Generous Brands 2.0: Retail’s ongoing journey towards the greater good

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2.0 BRANDS GENEROUS

Transcript of Generous Brands 2.0: Retail’s ongoing journey towards the greater good

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2.0BRANDS GENEROUS

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Please join the conversation

#irdc2015 #generousbrands @FITCHdesign @cdaviesFITCH

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FORESIGHT#1

Generous BrandsIn a world where consumers are becoming increasingly aware of‘mean’ brands FITCH has begun researching the concept of generosity.Generous brands are the ones who show more of a heartbeat, take thefirst step and display a genuine understanding of their customer needs.

This is a long way from 2 for 1 deals and bonus points, but rather a tone ofvoice and general personality and encourages consumers to warm to their offer.

TM

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WE’VE GOT A LOT TO GET THROUGHAnd it’s a heavy topic…

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Our Agenda…

1: How do we define Generosity? 2: Why is it important? 3: What factors are shaping it today? 4: Who are the Generous Brands? 5: Where is Retail Generosity?

6: Leave, have a think, start making a difference…

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How do we define Generosity? 1

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The habit of giving without expecting anything in return.

Farukh

GENEROSITY:

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Offering time, assets or talents to aid someone in need. Often equated with charity as a virtue, generosity is widely accepted in society as a desirable trait.

Wonderlane

GENEROSITY:

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Reconciling this generosity with the daily demands of commerce

Jeremy Schultz

THE CHALLENGE?

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Why is Generosity so important today? 2

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OR, PUT ANOTHER WAY…Why should retail care?

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BECAUSE TODAY’S SHOPPER CARESGenerations X, Y and Z share an overwhelming belief that all of us need to work together to change our world.

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Nau

AND THEY ARE VOTING WITH THEIR $Customers are forming deep and resonant emotional bonds with brands and businesses that align with those beliefs and rewarding them with loyalty

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WHY X,Y AND Z?Because in less than 5 years they will essentially represent the global audience for retailers and brands

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LET’S START WITH GEN XThis group was not born into a climate of broad social responsibility, but their attitudes and values were shaped by a series of world changing events

Zoriah

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THESE WORLD EVENTSLed to the development an emerging belief in integrity, authenticity and action, particularly as it relates to business and government

TheGuardian

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TRAITS THAT INFLUENCEDX-ers behaviors as parents and laid the groundwork for their influence on the Generations to come…

Me

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Me

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GENERATION X TODAYAre focusing their energies and wallets on undoing the mistakes of the generations that came before them

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GOOD NEWS FOR GENEROUS BRANDSAs this group are also entering the peak earnings decade of their careers and are ready to reward companies that align with their beliefs

Volvo

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GENERATION YAren’t the kids in your store anymore, and are in fact more likely to be shopping for their kids.

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47% of Millennials are parents, 49% live as a couple, 52% are homeownersALL GROW’D UP…

Source: Yankelovich Monitor, 2014

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They are getting used to a lot more responsibility. And with more responsibility comes an (even) more responsible outlook.

ONE THING IS FOR SURE

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78% would recommend a company seen as a good citizen, 74% would be proud to be associated with it, 71% would be loyal to such a business

Source: MSL Future of Business Citizenship Report, 2014

SLACKTIVISTS NO MORE

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GenZ is the most socially responsible generation in history

Glenn Brown

BUT THE BEST IS YET TO COME

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WITH A CRAP TON OF OOMPH“By 2020 today’s 14-19 year olds (GenZ) will be the largest group of consumers worldwide, making up 40% of shoppers in the US, Europe and the BRIC countries” Source: FITCH Gen Z report

LauraSmith

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AND A CONSCIENCE TO BOOT“Research points to the emergence of a stellar generation: educated, industrious, collaborative and eager to build a better planet”

Source: Maclean’s: Get ready for GenZ

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“Their role models are young, everyday characters like The Hunger Games’ Katniss Everdeen, who face seemingly inescapable scenarios but rise above them to create a better society - just like Zs, who feel a responsibility to change the status quo.”Source: Forbes, GenZ Rebels with a Cause

“60% of Zs want jobs that have a social impact and 26% already volunteer.”Source: Meet GenZ: Forget everything you know about Millenials

TheRealMStyles

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THE IMPACT OF THESE GROUPSWill signify a profound shift in shoppers’ expectations around how businesses need to act relative to the challenges our world is facing.

