Abstract
This chapter focuses on strategic retailer-Non-Profit Organization (NPO) partnerships, based in North America and Europe, from a management perspective. It explores how and why these partnerships have had an impact on the retailer-consumer relationship, how they have shaped and influenced socially conscious shoppers, and how they have affected consumer trust as well as retail business practices and strategies, within the last decade. Retailer-NPO partnerships have emerged as a viable business strategy to support Corporate Social Responsibility (CSR) initiatives now commonplace among most large retail organizations. Consumers have become empowered, with the help of new social media technologies, to efficiently communicate, influence, and persuade other consumers around the globe. Therefore, consumers increasingly expect retailers to have an ethical and social responsibility to their people, products, operations, and communities. CSR practices have become integral to retailer sustainability and managing complex retailer-consumer relationships. This chapter reviews relevant theoretical frameworks, discusses the latest research findings from literature sources, and examines the industry practices (case studies) of several retailer-NPO partnerships across North America and Europe.
TopIntroduction
The role of retail organizations and how they are perceived by society has changed and evolved over time. It is important to understand where and why these key shifts occurred throughout recent history, to provide context and understanding to the strategy behind retailer-NPO partnerships. By examining some of the shifting consumer behaviours that stemmed from economic, social, environmental and/or global issues during the last 40 years, we can better understand how the retailer-consumer relationship has changed and why retailer-NPO partnerships have emerged as a viable business strategy to support CSR initiatives among large retailers throughout North America and Europe. Highlights from a thorough and relevant literature review that focused on key retail industry influences and impacts throughout the past four decades is examined throughout this chapter introduction.
Historically, the role of a retail business has been fairly simple: sell goods and/or services to the consumer at a profit thereby positively contributing to the economy. Basically, the retailer’s role was that of an economic contributor. Fast-forward to present day and retailers have a much more complex and varied role, not only in terms of how they contribute to the economy, but more importantly, how they (and their coveted brands) are perceived by the communities in which they operate. This dramatic shift - from the retailer as economic contributor to the retailer as social arbiter - did not occur overnight. There have been incremental shifts in consumer behaviours over the last 40 years that have forever transformed the role of retail organizations within the economy and how they are perceived within society.
Retail in the 1970s
An example of a significant economic change was the inflation that followed the energy crisis of 1974 which introduced new retail sectors (ie. home improvement and DIY), more competitive prices, and greater product selection (Walters, 1981). The 1970s represented an explosion of growth for retailers like Walmart, for example, who for the first time had national presence with 51 stores across the United States and began trading on the New York Stock Exchange (Walmart, 2013). These economic and social changes, therefore contributed to shifting consumer behaviours including having access to more categories and products as well as cheaper prices.
Retail in the 1980s
The 1980s were defined by excessive wealth (ie. higher levels of disposable income) so retail business practices were motivated more by profit during this time period rather than consumer demand for retailer contribution to altruistic environmental or social causes. If retailers were participating in environmental or social activities, they tended to advertise them through traditional media or by publishing stakeholder reports, but these reported activities were not linked to corporate performance and lacked a set of acceptable standards against which performance could be measured (Min-young, Fairhurst & Wesley, 2009). In an effort to increase sales, satisfy shareholders and conquer new markets, a small group of large retailers from North America and Europe embraced retail internationalization strategies, and paved the way for other retailers to follow suit a decade later (Alexandru & Cristian, 2008). This decade of excess signified a shift in power within the retailer-consumer relationship; for the first time consumers held the balance of power, demanding more for less in an internationally competitive environment.
Key Terms in this Chapter
Retail Internationalization (RI): Refers to the expansion of a retailer’s stores or outlets into other countries or territories outside of their country of origin.
Charity Retailer: A charity retailer is an organization that only sells merchandise that directly benefits or supports a specific cause or several causes.
Customer: An individual or group of individuals that is part of a target market, and purchases a firm’s products or services.
Cause-Related Marketing (CRM): Refers to the marketing-specific activities and initiatives that occur based on the cooperative efforts of business and non-profit organizations and is seen as a way for the retailer to establish long-term differentiation from competitors and to add value to their brand ( Lafferty, Goldsmith, & Hult, 2004 ).
Corporate Community Relations (CCR): Refers to the specialized function within a retail operation dedicated to building relations with the businesses, people and charitable organizations within the community where a retailer operates.
NPO: An acronym that stands for Non-Profit Organization.
Stakeholders: Refers to individuals or groups of individuals who have some type of interest or concern in a public, private or non-profit company or business. Examples of stakeholders are: customers, suppliers, partners, service providers, industry thought leaders or funders.
Shareholders: Refers to individuals or groups of individuals who hold shares (ie. partial ownership) of a publicly traded company.
Retailer-NPO Partnerships: Refer to a unique, mutually advantageous, and often exclusive relationship that is established to achieve specific objectives and is driven by a set of common goals.