The apocalypse of traditional bricks and mortar shops is regularly trumpeted in the media. Yes the sector is changing and yes there are many new ways of buying stuff and yes the wonderful world of the web has had an impact on how we buy stuff. Yet we all still go into shops and interact with a real person on a daily/weekly/random basis.
Alongside the seismic shift in retailing there is another shift that is not so seismic and has been around for a long time. And that is the interaction of retailers in their communities. It now has a smart title of Corporate Social Responsibility or CSR. Is this a new trend or an old idea?
I was prompted to write about this as I recently delivered a presentation to the Inver Dealer Conference in Limerick on “Your Business in Your Community”. Inver have been committed to this concept for a long time but more on them later.
The Macro Picture – Corporate Social Responsibility
Corporate Social Responsibility or CSR is now a feature of many large companies’ annual reports. Business in the Community Ireland is a charitable organisation that advises companies big and small on CSR and Sustainability. Their definition of corporate social responsibility is that it:
…..refers to companies taking responsibility for their impact on society. It is a concept whereby enterprises integrate social and environmental concerns into their mainstream business operations on a voluntary basis.
CSR goes beyond compliance with legislative requirements. It is a voluntary concept, which is led by business. It is a process which maximises the creation of shared value through collaboration with all stakeholders and ensures that the interests of enterprises and the interests of wider society are mutually supportive.
Working with charities and causes is still a great way for businesses to be part of their communities but it is now about so much more. There are some emerging factors that will affect retailers as well as other businesses.
The Circular Economy
A circular economy is an alternative to a traditional linear economy (make, use, dispose) in which we keep resources in use for as long as possible, extract the maximum value from them whilst in use, then recover and regenerate products and materials at the end of each service life. www.wrap.org.uk
The traditional linear economy and our current throw away consumption culture is unsustainable. According to the WWF, 20,000 litres of water are needed to make enough cotton for just one T-shirt and a pair of jeans (1kg of cotton). The average lifetime of an item of clothing in the UK is estimated at just 2.2 years.
So what has this to do with CSR and communities? Your customers are your community and your values need to be in step with theirs. The conversation around single use plastic is a case in point. The Circular Economy will become increasingly relevant, not least because it is a key part of the Revised EU Waste Framework Directive 2018/851. This brings me neatly on to the next point.
The Triple Bottom Line
The bottom line of a business refers to its profitability but this is only one measure of a company’s output.
The phrase “the triple bottom line” was first coined in 1994 by John Elkington, the founder of a British consultancy called SustainAbility. His argument was that companies should be preparing three different (and quite separate) bottom lines. One is the traditional measure of corporate profit—the “bottom line” of the profit and loss account. The second is the bottom line of a company’s “people account”—a measure in some shape or form of how socially responsible an organisation has been throughout its operations. The third is the bottom line of the company’s “planet” account—a measure of how environmentally responsible it has been. The triple bottom line (TBL) thus consists of three Ps: profit, people and planet. It aims to measure the financial, social and environmental performance of the corporation over a period of time. Only a company that produces a TBL is taking account of the full cost involved in doing business. The Economist 2009
As mentioned above these measures are beginning to feature in company reports, sometimes as part of the CSR reporting. Pursuing profit alone could be at the expense of the environment as with the production of cotton to produce our pristine white T shirts.
As to the people bit, this goes to the heart of community. Providing fulfilling work which respects workers and offers a living wage are the most basic of requirements of a business owner. However in today’s changing world the very nature of work is evolving at a rapid pace.
The Changing Nature of Work
The gig economy, zero hours contracts, “always on” employees and the uncertainty of Brexit and other world events all contribute to a landscape of work that was unimaginable a couple of decades ago. The gig economy and zero hours contracts lead to an insecure income which has an effect on the individual’s ability to be able to plan for some of the most basic of life events such as childcare, medical appointments and even just having a social life. The connectivity of employees means that they are always available, answering e-mails on the commute to work and on days off.
These are all challenges for employers to strike a balance to have a responsible business that reflects their “people” part of the triple bottom line.
The Micro Picture – on the ground
So much for the macro picture but what’s happening in real live retailers?
Back to Inver, whose “Leading Lights” initiative goes right into local communities around their 55 forecourts. Leading lights provides local support to organisations in the areas of education, technology, children and family. Indeed community was the theme of the recent dealer conference.
Lidl entered the Irish market 19 years ago and has helped to change the face of supermarket retailing. They have also embraced the concepts of CSR throughout their operations. You can see the importance of the triple bottom line in their website dedicated to their CSR programme. This is an impressive range of activities that outshine many other larger retailers.
So what can you do?
Small independent retailers have been at the heart of communities throughout Ireland for decades, supporting their local GAA clubs, schools and charities. However, if you are a small retailer and don’t have the resources to do a comprehensive programme, then think about what you can offer your local community.
- Are you a bookshop/café/gift or craft shop? Offer a space in your shop for a local book club/knitting circle/craft club to meet. You can limit the numbers and arrange a time that suits your trading pattern.
- Do you have a skill that you can demonstrate in your shop? It could be as simple as how to gift wrap beautifully, something I always struggle with! Publicise it on your social media and put up a poster in the window.
- If you sponsor a local sports team/choir/school then make sure you get some credit for it via a photo op, social media or logo.
- Tell your customers what you are doing and incorporate it into your marketing plan – first have a marketing plan!
Retail is an ever changing sector as it responds to changes in the marketplace and changes in our customer needs. One constant factor is the need that we all have for human interaction. People do business with people. Small retailers have always been at the heart of their communities so celebrate this and stay in touch with your customers in your community. We can all learn from the each other, big and small, to keep our doors open long into the future.
© Retail Renewal 08/03/19
Retail Renewal offers practical solutions for the ever-evolving challenges of running a retail business today. Find out more on www.retailrenewal.ie If you’d like to get in touch with Retail Renewal about your retail or business project please give Linda a call on 086 8146949. Let us help you to grow your business and your profits.
Image: Letterkenny Chamber of Commerce sponsoring the St Patrick’s Day Parade 2018