Retail has always had winners and losers, but in the race for more customers, has ethics been comprised for far too long? There’s an elephant in the boardroom, and it’s the true cost of production, be it in food, drink or clothing.
Reflect on the business culture you operate in – that disposable, single-use, cheapest product you deliver has come at a price. We’ve allegedly taken into account EVERY resource required to produce our products. We’ve all assessed the impact we’re making on people and the planet right down the line, right? Of course, we’d all like to say yes, but have we really taken into account the true cost of production? Have we recognised the accounting scandals, the blatant use of one meat labelled as another, food contamination, disregard of workers’ rights, unfair pay, tax avoidance, non-disclosure agreements, fraudulent trading, depression, employee sick days and the tragedy of farmer suicides?
Cost of Production should be a clear and accurate reflection of EVERYTHING it took to create our goods (a ‘holistic audit’ if you like). But let’s be honest – we’re at a fork in the road. We could opt for the well-trodden path to short-term profit and keep our fingers crossed we’re not the stars of the next shockumentary. Or maybe we could take the road less travelled – the road which offers a little less financial reward, but which we can march down with heads held high and consciences clear, knowing we’re producing good, not just goods.
Currently, we’d be outnumbered for sure. There’s no congestion on the road to Not-Just-For-Profit, but the slumbering giant of a social revolution has been woken by the heavy tread of the short-term profit seekers.
The actual cost of supplying retail has never truly been taken into account. But it will be. Maybe not today. Maybe not tomorrow. But soon, and for the rest of your company’s shelf life. The new benchmark or seal of approval will be a supplier who is ethical in real terms and real-time – no marketing mirrors or empty promises. The people, real people, are banging their drum for change and its getting louder.
We’ve listened to the industry talk about ABC1 consumers for decades, but this faceless quantification is on its last legs. It’s people, not numbers, we sell to, and it is time to stop treating these people as objects. As shocking as the institutionalised objectification of women in the entertainment industry, the reduction of people to ‘consumers’ will ultimately see our industry rightly chastised at the hands of another #metoo uprising. If we tolerate or ignore unethical practices, #youtoo will be found guilty.
Armed with KPI’s and the need to meet targets, and driven by incentive schemes, our buyers arrive with the goal of achieving results ever better than their predecessors. Ultimately contracts are price driven, fuelled by the demands of shareholder dividends. But this relentless extraction of value is unsustainable, and at some point, somehow, the debt will have to be repaid with interest.
It doesn’t seem to matter if you have the highest service levels, the lowest number of quality issues, and deliver on a measurable set of ethical values. Putting people and planet before profit comes at a price, but who’s willing to pay and make a statement? The commitment to meeting the true cost of production is not a consideration when choosing a supplier, but should it?
Ethicality cannot remain an undervalued currency. We can’t pass blame in the supply chain – each and every one of us has to accept responsibility for the integrity of our link.
The truth is, David and Goliath relationships will always exist. But genuinely ethical David’s with the transparency and right values of purpose will win the custom of all the people who share their values. The time to hide is over – complex business structures with marketing smoke and mirrors are doomed, corporate camouflage has stopped working.