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AND WE’VE GOT A LONG WAY TO GO

89: Percentage of individuals globally who believe business should

equally weight commercial and societal needs

29: Percentage of individuals globally who believe business is actually

doing that today Source: 2012 Edelman Good Purpose Study

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What factors are shaping the new Generosity? 3

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WHAT CAN WE LEARN?From X, Y and Z

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3.I JUST “GIVING” WON’T CUT ITAlmost every business gives money to charity. And while on paper that’s great, being generous means taking this altruism and activating it.

TimGreen

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NEXT GEN STATS ON GIVINGThe new generation of shoppers has had a front row seat on the ineffectiveness of government to tackle issues head on.

The key is using your particular SKILLS, EXPERTISE, PEOPLE and RESOURCES to tackle problems that businesses can solve - even when others can’t.

They now see businesses as a far more effective vehicle for change, and they expect them to step up.

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It’s more important for Generous Brands to focus on close-in issues, rather than making generic and lofty goals that can never be achieved.

3.II YOU CAN’T BOIL THE OCEAN

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NEXT GEN STATS ON OVERREACHINGWe now live in a world where the problems we face are having a direct impact on our lives everyday.

From water shortages to superstorms. From cyber crime to huge income gaps. From immigration issues to education. From an aging population to everyday health.

We need to stop trying to “End World (insert worthy cause)” and recognize much needs to be done closer to all of our homes.

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ALSO, BEING VAGUE DOESN’T WORKPepsi’s refresh project raised $20MM but was “canned” in less than 2 years as no-one - most of all Pepsi’s board - could articulate what the point was

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3.III ACTION TRUMPS PURPOSEFor these new generations of shoppers WHAT you do is far more important and meaningful than WHY you do it…

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NEXT GEN STATS ON PURPOSEWhile having a mission is important to corporate culture it is trumped by action.

“We gave $150 million in donations a year but we didn’t really DO anything. We let somebody else pick up the food and it just disappeared. We didn’t use our skills and our people. We didn’t make a difference in ways that we could” Ron Shaich, Founder and Executive Chairman, Panera Bread

Good citizenship today means being a game changer.

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PANERA CARES

Panera

A Panera where you can eat a meal for literally cents if that is all you can afford - a brand using its people, places and products to make a difference

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3.IV FOCUS ON WHAT MATTERSWhile purpose shouldn’t trump action, no brand will be seen as Generous if it doesn’t address issues that are meaningful to shoppers.

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SO, WHAT’S ON THEIR MIND?It’s not possible to have a conversation about how business needs to change to align with the next generation of shoppers without discussing the environment.

The top 5 as it turns out.

When teens were recently polled globally on their top 10 concerns, 5 of them related to the environment.

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NEXT GEN STATS ON ENVIRONMENTIt’s not enough to just take corrective action. Simply cleaning up your past mistakes does not make you a Generous Brand.

And yet in many ways, the environment is an area where retail feels most out of step.

Generous brands have to go further. Investing their MONEY, their TIME, their EFFORT to changing our future, and not expecting the customer to pick up one cent of the cost.

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THE CONVERSATION HAS STALLEDRemember just a few years back when every conference like this focused on sustainability, green and LEED?

Walmart

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Q: HOW MANY SESSIONS IN 2015?One. Across every major retail design conference in the US and Europe.

Walmart

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Q: REMEMBER THE SESSION NAME?I’ll give you a clue. You’re sitting in it. And yet it’s not like the problem went away…a quick reminder

Walmart

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BUILDINGS (WHICH INCLUDE STORES)Are the largest contributors of carbon emissions on planet earth

La Citta Vitta

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AND RETAIL IS A HUGE PART OF THISThe US has more retail sq ft per person than any nation on earth. 6 times more than the largest per person ratio in Europe

Chris Ford

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28,000, 42 GALLON BARRELS OF OILThe amount we consume in the United States EVERY 2 MINUTES heating and cooling these spaces

Chris Jordan

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IT’S TIME FOR RETAIL TO STEP UPBut again it has to be more than just cleaning up our mess. A true Generous Brand would go further…

Nicholas Eckhart

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Who are the Generous Brands? 4

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Jason

MANUFACTURERS HAVE GOT THE IDEAFrom large to small initiatives they are forging true emotional bonds with the next generation of customers

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Raising awareness and building momentum

Unilever

UNILEVER’S PROJECT SUNLIGHT

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To a new generation of leaders

Unilever

AND GIVING A VOICE

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And profound, it has already made staggering gains and Unilever now tops every chart for sustainability and responsible business practices by a mile

