Retailing with purpose: How the pursuit of social ... · PDF filedevelopers,and retailing as a...

© HENRY STEWART PUBLICATIONS 2045-855X JOURNAL OF BRAND STRATEGY VOL. 2, NO. 2, 155–169 SUMMER 2013 155

Gwen Morrison,The Store — WPP’s Global Retail Practice,233 North Michigan Ave,16th Floor,Chicago,IL 60601,USA

Tel: +1 312 596 3201E-mail: [email protected]: wpp.com

Anneliza Humlen,Social Voice LLC,1 Little West 12th Street,New York City,NY 10014,USA

Tel: +1 917 512 8194E-mail: [email protected]: socialvoicebranding.com

Retailing with purpose: How thepursuit of social responsibilitycan inspire and sustain retailgrowth and innovationReceived (in revised form): 28th February, 2013)

GWEN MORRISONis co-CEO,The Store,WPP’s Global Retail Practice. Her career has been devoted to brands in the retail space.AtThe Store, Gwen is responsible for extending WPP’s leadership in retail innovation and supporting global resourcesfor WPP group companies across the Americas and Australasia. Gwen is charged with identifying issues and trendsmost important to retailers and FMCG brands around the world. She promotes best practices throughout the retailmarketing community and has contributed to Harvard Business Review and Brand Week.

ANNELIZA HUMLENis President and Founder of SocialVoice LLC. She is a brand strategist, development leader, culture-change catalyst,speaker and writer, with over 15 years’ experience creating meaningful brand connections to people, shared purposeand social interests that matter. Anneliza created the SocialVoice (a registered trademark of SocialVoice LLC)programme in 2009, which builds brands through social engagement, corporate culture and mentored development.She is a member of the World Brand Congress Advisory Council and is endorsed by leading industry forums such asthe Toronto Sustainability Speakers Series and Sustainable Brands for excellence in corporate social responsibilityand social communications.

Abstract

This paper is based on a presentation given by the authors at the Sustainable Brands Conference inSan Diego, 2012. It builds upon best-practice retailing examples spanning developed markets such asthe UK and USA, as well as developing markets such as Brazil, Peru,Turkey, South Africa and China.Theauthors share their collective experience drawing from their current work and global studies.The papershowcases success stories of retail leadership guided by a conscientious commitment to purpose overprofit.The authors present an inspiring range of examples and describe the different ways that ‘retailingwith purpose’ can manifest itself and make a meaningful social difference. From retailers, retaildevelopers, and retailing as a practice, the paper illustrates how concepts such as ‘place-making’,community and employee culture building and sustainable business practices are essential for the valueof retail to evolve beyond price or promotion. Many of the examples in this paper have not onlysurvived the recession, but actually thrived while competitors have competed on price, promotions andcutbacks. Moreover, they sustained growth, made innovative offerings, and grew customer base andloyalty.They are proof that a business strategy driven by purpose over profit can ultimately be the mosteffective and enduring form of innovation and success at retail.

Keywordssocial responsibility, CSR, sustainability, retail with purpose, place-making, retail, social purpose,community, leadership, innovation, civic, marketing

INTRODUCTIONCommunity and consumer strength on alocal level is critical not only for sustaining

local business growth, but for fuellingnational and global economies. Accordingto the Project for Public Spaces and trends

Gwen Morrison

Anneliza Humlen

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MORRISON AND HUMLEN

156 © HENRY STEWART PUBLICATIONS 2045-855X JOURNAL OF BRAND STRATEGY VOL. 2, NO. 2, 155–169 SUMMER 2013

analysed in Steve Davies’ report, ‘Thinkglobal, buy local’,1 local communities arenow the catalysts for regional and nationalgrowth,rather than the result of it.Retail ona local level is the first to benefit from thehealth and prosperity of local communities.Conversely, it is also the first to feel localeconomic and financial strains.

It is therefore in the best interest ofevery business to contribute to the socialhealth and wellbeing of the communitiesit serves. Most local small businessesunderstand this concept intuitively as theyassume the role of both proprietor andlocal citizen. But when it comes to largerretail formats or retail chains, the connec-tion and sense of duty to the local com-munity does not come naturally. It is nowonder that large, big-box retailers andretail developments are often seen as for-eign entities and counter-cultural to localcommunity interests. Despite efforts atcause marketing, local philanthropy sup-port, or adoption of socially responsiblebusiness practices, a retailer’s good will isoften ignored, ineffective, or worse, it isdeemed as being disingenuous.

What is the reason for the scepticism ormistrust? The answer lies in the intensityof the emotional commitment by businessleaders to pursue purpose over profit.

