Should retailers keep brands honest on their public commitments?
A new online retailer is going a long way to keep the brands it sells honest about their avowed commitments to environmental and social issues.
Toward, a luxury platform that sells fashion and beauty brands, launched earlier this month and requires brands that it sells to go through a rigorous vetting process, according to Adweek. Brands must pass a 100-question exam that assesses their commitment to their stated brand values. The platform furthermore curates product based on social commitments, allowing customers to filter companies along criteria like commitment to workers rights, responsible water usage, minority-owned status, vegan product availability and low waste production.
The Toward platform is meant to allow beauty customers to differentiate between brands with authentic environmental and social commitments and those engaged, at least as regards their environmental stances, in “greenwashing.”
Greenwashing, a term used to describe companies that fail to back up the commitments they make to environmental stewardship with real action, has become a frequent point of criticism as environmental awareness has grown in popularity with consumers.
In the beauty segment, greenwashing has become a hot button issue. Some companies are called out for displaying images on packaging that could mislead customers into believing a product contains “natural” ingredients, according to Real Simple. Part of the problem may be that the beauty industry in the U.S. is largely unregulated.
Concerns about greenwashing have grown elsewhere in retail as well.
A survey from June of 2021 from clean manufacturer Genomatica found that, in the fashion vertical, 88 percent of consumers say they do not immediately trust brands’ claims of sustainability and 51 percent believe greenwashing is common in the fashion world. Half of respondents said labeling to identify which clothing is sustainable would help them choose products.
Grocery has long experienced a similar concern, with consumer packaged goods companies cited for misleadingly marketing highly processed foods as “health food” through the use of undefined terms like “natural.” While the label “organic” has a specific meaning set out by the United States Department of Agriculture, the term “natural” has no specific regulatory meaning and does not speak to any guidelines adhered to during the making of the product.
- Consumers Are Wary of Misleading Brand Claims, So This Retailer Is Doing Some Fact-Checking – Adweek
- How do retailers and brands overcome consumers’ green skepticism? – RetailWire
- What is greenwashing? – Real Simple
- Ask UConn Extension: What Do the Food Labels “Organic,” “Natural,” and “Non-GMO” Actually Mean? – Uconn Today
DISCUSSION QUESTIONS: Do you see the enhanced level of vetting for social and environmental responsibility claims that Toward is implementing as being something that will set it apart? Do you see other retailers or online marketplaces taking similar steps in the years to come?
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6 Comments on "Should retailers keep brands honest on their public commitments?"
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Managing Director, GlobalData
This is a very useful function for those who wish to shop ethical and responsible products. In particular, being able to filter and rank by claim and know that this has been vetted is useful. I do think more retailers will allow consumers to explore brands by ethical attribute – indeed, some such as Target already do, albeit at quite a broad level with tags like “clean” for products that have eco-friendly ingredients. All that said, there is still a huge mismatch between what consumers say about shopping ethically and what they do. Perhaps providing more information and making it easier to find and buy ethical will narrow that chasm.
B2B Content Strategist
Yes. Consumers demand transparency, integrity and consistency from brands and retailers. Trust fuels sales, especially online and with premium products. Due diligence with product verification will set Toward apart.
More retailers and platforms will update their vendor scorecards to include proof of purpose-led action. Certifications and corporate social responsibility strategies will help brands compete, especially if their values align with retailers’.
Retail Industry Strategy, Esri
For every retailer the brands you carry are, by extension, a statement on your brand. Retailers know this and the savvy ones make adjustments to assortment and product mix based on their values and their brand. We see this all the time in retail. Companies like Walmart, Target and others have, in their vendor agreements, clauses that mandate compliance to their brand standards. As consumers become more concerned about these issues, I expect to see even more retailers implement these policies.
Retail Transformation Thought Leader, Advisor, & Strategist
There is a growing consumer segment that wants to shop exclusively for ethical, sustainable, and otherwise socially and environmentally friendly brands. That customer base will seek out this information and any retailer that makes it easy to understand the brand’s position on these factors will win those customers. I expect more retailers to zero on on some of these key attributes and promote those values with “badges” or other sorts of labels to make it easier for shoppers to find these products.
Over time, as this customer segment grows, retailers that make this easy will see increased lifetime customer value from those shoppers!
CFO, Weisner Steel
Sounds great but … I see a potential “free ridership” problem: presumably it costs Toward money to do this, but unless the products are proprietary to the site, there’s nothing to prevent someone from verifying a product on there, but buying it somewhere else. Of course they won’t do this unless there’s some price (or other) advantage on that(those) other site(s), which is to say I don’t think THIS ALONE will give them a competitive advantage.
There’s also the issue alluded to in the article: what will be the process for vetting vague claims … might a company object if its definition of “green” differs from Toward’s, and is accused of deception?
Transparency is so important today to discriminating shoppers. But there is a fine line between environmental responsibility and virtue signaling. Brands and retailers need to understand the difference and exercise discretion.