Unilever

PROJECT SUNLIGHT IS VAST IN SCOPE

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SMALL ACTIONS, BIG DIFFERENCE“Achieving goals is not just a job for politicians and governments – everyone needs to play their part” Paul Polman, CEO, Unilever

Unilever

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Always

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Cannes Lion

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Went to a car company, not for a car, or an electric engine or a commitment to sustainability

Volvo

2015 DESIGN GRAND PRIX

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Volvo

BUT FOR A PAINTDesigned to save the lives of cyclists…invariably injured or killed by cars

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AND YET, DESPITE ALL THE EVIDENCE…most retail is either late to the Generous party, left early, had something better to do or is acting like it lost its invite.

Jason Hargrove

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BUT DON’T LOSE HOPEThere are a few glimmers that retail brands that are beginning to step up

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AND AT LEAST ONE…Who isn’t just a glimmer, but is instead an incredibly bright spark…

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Who is leading the way for retail? 5

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SOME NAMES KEEP COMING UPBut is BOGO the right model for change? Is it for everyone? And is it making a difference?

Tonya Staab

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SO, WHO IS THE BRIGHT SPARK?The grand old dame of British retail, Marks & Spencer

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A QUICK DISCLAIMERI don’t work for Marks & Spencer, I don’t know anyone who works there and they are not currently a FITCH client.

Although I did buy a sweater from them a few years ago.

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FOR THOSE THAT DON’T KNOW THEMFounded in 1884, headquartered in London, $15 billion in annual revenues 1,100 stores across a variety of formats

Marks & Spencer

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PLAN AIn 2007 Marks & Spencer launched Plan A - a 100 point, 5 year plan to create a greener, more ethical business

Marks & Spencer

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Marks & Spencer

HOW ARE THEY DOING?By 2012, 94 of the 100 initiatives had been achieved. In 2013 added 80 new initiatives and committed to achieving them by 2020

Marks & Spencer Plan A

Marks & Spencer

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WHAT IS THEIR FOCUS?

Marks & Spencer Plan A

Plan A has an incredibly broad remit but there are several key areas where they focus their efforts.

Marks & Spencer

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PLAN ASocial Responsibility Focus on local communities Environmental Issues Sustainable Business Practices Ethical Sourcing of products Customers’ health and wellbeing

AGAIN, IT’S NOT JUST GIVINGthe M&S example is something different

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GENEROUS RETAILM&S specifically utilizes it’s power as a retail network of employees, stores and customers to make a difference

Marks & Spencer

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I’M GOING TO COVER 5 AREASCharities (McMillan, Marine Conservation Fund, Unicef) Schwopping Marks & Start Spark Something Good Plan A and the environment

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MACMILLAN CANCER SUPPORTAs headline sponsor for the World’s Biggest Coffee morning, M&S donate all proceeds from their cafes and sales of a limited edition line of homeware

Marks & Spencer

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M&S Plan A Report

This annual one day event has raised over $6million dollars for Macmillan in the past 4 years

Marks & Spencer

MACMILLAN CANCER SUPPORT

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MARINE CONSERVATION FUNDThe Annual Big Beach Clean Up sees M&S customers and employees teaming up to clean over 90 beaches in the UK on a single day

hM&S Plan A Report

Marks & Spencer

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MARINE CONSERVATION FUNDIn 2015 they expanded the scheme to partner with the Canal and River Trust to add clean ups at an additional 45 inland waterways

M&S Plan A Report

Marks & Spencer

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UNICEFMarks & Spencer partnered with Children’s Charity Unicef to raise funds by recycling the hangers they use in their stores

M&S Plan A Report

Unicef

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FOR EVERY BOX OF HANGERSCustomers choose to recycle at the cash register, M&S donates 57p to Unicef, which doesn’t sound a lot, until you realize what it lets Unicef provide

M&S Plan A Report

Marks & Spencer

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1 BOX OF HANGERSProvides a child with clean drinking water for a fortnight, 3 boxes can feed a malnourished child for a year and 25 can provide a month of school classes

M&S Plan A Report

Unicef

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IN THE FIRST YEAR OF THE PROGRAMM&S customers gave back 100 million hangers, generating over $500,000 in funding for Unicef

Marks & Spencer

M&S Plan A Report

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IN THE SECOND YEARCustomers gave back 160 million hangers adding another $1,000,000 to Unicef ’s coffers and allowing them to restart their operation in Bangladesh

Unicef

M&S Plan A Report

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A GENEROUS RETAILERLeveraging their people, their stores and the simple act of shopping to help their customers make a difference in the world

Marks & Spencer

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SHWOPPING1 billion items of clothing end up in UK landfills annually - 16 items, per person, per year. M&S believes old clothes shouldn’t be thrown out, they should have a future

The Drum

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A PARTNERSHIP WITH OXFAMClothes dropped off at M&S are passed on to Oxfam where they are either sold, redistributed to countries in need, or recycled. None end up in landfills.