Emotion and excitement, as is wellknown, can be infectious.This same prin-ciple holds true for emotional disconnect.Through collective experience, theauthors have found that the driving forcebehind the most successful retailer-ledsocial responsibility (SR) efforts is aleader’s emotional commitment tomaking a positive difference. The retailleaders in this paper are unique, becauseunlike most others, they go far beyondbeing supportive of SR-related issues.Instead, they actively lead such efforts andpromote awareness of such issues. The difference they make in the lives of people

and their communities transcends transaction.

A business leader’s inherent sense ofSR has a direct impact on the way theycontribute, see and solve social issues.Theemotional drive they embody and inspirein others shapes the mindset and fuelsbrave new possibilities throughout allaspects of business. In contrast, when SRcommitments are made for purely opportunistic reasons, the guiding princi-ples of ‘profit first and purpose second’thereby limit perspective and the oppor-tunities for creating meaningful socialvalue. In the words of Henry Ford, ‘A business that makes nothing but money isa poor business,2

Retail devoid of a meaningful emo-tional connection and a satisfying con-sumer experience, is at best ‘commerce’.When retailers lose sight of this distinc-tion, all they can compete on is price andconvenience versus customer preferenceand satisfaction of service. The focus onproduct sales over meeting the true needsof the people results in a retailer actuallylosing competitive ground. So if access tothe product and price is no longer enoughof a competitive difference at retail, howelse can people decide which retailers tosupport and trust?

ACTIONS SPEAK LOUDER THAN WORDS

‘A brand is a living entity — and it isenriched or undermined cumulatively overtime, the product of a thousand small ges-tures’ (Michael Eisner, former CEO ofDisney)3

Retailers must be cognisant of howactions transcend marketed communica-tions and media. This would include aretailer’s support for a social cause orcommitment to SR business practices.

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Panera is a great example of industryleadership that is both profitable and purposeful. Over the last decade, underthe direction of Ron Shaich, Founder,Chairman and co-CEO (Figure 1), it hasbecome the second-best performingrestaurant stock, and the second-best performing consumer stock in the S&Pconsumer index. Panera has grown into anational chain of nearly 1,600 bakerycafés across 40 states and Canada.

‘For many years, Panera has practiced theprinciples of conscious capitalism — orwhat we like to call “enlightened self-interest” — in two ways. First, we regardprofit as merely the byproduct of servingsociety and a broad range of stakeholders.When we deliver value to our customers,employees, vendors, investors and commu-nity, profit follows. Second, we focus on ahigher purpose, above and beyond short-term results’ (Ron Shaich, Panera Founder,Chairman and co-CEO)4

Ron Shaich also serves as President of thePanera Bread Foundation, which isresponsible for the launch of the inspiring‘Panera Cares’ initiative — dedicated toaddressing issues related to foodinsecurity. The Panera corporate dedica-tion to serving a higher social purpose ledto the launch of the first Panera Carescommunity café in May 2010 in Clayton,MO, with additional locations such asChicago opening subsequently (Figure 2).

The Panera Cares Café has much ofthe same environment vibe as Panera’sregular cafés. The difference is that uponentrance will you see a menu — but noprices. Upon placing an order you willnot be given a bill or receipt; rather cus-tomers are served, but not required to payfor the meal. Instead they are asked to paywhat they can afford and feel is a fair pricefor their order.

The Panera Cares Café concept is abrave and bold experiment in human

Figure 1 Ron Shaich, Panera Chairman and co-CEO

Figure 2 The ‘Panera Cares’ community café

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nature. It is not intended to be a replace-ment for social welfare programmes suchas soup kitchens, which give away freefood to those in need. In Ron Shaich’skeynote presentation at SustainableBrands in 2011, he talked about his visitsto soup kitchens and how sad and un-motivating the soup kitchen experiencecan be. He recalled how little hope therewas in the experience from waiting inlines, and the social atmosphere. For mostpeople, the notion of accepting a ‘hand-out’ weakens their self-confidence andsense of dignity.

The Panera Cares Café allows all,regardless of financial ability, to be treatedas a welcomed customer, who feels bothvalued and respected. For those whocannot pay, there is a barter optionoffered. This allows them to earn theirmeal in exchange for the opportunity tohelp with tasks such as wiping tables orclearing dishes. Once the tasks are com-pleted, the meal voucher is then droppedinto the donation bin to signal theexchange of goods and satisfaction of pay-ment. The empathy and care for humandignity is inspiring for employees, cus-tomers and community.

