Profit news from two major supermarkets today clearly demonstrates shoppers are currently prioritising a reputation for low-cost over one for genuine social responsibility.
Waitrose has a good reputation, based in part on its employee-owned status, meaning career development and other “best practice” business approaches seem to be a genuine aspect of the company.
In contrast, Morrison is perhaps viewed as a functional, low-cost brand – although its advertising strategy featuring popular celebrities (such as Top Gear’s Richard “Hamster” Hammond, reputedly paid £750k for 4 days’ work) promotes quality as well as low prices.
Advertising alone cannot account for the difference between the results as Waitrose has reportedly spent £30 million on promotional activity this year.
Both Waitrose and Morrison promote a commitment to British food producers and CSR initiatives. So, it is perhaps harder for Waitrose to rely on its “good guy” reputation – when perceptions are that it is more expensive.
This is a shame, as Waitrose has an interesting new CSR concept, Community Matters, which appears to be a genuine, customer-oriented idea offering opportunities for local publicity and engagement with causes that need financial help during these tougher times.
The initiative involves Waitrose stores dividing a £1,000 donation between three local causes each month. Customers are able to nominate suitable organisations, with the employees’ forum (PartnerVoice) deciding which to support. Each branch has a Community Matters Champion, whose role is to research potential beneficiaries.
The really neat part in terms of stakeholder engagement is that every time you shop at the store, you are given a token which you insert into a perspex box on the way out for your preferred of the three causes. The “voting” is then used to apportion the £1,000.
From a public relations perspective, the idea not only engages the local community on various levels, but it generates on-going opportunities for media coverage. Different organisations are able to announce their selection and the resulting donation. They are also likely to encourage their own stakeholders to shop in Waitrose.
Of course, the concept has echoes of Tesco’s Computers for Schools cause related marketing initiative, but Waitrose isn’t focusing on the amount your spend, as a token is given each time you shop not on the basis of the size of your bill.
I like to shop at Morrison and Waitrose as both offer good fresh food – although Waitrose in Salisbury has the added attraction (or money trap) of John Lewis goods, and a really convenient in-store post-office branch.
I find that Waitrose isn’t really more expensive in terms of actual products – it’s just that there are so many more temptations that find their way into the shopping trolley.
I admire the Waitrose partnership structure and its commitment to CSR, but do these really influence my buying decision? Yes and no; because I am equally happy to shop at Morrison.
However, I am influenced against using Tesco (which I find to be an aggressive retailer seeking to dominate our shopping habits), Asda (I don’t like the Wallmart connection) or Sainsbury (which is neither convenient nor very interesting to me).
It is hard to prove the value of a good reputation, particularly one based on socially responsible values, which other organisations can seek to match. We may be drawn to the best organisations, but ultimately, price is a key influencer.
Where the real value of a good reputation comes into force though is when another brand has negative connotations which stakeholders seek to avoid, or when price and other decision factors are equal, meaning the positive good name is an added bonus.
It will be tempting in the current economic climate for organisations to cut back on CSR and focus on the bottom line. This is a justifiable strategy on the basis of the power of price to drive decision making. However, that good name will be vital if, or when, organisations face problems, which may well be a consequence of cutting corners as well as prices.
Although it is difficult to necessarily justify the “nice to” investment in CSR, I truly believe that those organisations that do not forsake local communities during economic difficulties will be the most successful in the long term.
After all, if you’ve a reputation for being good now, it will be much more costly to win that back when the good times return.