Readjusting clothes prices to reflect the true costs of producing them safely is a challenge that cannot be ducked, says Mallen Baker
The textiles industry has been rocked this year by criticisms following the collapse of a factory roof in Bangladesh, and other appalling events. Now companies such as H&M are stepping up to the plate to put money into better and safer conditions for workers and to ensure that a living wage is paid.
Over time, we are seeing a shift that implies that retailers are – one step at a time, and perhaps grudgingly to the last – accepting their responsibility for what happens within the factories that service them.
This has a cost. But it is a legitimate cost. The illusion of ultra-cheap clothes has been achieved by companies externalising the costs of worker safety. It is logical and right that, over time, these costs are going to come back to where they belong and become reflected in prices in the shops.
The big question is, what will be the consequences of this change? As with energy, once people become used to prices at a certain level they tend to consider them an entitlement.
If their quality of life deteriorates over a period – for whatever reason whatsoever – it’s because somebody has done something bad to them and must be held to account.
This has been most immediately a problem in climate change policy, because it’s very easy to discount the consequences of global warming as something that lies well in the future and maybe is just a lot of leftie alarmism anyway. So surely, policy to address such matters cannot be more important than people’s well-being in the here and now. And besides, energy is a basic right.
It’s harder to discount the impact of appalling working practices on the people that endure them. Harder, but not impossible.
Over the past decade, we have seen plenty of shoppers who have taken the choice simply not to know what might lie behind the clothes they buy. They want the clothes and they don’t want the guilt, thank you very much.
Bring your customers
Companies such as Primark and H&M have surprised a number of the critics by the degree to which they have responded to the challenges. But the question is how far they can really go if they fail to take their customers with them.
You should never underestimate the potential impact of failure. When B&Q first introduced its commitment to FSC timber 20 years ago it also invested in a considerable amount of point-of-sale communication to ensure its customers understood the value to them – and the importance of the initiative.
But when frozen food company Iceland announced 10 years ago that it would sell only organic food – at no extra cost to customers – it was hammered because it failed to take those customers along. The initiative foundered. Customers left in droves. Heads rolled at the top.
The answer for the low cost clothing retailers isn’t to backtrack and keep their fingers crossed. The terms of reference for the industry are changing, and to be successful they need to keep up.
But they still have one of the most difficult marketing challenges we’ve yet seen: keeping the loyalty and support of customers whose approach to date has been to embrace cheap clothing and to avert their eyes from any evidence of the consequences.
It’s one of those times when robust regulation could play a useful part. The most powerful undermining force that could throw a spanner into the works would be free riders – other retailers that determinedly avoid bearing any of the cost of ethical standards, and are willing aggressively to target customers on the lowest possible price.
In the absence of regulation, companies are caught in an awkward middle ground – serious about promoting change on areas such as fire safety in factories in Bangladesh, while fighting hard among themselves over the subject of who pays the cost. At the moment, they know that if they bear the cost, they will lose customers.
But there is nowhere to hide. This is their cost. These are the genuine costs of producing clothes, and ultimately the customer should pay those costs in the prices they pay in-store.
If customers are so used to low prices that they won’t accept the change – well, whose fault is that? Marketing your way out of such a hole may be one of the most difficult marketing challenges – but it is the challenge companies must face, self-created and fuelled over decades.
Mallen Baker is a contributing editor to Ethical Corporation and managing director of Daisy Wheel Interactive.ethical companies ethical consumers marketing supply chain