‘We were trying to change the corporate-giving mindset which is to write a checkand forget about the problem with PaneraCares, we were trying to utilize somethingthat’s just as valuable as money: our time,skill, scale and experience. We were alsotrying to show that all of us are in thistogether, by enlisting communities in thisnotion of shared responsibility’(RonShaich, Panera Founder, Chairman andco-CEO)4

In 2012, Panera Cares cafés will servenearly 1 million meals. By the end of2012, there will be a total of five PaneraCares cafés across the USA. Each café isself-sustaining — generating just enough

donations to absorb operating costs. ThePanera Cares Café programme gives allcitizens of a community the opportunityto contribute. Whether contributions arein the form of currency, time or talent, theprogramme is a moving example of howretail can make an emotional and socialdifference, and inspire communities tocontribute and care.

GROWING BY STRENGTHENINGOTHERS

‘Retailing with a difference. Retailingwith a conscience. Retailing is not aboutmaximizing profits. Nor is it about seeinga fantastic opportunity and saying “hey wecan make big bucks there”. That is notretailing.

Retailing in the emergent world isabout growing the communities, engagingwith society and trying to maximize thepotential of the entire community. Weneed to use retail as the opportunity totest and grow local resources ...The devel-oped markets have not caught onto thisconcept yet...We (emergent markets)need to teach the rest of the world how todo retailing with a difference’ (SuzanneAckerman Berman/Pick n Pay, CorporateTransformation Director)5

Coca-Cola Retail Research Council(CCRRC)6 funded a study to learn howretailers in fast-growth markets managethrough transitional and often disruptiveconditions. During the field work, theteam learned that the best-in-class retail-ers who started businesses before thegrowth of the middle class, had a deepcommitment to serving the communitiesin which they operate. Given the historyof economic and social transitions withintheir highly dynamic markets,many of theretailers studied in the CCRRC researchbecame highly experienced in serving the

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underserved. Furthermore, because theseretailers have the additional role of educatingtheir customers about shopping withinorganised retailing, strategic clarity andconsistency was paramount. Retailers inthe CCRRC research recognised theirpotential to directly affect the lives oftheir customers because often they werethe only organised business their cus-tomers would deal with on a daily basis.

The level of retailer interaction is a factorof company strategy and openness to theparticular society in which they operate. So for example, they may extendcredit to consumers who would otherwisebe turned down by banks. They may operate in low-income areas, where therecan be continual disruption (eg power out-ages, product shortages, and security issues).

Pick n Pay, a family owned retailer thatoperates almost 900 company and fran-chise stores primarily in South Africa andsurrounding countries, has a history ofadvocating social change in a challengingenvironment (Figure 3).Working in a frag-mented retail market where they serve theunderserved as well as affluent consumers,Pick n Pay has operated with the goal toserve all. For example, the range of goods

for a higher-income community can beextensive, while at the lower tier muchmore limited. As the consumer in Sowetomay have access through their travels to thelarger, upscale stores broader ranges offoods and other goods than the consumertypically shops for. It is important thecustomer feels their store is a reflection ofthe chain as a whole. If financial optimisa-tion were the only objective, there might bea third fewer products on the shelf.

While constrained shoppers purchasevery few items each week, they are con-cerned about the environment and alsowant to see that foods are fresh and local.Pick n Pay offers their stores the ability tosource from local farms, even the smallestones that operate near settlements whereinformal trade exists side by side withmodern stores. This assures shoppers thattheir communities are part of the eco-nomic supply chain as well. Providingstore managers with flexibility to sourcelocally is an important capability, and inadvance of many of the US retailers.

Franchisees from these communitieshave proven to be an asset. It opensopportunity at the local level whenshoppers know they are doing business

Figure 3 Pick n Pay has a history of advocating social change in a challenging environment

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with someone they can trust. From thefranchisee perspective, they are helpingneighbours cope with daily realities andhardships. Franchisees are motivated toenrich their communities and trainothers. They are important role modelsfor continuing education. Furthermore,the workers they hire in turn are motivatedwhen they see the potential opportunity.

In developing markets, training andeducation are embedded into the culturesof the retailers. Therefore, converting acustomer is not simply about making asale. It is about fostering self-confidenceand supporting their drive and ambitionto succeed in society.

Stores are not just stores or places tobuy merchandise. Successful retailersoperate stores as centres of communitythat play an important role in educatingthe customer about how to function wellin a consumer society.

BUILDING FOR COMMUNITY FIRSTWhen retailers enter a new market, orretail developers construct a new retailcentre, they need to incorporate commu-nity needs into the actual planning anddesign of the structures and the environ-ment experience.All across the USA thereare far too many carcasses of dead malls,many of which are so generic in designthat they actually degrade the visual land-scape and local community culture.

