Why retailers need to IT to monitor NGOs
The rise of activist organisations, in concert with the power of the internet and social networks, is forcing retailers to monitor their brands ever more closely according to expert Robert Blood
Greenpeace once claimed that when it started targeting brands in their campaigns, it was like discovering gun powder.
That’s according to Robert Blood, who is the founder and managing
director of Sigwatch, which tracks and analyses activist campaigns to compile
databases that companies can use to track the reputational impact of, and the
affect of related issues on, their brand.
He explained: “What Greenpeace meant is that the rise of global superbrands
has created trans-national pressure points for activists, not only because NGOs
[non-governmental organisations] have a greater potential to threaten brands that
trade on their reputation (so they get the attention of brand management), but
because NGO campaigns are able to ride in the slipstream of the brands’ vast advertising and sponsorship budgets.”
Retail brands attract more
attention
Blood said this is
particularly the case of brands that get a lot of media attention, such as
Apple or Google. “In effect, the more a brand
is talked about, the greater exposure the campaign criticising it also gets,
for little extra effort on the part of the NGO,”he continued. “This is a major reason why
NGOs like Greenpeace target superbrands, which may have only passing
association with a particular alleged wrong, rather than less well known brands
or B2B [business-to-business] companies which are much more implicated [in a
given issue].”
He said retailers, and
especially supermarkets, have become similarly exposed once they seriously
started competing head to head with fast moving consumer goods (FMCG) manufacturers
and developing their own brand positioning. “Like
the FMCG brands, NGOs recognise that the retailers’ investments in their brands make them ripe for naming and
shaming campaigns,” he declared.
Consumers become the
gatekeepers
“E-retailers
are even more exposed thanks to their multi-market brands, since criticism in
one country can quickly cross-infect to other markets, as happened with Amazon
in January this year when its German fulfilment operation was revealed to be
using a security company allegedly linked to neo-Nazis,” continued Blood.
In
fact the expert warned that all retailers, both bricks and mortar and internet-based,
will always be more exposed to NGO campaigns than product brands because they
will be held to account not only for their own performance – ranging from
oppressing suppliers and squeezing out small traders, to infringing consumer
privacy with radio frequency identification technology and CCTV, exploiting
customer data, or failing to be sufficiently proactive on child protection and
health – but also for the products they sell. “NGOs try to use retailers as
consumer gatekeepers,” he added.
“When
activists want to kill or reform a product or manufacturer, the first place
they will seek to apply pressure is a prominent retailer, in the hope that by
forcing a destocking, it will trigger a de facto commercial boycott from other
sellers or at least force a change of heart from the supplier,” Blood said. “Moreover,
getting a retailer to block a product or change a sourcing policy is a quick
way to increase awareness of an NGO’s
campaign.”
Blood also said retailers that
like to emphasise their superior social responsibility or serve an upmarket
customer segment are supremely vulnerable in such situations. “In the US, Trader Joe’s
and Whole Foods are targeted by NGOs almost as a matter of course for this
reason,” he continued. “In the UK, it took just two weeks for Waitrose to renounce a
deal to put mini supermarkets in Shell filling stations, when Greenpeace
threatened a shaming campaign against the retailer over Shell’s Arctic drilling ambitions.”
Online-only offers no refuge
Meanwhile,
he also advised e-retailers on the need to recognise that they are
transitioning from being loved for their convenience and low prices to being
feared for their market dominance and alleged destruction of town centres. “Increasingly
vocal hostility from bricks-and-mortar retailers and the visible struggles of
established chains is undermining the reputation of the sector,” he said. “NGOs
will seek to exploit the crisis for their own campaigns. Environmental groups
will be picking through e-retailers’ sourcing, carbon footprints and packaging
waste, and human and labour rights groups will be scrutinising their offshore employment
practices.”
Indeed, Blood pointed to the
fact that they have already started by pointing out the ‘unfair’ tax advantages of
pan-European online retailers like Amazon incorporating in Luxembourg rather
than where they do most of their trade. “This
is just the beginning,” he warned. “Amazon especially risks becoming the Tesco of e-retailing – unfashionable and despised by the ‘chatterati’ simply because it’s perceived to be all-powerful.”
Technology tracking offers
insight
Blood
therefore said it is vital for e-retailers to track campaign groups and
emerging issues, so they can anticipate potential reputational pressures and if
possible, deflect unwarranted brand-damaging attacks, “for example, by
negotiating with the NGOs, or by announcing pre-emptive policy changes that
neutralise criticisms”. “There is also a revenue-building here: by seeing
what’s barrelling along the line towards the big exposed players, you can take
early avoiding action or perhaps make a virtue of doing things differently and
gain new customers,” he concluded.
Sigwatch clients include several of the world’s leading FMCG, retail, financial and B2B brands.