Guest Blog by Gerrit McGowan

In an increasingly interconnected and cause-conscious world, retailers face growing pressure from their customers to do business in a socially-responsible way. And corporate social responsibility (CSR) is good for business, because it encourages customer goodwill and loyalty. These were two of the main themes discussed during the National Retail Federation’s Big Show, held last week in New York City. Thousands of exhibitors and hundreds of thousands of attendees from around the world gathered to network, discuss current trends and gain insights from industry leaders. In his keynote address, former United Nations Secretary General Kofi Annan pointed out that retail can play a big role in fostering economic growth in the developing world, which he characterized as “waiting for retail.”


Retail: A Potential Powerhouse for Economic Development

Retailers can do that, Annan said, by sourcing local materials and investing in their local partners. Not only that, lower-income consumers control trillions of dollars and make everyday purchases at large retailers – so they are not to be ignored. After all, the average GDP growth rate in China, India and most of Southeast Asia as well as Africa and parts of South America, has increased 4.8% over the past 10 years. And the best new markets for retailers include places we wouldn’t normally guess, such as Botswana, Mongolia and Azerbaijan. Furthermore, Edelman’s 2012 Goodpurpose study also found that consumers in these markets have high expectations of companies in terms of social causes. Several other presenters discussed CSR and loyalty – which, when combined, can ultimately help retailers deepen customer engagement.

CSR and the Loyalty Connection: Meaningful Causes = Greater Engagement

“Charity alone won’t save the world. It actually takes…business and capitalism to do that as well,” said The Container Store CEO Kip Tindell during a joint presentation with Whole Foods co-CEO Walter Robb and Starbucks CEO Howard Schultz. Businesses are thinking about a wider center of responsibility, Robb elaborated, saying that retailers should help their communities not because they have to, but because they want to. This entails supporting local programs, ensuring that sourcing practices are transparent and dealing fairly with supplier nations. Schultz went further, essentially saying that, in this always-connected age, consumers can quickly research companies’ business practices and base purchasing decisions according to what they find – i.e., they tend to give their loyalty to companies whose cause affinities align with their own.

When a customer develops an emotional connection with a brand, that customer is likely to share it – by recommending the brand – with family, friends and colleagues, not only in person, but also on social networks. They become, essentially, brand advocates. Together, technology and CSR are powerful tools that can generate deeper loyalty and engagement. For example, a retailer might use an online platform to make it easy for loyalty customers to give any unused rewards, such as miles and points, to causes that matter to them. When retailers follow their customers’ charitable lead, they forge more meaningful relationships with them, driving ROI and a loyalty bond that endures for the long haul.

Gerrit McGowan is CEO of KULA Causes


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