Retail space that is thoughtfullydesigned and conscientiously built withthe community ecosystem in-mind canbecome an enduring source of local prideand fuel local economic growth.

Retailers must embrace the notion thatsocial responsibility on a local level means‘me’ becomes ‘we’. Consumers are nowvalued as people. A retailer’s interest intheir needs and support of their aspira-tions must endure far beyond a sale.

Yaromir Steiner is the visionary founderof the retail development company, Steinerand Associates.This company has develop-ments throughout the USA, such as TheGreene in Dayton and Bayshore inMillwaukee. What makes this privately-owned company and its retail programmesspecial, are its guiding principles of build-ing for community needs first and retailreal estate second. This translates into theuse of socially responsible civic planningprinciples such as walk-able sidewalks,public forums to promote gathering, andgreen spaces that serve the interests of allages (Figure 4). The retail centre designstrives to enhance and express local com-munity culture and aspirations, instead ofimposing only corporate and commercialinterests onto the community.

Yaromir believes that every developerhas the duty to build something that acommunity can be proud of, and that canwithstand the test of time.To this end, hedoes not build malls that look like coldand sterile enclosed boxes. Nor does hebuild power centres or lifestyle centres,sprawling big-box retailers, and parkinglots. Instead, he builds open-air,mixed-useproperties that incorporate not only retail,but dining and entertainment, hospitality,office and residential use. In other words,he sets the stage for building communitydynamics and growth.

Figure 4 The Greene in Dayton and Bayshore in Millwaukee

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Yaromir Steiner, along with TheGeorgetown Company, formed a partner-ship with Les Wexner, chairman and CEOof Limited Brands, to bring to life in 1999the Easton Town Center in Columbus,Ohio.Easton is an award-winning,mixed-use property, considered by many in theretail development industry as the goldstandard for retail design and experienceexcellence.7 At more than 153,000m2, itfeatures a who’s who of retail brands suchas Louis Vuitton, Tiffany’s, Henri Bendel,Nordstrom and American Girl. It is alsohome to many retailers that began locallysuch as Homage and Northstar Café. Ithas also served as the incubator for one-of-a-kind innovative retail concepts suchas Celebrate Local that sells only Ohio-produced handmade products from 200-plus local artisans and small localbusinesses (Figure 5). Celebrate Local waslaunched through a collaborative effortbetween the local non-profit for smallbusiness ECDI, the Global Gallery andthe Easton Community Foundation.

Easton has given this otherwise sprawl-ing suburban community of Columbus a

unifying sense of place. It has become abeacon not only for local residents, but forthe entire state of Ohio and beyond,drawing public interest through freesummer concerts, outdoor films andyearly traditions such as holiday paradesand tree-lighting ceremonies. Unlikemost private properties, community use ofall green and open space is encouraged.All work is done with local groups tooffer access and extend exposure toworthy causes and local talent.

Even before the opening of Easton, theEaston Community Foundation waslaunched, dedicated to organising philan-thropic efforts in support of local citizensand causes. In 2012, Easton once againreceived the ‘Benefactor of the Year’award8 for local community contributionsthat were comparable to those made bylocal Fortune 500 companies such asKPMG and ABBOTT. Giving back tocommunity is literally designed into theEaston experience, where proceeds fromtheir parking meters have gone directly tolocal charities since the 1999 opening ofEaston. Easton has become such a beloved

Figure 5 Celebrate Local sells only Ohio-produced handmade products

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retail brand (even though it is not a store)that its latest Net Promoter Score of 82.5per cent even surpassed the Apple store at78 per cent.

It is no wonder that while other mallsand mixed-used centres in Ohio strug-gled to survive during the recession,Easton was not only profitable, but grewto become the top producing retailcentre in Ohio, and one of the top threeproducing retail centres in the Midwestregion.

ENABLE LOCAL CULTURE ANDGROWTHA retailer’s social sense of purpose andresponsibility to a local communityshould go far beyond a branded cause orlocal philanthropic sponsorship pro-gramme.This involves a different philos-ophy and mindset altogether regardingthe role and purpose of retail within acommunity. It is a given that retail isessential to a community’s economic andsocial wellbeing. But too often retail isseen to impose itself on the landscape andcompromise the quality of life and local culture for the very people it hopes toserve.

One company studied as part of theCCRRC report was Minka CiudadComercial del Perú. Located in the portcity of Callao, Peru, Minka is unique inpurposely mixing organised and informaltrades into one location. It is a mall solu-tion aimed at bringing together these twodynamic markets (marketplace vendorsand formally trained merchants) so theycan effectively attract more customers.

