utensils, and adopting eco-friendly packaging alternatives – even if they cost more.
These companies see proof from European markets that the war on plastic isn’t going away, so they must adapt to growing global scrutiny from consumers, investors and the media.
We all have a responsibility to have a positive impact on our world and to address gaps in society’s well being, and retail organizations are no exception. However, beyond being a responsibility, doing good also represents an opportunity for retail. This is really a no-brainer: helping the community helps build community. And we know very well that stores that thrive are stores that are active members of their community. The potential positive impact on stores that support their community is tremendous, and I would love to see more C-level attention on how to expand the role of the stores in their communities. It would be good for society, it would be good for the local employees, and it would be good for the bottom line.
Given retailers direct relationship with consumers and store networks they are in a unique position to take action to address consumers and society’s needs.
It is everyone’s responsibility. CPGs, retailers, and consumers must and should pitch in and help in areas that give back to the community or to communities that have been hit hard by natural disasters, etc. Yes, the government is ultimately responsible, but who are we as a society if we see the pain and just shrug it off and say, “not my job”? Doing things that help to build a better society, whether by Home Depot helping hurricane victims to rebuild, or Nestlé Waters handing out water is a good thing and should be recognized and rewarded.
Doing good always correlates with doing well, if you believe that reputation and brand equity matter. Awareness of needs that are community based and nationally needed motivate people and regardless of the controversy about corporations being people they are still made up of people in the C-suite and elsewhere. So it’s no surprise that retailers are taking up the gauntlets they perceive as necessary for a better society. It’s a win/win for retailers and citizens.
There is a huge philosophical break between asking if retailers have a responsibility to serve society and if it correlates with doing well in business. That would be the equivalent of an individual volunteering for a cause with the expectation that they will receive a job offer or some other form of payback down the road. That is not responsibility or volunteerism, it’s quid pro quo and that’s the problem when corporations “volunteer,” “donate,” or “support,” almost always they are looking for a goodwill benefit on the backside.
Real community support would be making a donation anonymously/quietly, giving paid time off to employees to volunteer (not wearing branded clothing), or similar altruistic mechanisms. If that doesn’t happen, it isn’t authentic “responsibility.”
Ken,
I totally agree (see my response to this question). It isn’t that one person’s philanthropy is another person’s exploitation, It is that, “intentionality” is one critical tool for assessing whether or not an action is “good.” An ethical individual — or corporation — acts in a consistent moral manner in all cases irrespective of whether those actions benefit them or result in some form of hardship or even death. If they aren’t operating without regard to personal or corporate consequences, it isn’t authentic moral or ethical behavior. The problem with the “doing well by doing good” argument is that it involves economic and/or political considerations. And if these types of outcomes are included in the corporate ethical calculus, the company isn’t really “doing good” at all — they are just making a strategic investment that directly benefits them in some way, (publicity, brand building, political standing, etc.,) while indirectly benefiting others.
Properly used, the word responsibility overtly, rather than implicitly, connotes the existence of an obligation. Must retailers address gaps in society’s well being? Obviously not. Should they address such issues? As members of the communities and larger society or societies they operate in, the answer is probably yes, but only if the scope of their efforts is clearly defined, consistent over time, sustained, and not exploitative. Ethics — individual or corporate — should never be an exercise in opportunism or selective application. For example, CVS has opted not to sell tobacco products, but they still sell products loaded with sugar and salt. If their corporate ethics call for the elimination of all products whose long-term use represents a potential threat to their customers’ health, their soft drinks, alcoholic beverages, candy, and many of their packaged food items containing high levels of sugar and/or sodium would have to go. So commendable as it may be, CVS’s move away from tobacco sales isn’t a move toward a full commitment to becoming “responsible” for shoppers’ well being. As to the old “doing well by doing good” issue — one could constantly be engaged with “doing good” and go bankrupt. Again, if CVS were to become consistent about its pro-health policies there’s no doubt it would experience significant — and perhaps even fatal — sales erosion. This reinforces why it is critical that any and all efforts at corporate social activism be clearly defined and consistent. Should Home Depot be engaged in the acquisition of property and the construction of low-income housing? Sure, if its corporate goal is really to help people in need. And even if it defines the mission parameters more narrowly, limiting its efforts solely to “disaster relief” where is the line drawn on how big a disaster has to be before it commands a corporate response?
As an academically trained philosopher, let me assure you crafting a coherent and consistent ethical policy isn’t work for amateurs. Beyond that, companies have to realize that “selective philanthropy” opens them up to potential criticism from activists, analysts, and the media. The road to hell, they say, is paved with good intentions.
NO! They do not have a responsibility. They may have beliefs or even find that the idea of doing good things adds to the bottom line. Yes, a better society may make more revenue. But companies, retail or otherwise, are companies and not people (or patriots) and their responsibly is to their owners.
For example, Arkansas ranks among the lowest states in education, but the area around Bentonville is one of the best in the country. Why? Because of Walmart’s investment into local education. It helps everyone in the area and helps Walmart in the future. Responsibility? No! Smart? Yes!
This subject is something my parents taught me when I was very little, and I’m so grateful for their teachings on the importance of serving the community. They said there are three Ts in serving others: your talent, treasure, or your time, all of which can benefit those who need help. The biggest impression left upon me was never ever to boast about the good things you do, because good works should be a part of your life. It was expected that I give back, and it became second nature to provide help when the community needed us. Also don’t expect anything in return for your efforts, as it goes against what true giving is. The best part is later on when you are down or a friend is struggling, something good happens, and that is your reward, which is a great feeling inside.
I believe whether you own a business or not, all of us should remember that we are capable of doing good things for others, and rather than trying to solve global problems, we should work to make our own a communities a better place. When other communities then do likewise, we are all better off. If you haven’t found a cause, they are out there — so enjoy the effort, as it is worth it.
Great thoughts, Patricia! Although it can be debated if it is the responsibility of retailers to fill gaps in social public policy, I believe invariably that private enterprise solves problems better via innovation that government regulations ever do. The side benefit is goodwill awareness for the retailers that the marketplace appreciates.
Stores are local. They rise and fall with the communities they serve. Many do good works out of a sense of pride, others out of “enlightened self-interest.”
Chains are remote. Some may regard “corporate social responsibility” as a shareholder value checkbox for their annual report. Others may bake CSR into their essential culture out of genuine belief. There’s a spectrum of ways that retailers can have a positive effect, ranging from straight-forward charity, to hiring and compensation policies, to merchandising choices, to environmental practices, and more.
These decisions may influence brand reputation and ultimately shopper loyalty. As a confirmed cynic, I tend to believe that economic interest usually drives retailers to adopt socially constructive policies.
That’s OK with me. Sometimes in an organization purity of intent can emerge as the result of positive actions, even if they are undertaken for selfish reasons.