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Why retailers need to IT to monitor NGOs

Why retailers need to IT to monitor NGOs
Wednesday May 22 2013

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.

Thats 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 NGOs 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 Joes 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 Shells 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 its 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 worlds leading FMCG, retail, financial and B2B brands.

Tagged as: Activist | NGO | Sigwatch | Greenpeace | brnad | campaign | internet | social networking | Apple | Google | Amazon | e-commerce | Waitrose