Minka opened in 1999 and was intendedto be an experimental alternative to themore traditional central markets wherelower-income groups would normally shop.The name comes from the Quechua andAymara languages of Peru, referring to

cooperative work. Currently, Minka is acontained compound of 108,000m2, withfragmented trade. It averages 1.5 millionshoppers per month,although during seasonalevents the number of shoppers often jumpsto 1.8 million.

Minka provides a secure space, market-ing, business standards, and quality prod-uct for both its customers and retailers. Italso works with the government to high-light locally-produced products for sale. Inaddition, through a successful public–private partnership, Minka stewarded theexpansion of local mass transport for themerchants and customers. By investing inlocal infrastructure, Minka made safe,affordable mass transport possible for themillions of shoppers who live outside thecity in the more remote areas.

LEADER VERSUS PARTICIPANTIn the USA, there are widespread SR-related efforts at retail such as support for‘green’ and environmentally-friendlypractices. Especially during the holidays,cause marketing and charitable givingefforts seem to be omnipresent within thepoint-of-sale experience. All efforts topromote social good are commendable.However, if such programmes lose effec-tiveness because of a retailer’s inability toinspire support, then the commitment andshared value become insignificant.

It is only through actions, policies andstewardship of positive social change that aretail brand can create an emotional connec-tion and influence behaviour change farbeyond any marketed word or campaign.Asmore and more retailers adopt SR businesspractices,participation and marketed supportof causes will no longer be enough to provea retailer’s commitment to SR.Presence,par-ticipation and support of a cause seempassive and detached when compared withthe more bold and courageous efforts of


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retailers such as Panera,Patagonia and Marksand Spencer.

Promoting sustainability principles atretail is also a very challenging topic notonly to communicate, but also to enforceand live by. Promoting the purchase ofnew products and enticing shoppers tobuy more, more, more is in direct conflictwith the principles of reduce, recycle andreuse. If guided purely by logic and profit,a retailer would think twice before pro-claiming its support and belief in sustain-ability.The lack of a credible track recordmay only raise criticisms of hypocrisy and‘greenwashing’.

PatagoniaPatagonia’s Common Threads Initiative isa great example of retail bravery andintegrity. Patagonia leveraged a veryaggressive marketing campaign — but thistime it was to urge consumers to ‘not buy’their products, and instead curb theirunsustainable purchase habits (Figure 6).For those who are unfamiliar with thebrand, such a plea may seem disingenu-ous, or a deliberate act in the hope ofgenerating PR and buzz. However,Patagonia’s ethos and respect for the envi-ronment runs deep into the core of itsbusiness. Since day one, it has guided thecompany’s business strategy, productdevelopment/design and social responsi-bility commitments.

‘We design and sell things made to last andbe useful. But we ask our customers not tobuy from us what you don’t need or can’treally use. Everything we make — every-thing anyone makes — costs the planetmore than it gives back.’9

By pursuing a socially responsible approachto retail and consumer consumption,Patagonia has earned not only the trust andloyalty of its existing customers, but in

addition, has also attracted the interest ofnew customers to the brand.

Patagonia’s product is known to be ofthe highest quality. The excellence andintegrity of the manufacturing and life-time warranty allows the company tocharge premium prices. Patagonia’s com-mitment to quality and SR is evident inthe way it sources, designs and constructsits products. Such noteworthy detail helpsto justify the premium price that so manyconsumers are willing to pay — all of this despite its plea of ‘Don’t buy this jacket’.

Given Patagonia’s strong performanceyear after year of US$400m-plus in rev-enue, it is clear that its customers placegreat value in its attention and commit-ment to such SR details.

Patagonia has partnered with eBay forthe sell/re-sell of used Patagonia clothing.Through this approach, Patagonia is ableto extend its customer base via eBay as

Figure 6 Patagonia’s ‘Don’t Buy’ campaign

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people try to sell their used clothing/gear.The irony is that usually the sellers willturn right around and use the earnedmoney to purchase more (new) Patagoniagear. In more ways than one, such redistri-bution reinforces the principles of sustain-ability whether directly or indirectly.

Marks and SpencerMarks and Spencer (M&S) is anotherretailer whose bold commitment to theenvironment and SR business practicesinspires new possibilities for sustainabilityat retail. The company has been a strongvoice for combating climate change andwaste, while supporting sustainable rawmaterials, health and fair-tradepartnerships. Based in the UK, M&S madepublic its goal to be the world’s most sus-tainable retailer. Its Plan A corporate social

responsibility (CSR) programme waslaunched in 2007 with 100 commitmentsto achieve in five years. It was so effectivein its efforts that it increased itscommitments to 180 by 2015. What isrefreshing to see in their execution is thepersonality, wit and even humour put intothe company’s communication efforts.Thecampaign is clear:‘Plan A — we believe it’sthe only way to do business — becausethere is no Plan B’.