Oxfam

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AN INCREDIBLE STARTin the first 2 years 7.8 million items donated, $9 million raised for Oxfam

Howard Lake

M&S Plan A Report

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AGAIN, NOT JUST A DONATIONA retail brand leveraging the power of its network of customers, employees and stores for the greater good

Oxfam

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MARKS & STARTIn some ways the most profound of the Plan A initiatives

Martin Godwin

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A WORK PLACEMENT PROGRAM…that focuses on those who face barriers when trying to find work…single mothers, those with disabilities or health problems and the homeless

Marks & Spencer

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MARKS & STARTA decade long program, offering anyone the chance to join this landmark retailer and giving them the training and support to make it happen

Marks & Spencer

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MARKS & START VIDEO

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THEIR MOST RECENT INITIATIVELaunched last month in London is called Spark Something Good

Marks & Spencer

M&S Plan A Report

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HOW THEY DESCRIBE IT“We launched Spark Something Good as a way for us all - our people, our stores and customers to get out there and make a difference…”

Marks & Spencer

M&S Plan A Report

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THE PLAN24 Cities, 24 charities per city, 24 hours of service. What can we achieve in each city in a single, incredible day.

Marks & Spencer

M&S Plan A Report

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A DAY OF ACTIONWhere we don’t try and boil the ocean, we make a difference in ways that are tangible, immediate and close to home.

Marks & Spencer

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IN TERMS OF THE ENVIRONMENTMarks & Spencer is #1 retailer in the 2015 Global Sustainability Rankings and the #2 business of any kind (Unilever is #1)

Marks & Spencer

GlobeScan/SustainAbility Survey

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Marks & Spencer

HOW DID THEY GET THERE?By 2012 M&S hadn't just reduced their carbon footprint, they became carbon neutral. Every facility they operate is powered via sustainable energy credits.

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Marks & Spencer

5 YEARS LATER?…they remain the only major retailer in the world to achieve carbon neutrality.

GlobeScan/SustainAbility Survey

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MARKS & SPENCERRepresents the ultimate model of a Generous Retail Brand and offers a roadmap for the way forward

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SO YOU MIGHT BE THINKING, GREAT!Look at M&S, what a generous industry we are…alas there is still much work to be done…if you don’t believe me, consider the tale of Rana Plaza…

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AND AS WE THINK ON THAT TALElet’s remind ourselves of the tenets of generosity that we began with…and see how retail’s actions measured up

Weronika

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The habit of giving without expecting anything in return.

Farukh

GENEROSITY:

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Offering time, assets or talents to aid someone in need. Remember this idea, as we remember this tale…

Wonderlane

GENEROSITY:

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On April 23rd, 2013 at the Rana Plaza in Bangladesh, local media sources reported that cracks had appeared in the

building’s structure

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This was a building designed for retail and office use, but which had been converted into a series of garment factories

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Heavy industrial equipment had been brought into a building never designed for the structural loads and four upper floors had

been added without a permit

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Much of this clothing manufactured in this building was for western fashion retail brands, 28 of them as it turns out

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A local building inspector visited the site and ordered it evacuated. In fact, when he saw the cracks, he literally ran from the building

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The building’s owner declared the building safe, and the factories ordered their garment workers back inside

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Due to practically non-existent workers rights they complied, after managers threatened to withhold a month’s pay from those that

would not return to work the next day

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At 8:27 the next morning there was a power cut. The banks of diesel powered generators on the roof kicked in causing

intense vibrations.

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3,122 people were in the building at this time.

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The building collapsed. 1219 people died, most of them almost instantaneously

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More than 50% of the victims were women. Along with their children who were in the “nursery” on the lower level.

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The building’s collapse is considered the deadliest garment factory accident in history as well as the deadliest accidental

structural failure in modern times

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Of the 28 western fashion retailers identified as having goods produced in this building, only 9 attended the

initial meeting to discuss compensation to the families of the victims

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Of those 9 companies only 4 agreed to pay compensation

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It took two years in the courts to finally get the compensation paid

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And despite the companies concerned making a collected annual profit of over $20billion in 2014, the compensation

fund topped out at $30million.