Last year, M&S introduced JoannaLumley, the iconic actress and televisionpersonality, as the ambassador for ‘M&SShwopping’ (Figure 7), an effort to raiseawareness about the impact of wastefulattitudes about clothes. The goal is toreduce the 1 billion items being dumpedinto UK landfills each year by encourag-ing shoppers to drop off their unwantedclothes at M&S for recycling or resale by


Figure 7 M&S ‘Shwopping’, an effort to raise awareness about the impact of wasteful attitudes about clothes

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Oxfam. M&S is introducing new ways toconnect unsustainable consumer habitswith positive behaviour change.

RETURN ON COMMUNITYA community should feel enriched andstrengthened by the local presence ofretail — not left to feel empty. Whenretailers establish themselves in new mar-kets, what role (if any) do they assumewithin their communities? Do they seethemselves as a citizen or corporation? Isthere even an interest in assimilatingthemselves into the existing community?

All too often, businesses fail to inte-grate themselves physically, emotionallyand socially into their local communities.This deliberate disconnect is evident inhow their physical presence vis-à-vis retaillocations, corporate headquarters and cor-porate campuses is structured anddesigned into a community. For most,they conform to pre-existing buildingstructures (whether retail or office), wheretheir corporate culture thrives and growsfrom within. For many businesses,whether in the form of office or retail,bigger is perceived as better, given thevisual presence and implied strength ofbusiness. But at the same time, when thereis a deliberate effort to stand out, it canalso be a reminder to local citizens that‘Yes, we are different and will remain sep-arate from the rest of you’.

It is usually cheaper and faster to buildnew stores or offices from the ground upthan it is to retrofit existing structures tomeet custom needs and current buildingcodes.This explains the continued build-up of remote corporate parks, isolatedcorporate campuses and retail centres.

Not only are such building practicesunsustainable. They also reinforce emo-tional disconnect between business/retailersand the local citizens.10 This philosophical

approach to business as a distant neighbourpromotes a ‘them versus us’ mentality, tran-sient community vibe and way of life. Inthis context, it is no wonder that retailersare often seen as the enemy of Main Streetand a threat to urban cities.They often faceopposition by communities and have a dif-ficult time building local relationships andcivic support.

But not all retailers and business leaderssubscribe to this philosophy. Tony Hsieh,CEO and founder of Zappos, beganZappos in 1999 as an online shoe retailer.Today it is the number one online retailerfor shoes with steadily growing marketshare in other clothing areas. Despite thebreadth of product, with over 1,000brands and 7,000 affiliate partners, Zapposconsiders itself a ‘service company thatalso happens to sell shoes, handbags etc’.11

In 2011,Tony Hsieh brought his leader-ship philosophy of ‘culture is everything’to new levels of business and urban reality.He committed US$350m towards therevitalisation of downtown Las Vegas, thehome of Zappos. His goal is to build ‘Themost community focused large city in theworld’ — and to do so within five years.This commitment to the revitalisation ofLas Vegas is called The Downtown Project.Although it is not a Zappos-led or fundedinitiative,Zappos plays a central role as cat-alyst for the revitalisation of the city andthe movement to build critical urban mass.

Loren Becker, who is in charge of theZappos Downtown Project, has beenwith the company since it moved from asuburban corporate park in California todowntown Las Vegas. Although he nowconsiders Las Vegas to be his home base,he remembers the years of weekend com-mutes between Vegas and California, andthe emotional disconnect he recognisedin himself at the time.

Becker likens the migration of acompany with over 2,000 employees to a

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pilgrimage: not only is the companymoving offices, but many of its employeesare also moving out of suburbia andadopting an urban way of life.

This relocation effort was born out ofthe need for the company to expand phys-ically due to its growth.What began severalyears ago as a plan for an isolated campus inthe middle of the desert has now evolvedinto an open campus design (Figure 8).

The Zappos corporate campus followsthe integration philosophy used by manyurban universities, such as NYU in NewYork City and University of Pennsylvaniain Philadelphia, whereby learning hap-pens throughout the city, and is not cen-tralised within proprietary buildings.Thisapproach allows for the pursuit of a unify-ing concept that Zappos refers to as ‘theUn-office’. This approach promotes thevalues of adaptability, acceleratedserendipity, enhanced mobility and aboveall, a community-oriented culture. Thereare ten ways in which Tony Hsieh plans tobuild the city of the future:12

(1) City centre HQ: Instead of moving to abusiness park, renovate iconic structuressuch as City Hall (Figure 9) for use ascorporate headquarters.

(2) Shipping container retail park: Shippingcontainers enable creation of new

space and immediate access. As theyare moveable, they can be reused andrepurposed throughout the life of theproject.

(3) Investing in locals to build better busi-nesses: Support local small businessand the entrepreneurial efforts ofthose who are passionately pursuingtheir dreams.This applies not only tolocal citizens, but also Zapposemployees.

(4) Reimagining the original architecture:Some things are just not what theyseem, eg the medical centre holds acoffee shop and artists’ community.As with local cultures, local architec-ture should be celebrated and protected.

(5) Creating events for locals: ‘First Friday’has been an event held at the start ofevery month in Las Vegas. Hsieh sawthat the locals needed a place to mixand connect, so he bought the rightsto the evening event and brought inhis own team to manage it. Now it isbooming, with traders, artists, food-carts and entertainment — even askateboard park and DJ set.

(6) Investing in start-ups that invest in thecity: Hsieh has a fund to encourageentrepreneurs to live and work in thecity. One of the clauses is that the


Figure 8 The Zappos ‘open campus’ design in Las Vegas

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business should be designed to hirelocals and take them on an upwardlymobile career. Start-ups such as Rumgrand Romotive gained their start in this way.

(7) Embedding the idea: Hsieh has rentedthe top four floors of serviced apart-ments in a building called the Ogdenand gives staff open access so they canhave a place to stay while they helprebuild the neighbourhood. He alsooffers them to people visiting town inhope that they will get to know hisplans better and help spread the word.

(8) Getting creatives to fall in love:Encourage like-minded people tocome and experience a new kind ofcommunity and way of life, relocateand build their local roots.

(9) Getting all the people involved: Open-sourced planning and integration ofideas are constantly incorporated.

(10)An education space for technology, enter-tainment and design: Create a spacewhere ideas can flourish and inspireaudiences both near and far.

BECOMING SOCIALLY RESPONSIBLERetail brands need more than marketingstrategies, media budgets and effectivecommunication/creative to ignite move-ments of positive social change. Thetransformation from activity and tacticsto belief and emotional commitmentbegins in the heart and transforms themind.The intensity of a brand’s commit-ment to a social cause can fuel newrealms of creative thinking and therebyreveal new opportunities for businessgrowth.

WPP collected perspectives regardingsocial responsibility from Fortune’s top 50World’s Most Admired Companies in2011.13 Here are some of the interviewhighlights shared in the report:

McDonald’s: ‘We want to tie our CSR activ-ities into our brand more. Our brand isn’tdefined today by the consumer as a brandthat connects and cares with society. Wehope that you’ll see some evolution in that.’

Target: ‘Our overarching reputation goal isto transform the admirers to advocates.’


Figure 9 Zappos has renovated iconic structures such as City Hall for use as corporate headquarters

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MORRISON AND HUMLEN

Dell: ‘I see sustainability almost the wayquality was three years ago. It was a processwhere you inspect quality at the end of theline but then this Deming guy came alongand said,“No, no, you build quality at everystep of your process.” No matter what youdo, you have a responsibility for quality.’

Microsoft: ‘Citizenship needs to be alignedwith corporate strategy. It must be com-municated with investors.’

The research also delved into understand-ing in greater detail the steps that weretaken by these corporations to helpimprove social and environmental issuesin the course of doing business.

Social responsibility was no longer seenas a compliance initiative or separatefunction of ‘doing good’ but rather, anemotional sense of purpose. It becamemore meaningful and thereby inspiringfor employees. As social responsibilitybecame recognised as core to the business,it became integrated into its every strat-egy, and required employees to integrateinto formal structures, processes andmeasures.

The study highlights the seven principlesof corporate stewardship that can makesocial responsibility actionable and enablecorporations to see new business advantagesand opportunities:

● See social responsibility through a business lens- The fundamental shift toward SR

concerns, among other things,emerging markets, new opportuni-ties, new ideas, new products, down-stream long-term benefits and theorganisation of the corporate struc-ture. It is also a habit of mind thatshould become reflexive.

● Make a difference from your position ofstrength- Simply put, figure out what you do

best, what you produce, ‘where you

play’ – and then fashion your SR initiatives in that domain.

● Winning with ‘thick value’- Simultaneously creating social good

and business good results in what istermed thick value, a by-product ben-eficial for all. New ideas and opportu-nities arise from such value creation.

● Walk then talk- Design and implement your programme

first. Get it right. If you want to blowyour own horn afterward, do so care-fully, for scepticism about motives hassharpened in the internet age.