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Or $6,000 for each family who could prove they had a claim

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Huffington Post

To do the right thing, to make a difference, to show the world that there was another way. But at Rana Plaza, we failed.

RETAIL HAD A CHANCE

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THERE WAS ONE RESPONSE…Fashion Revolution Day, an Instagram campaign encouraging people to wear their clothes inside out to raise awareness as to where the clothes came from

Stellamccartney

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Had it’s heart in the right place…but did the garment workers, making $72 a month in Bangladesh feel the effects? How about #actiontrumpspurpose?

Amylearns

#WHOMADEMYCLOTHES…

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THERE ARE SIGNSThat retail is waking up to the challenge

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EMPLOYEES AS VOLUNTEERSLike Timberland’s long standing and pioneering Path of Service program celebrating its 23rd year offering all staff up to 40 annual paid service hours

Timberland

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A CULTURE OF CARING80% of Timberland’s staff participate, which is a staggering number in terms of employee volunteer programs

Timberland

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LEADING BY EXAMPLEThe program recently celebrated its millionth hour of paid community service across the globe, and is an inspiration for others to follow

Timberland

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STORES AS STAGESBrands like LUSH have long realized their stores and their employees can act as powerful vehicles for raising awareness

Lush

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ATTENTION GRABBING STAGESIn one of their more infamous stunts they got their entire employee base to work naked for a day in 2007 to raise awareness on unnecessary packaging

Lush

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AND SOMETIMES SHOCKINGLike this protest against shark fin harvesting

Lush

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IN TERMS OF THE ENVIRONMENTWalgreens Net Zero Energy is hard to beat. A store which makes more energy than it consumes

Walgreens

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IKEA

AND THE SWEDESIKEA has always been known as a generous brand

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IKEA

FROM COMMUNITY IMPROVEMENTSTo employee housing, from actively improving the sites they develop, to water taxis in Brooklyn

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JUST LAST MONTHThey announced they would be the first major retailer in the UK to adopt the new “living wage” levels across all their stores, paving the way for greater good

IKEA

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THEN THERE’S LUXOTTICA Luxottica launched the Gift of Sight program 27 years ago to provide access to vision care in underprivileged communities around the world

OneSight

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TODAY Luxottica selects 1,000 volunteers every year to offer their skills and expertise at OneSight clinics across the globe,

Luxottica

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GIFT OF SIGHT IS NOW ONESIGHT A global, sustainable, non-profit organization that has changed the lives of over 9MM people in 40 countries, built from the actions of one retail brand…

Luxottica

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WATCH ALL THEIR VIDEOS Like their amazing Gambia film on YouTube…but for today, something a little closer to home…

OneSight

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ONESIGHT VIDEO OYLER SCHOOL

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BUT PERHAPS THE BEST EXAMPLE?CVS reported 2.4 billion dollar decision to remove tobacco products from their shelves. A gift of generosity for generations to come.

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Can all this generosity actually make financial sense?

Jeremy Schultz

BACK TO OUR ORIGINAL CHALLENGE

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Despite $2.4mm going up in smoke, CVS entered the Fortune 500 Top 10 for the first time this year. The only other traditional retailer on the list is WalMart.

YOU BETCHA…

CVS

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And it just released record earnings for the second Quarter, thanks in part to a 5 point plan specifically designed to offset the losses from tobacco revenues

YOU BETCHA…

CVS

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PANERA CARES

Panera

60% pay full price, 20% pay nothing, 20% pay more. Cares runs at 80% of the performance of a regular Panera, proof that we can make this work

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AND DESPITE A DECADE OF GRIPING…from shareholders M&S was finally able to announce this year that it saves more money from Plan A than it spends on it.

Marks & Spencer

M&S Plan A Report

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THE CASE IS CLEARRetail, one of the biggest industries on planet earth can make an almost unfathomable difference to our world…if only we start acting with generosity…

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It’s not that we are doing nothing

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It’s just that we could be doing so much more…

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OURS IS ONE FANTASTIC INDUSTRYBringing joy to people on a daily basis. Let’s spread this joy and do the right thing…we really don’t have any choice, to quote a hero of mine…

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Forbes

BUCKMINSTER FULLER: “We are not going to be able to operate this Spaceship Earth successfully, nor for much longer, unless we see our fate as common. It has to be everybody, or it will be nobody.”

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THANK-YOU FOR LISTENING…

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