● Every employee should live and breathe it first- Make a genuine commitment to

making a difference in the world.Communicate this to your employ-ees, motivate them to set furthergoals. This not only enhances thechance of success, it serves as a pow-erful recruitment and retention toolfor the best talent out there.

● Partner for real breakthroughs- Welcome competitors to work with

you. The goal is the creation of agreater social good, which in turnwill open new business opportunities.Think big, not territorially.

● Innovate permanently- SR is a journey, not a destination.

Business needs to be flexible and cre-ative — and tolerant of uncertainty. Itmay be unsettliing at first, but it canonly be invigorating in the long run.There is a brand new energy at workin the business world. It is time to tapinto it.

The companies interviewed indicatedthat change came when they stoppedtreating ‘doing good’ as a separate func-tion of their business, and instead inte-grated it into every part of business. Eachemployee needs to be responsible withthe structure, processes and measures.


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CONCLUSIONRetail is by definition a business entitydesigned to be profitable through sales ofgoods and services. However, when aretailer defines their social reason forbeing as profit first, social purpose second,there is a noticeable difference in aretailer’s actions, priorities and depth ofcommitment. Beyond price value or newinnovative offerings, a retail brand’s‘values’, and thereby their actions, can bethe most authentic and emotionallyengaging form of brand communication.

To compete for consumer preference,retail must give people more reasons toconnect emotionally to their business andbrand versus another. When retailers seethemselves not solely as a business entity,but as a locally engaged citizen,‘retail’ cannaturally evolve towards a role that gen-uinely transcends commercial interests. Byadopting a more humanised and socially-responsible way of building relationshipswith people and their communities,retailers can engender loyalty even duringthe most difficult economic times.

The examples shared in this paper areinspiring reminders of how potent humanwill can be in bringing a leader’s purpose-driven vision into a meaningful reality.Given the ever-growing examples of SRat retail, social responsibility may very wellprove to be the most powerful catalyst forinnovation, enduring brand loyalty andsustainable business success.

References and notes(1) Davies, S. (2008) ‘Think global, buy local’,

Project for Public Spaces, 1st November,available at: https://www.pps.org/reference/thinkglobalbuylocal/ (accessed May 22, 2013).

(2) Ford Motor Company (n.d.) ‘Message fromFord Motor Company Fund and Community

Services President Jim Vella’, available: at:http://corporate.ford.com/our-company/community/ford-fund/presidents-message-401p(accessed 25th April, 2013).

(3) See AllAboutBranding.com, available at:http://www.allaboutbranding.com/index.lasso?article=22 (accessed 22nd May, 2013).

(4) Kanani, R. (2012) ‘How restaurant visionaryRon Shaich is tackling America’s hunger crisis’,Forbes, 16th September, available at:http://www.forbes.com/sites/rahimkanani/2012/09/16/how-restaurant-visionary-ron-shaich-is-tackling-americas-hunger-crisis/ (accessed26th April, 2013).

(5) Ackerman, S. (2010) comments made duringthe ‘Retailing in Emergent Markets’ presentation/panel led by Gwen Morrison at National RetailFederation ‘Big Show’, New York, NY.

(6) CCRRC Latin American Council 2008/2009study, ‘Retailing in Emergent Markets’, led byThe Store, Kantar Retail and The FuturesCompany.

(7) Baker, M. (2011) ‘The fab five’, Inside Retailing,12th August, available at: http://www.insideretailing.com.au/IR/IRNews/The-Fab-Five-3501.aspx (accessed 26th April,2013).

(8) Kossler Dutton, M. (2012) ‘Corporate CaringAwards: Easton Town Centre LLC’, ColumbusBusiness First, 20th April, available at:http://www.bizjournals.com/columbus/print-edition/2012/04/20/cca-easton-town-center-llc.html?page=all (accessed 26thApril, 2013).

(9) Rosenblum, J. (no date) ‘How Patagonia makesmore by trying to make less’, available at:http://www.fastcoexist.com/1681023/how-patagonia-makes-more-money-by-trying-to-make-less (accessed 22nd May,2013).

(10) Felste,A. (2012) ‘Outside the big box’, FinancialTimes, 23rd August.

(11) Becker, L. (2012) Comment made during the‘Retailing with Purpose’ presentation/panel ledby Anneliza Humlen at the Sustainable BrandsConference, San Diego.

(12) Fawkes, P. (2012) ‘10 ways to plan the city ofthe future’, PSFK, 16th December, available at:http://www.psfk.com/2012/12/zappos-building-the-perfect-city.html (accessed 26th April,2013).

(13) WPP, Landor, Grey, Millward Brown Optimor(2011) ‘Dispatch from a new business horizon’,Hill & Knowlton, New York, NY.


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