Retail Horizons: Will growing transparency slow consumer buying?

Sustainable Futures

Retail Horizons: Will growing transparency slow consumer buying?

Image of shopper with smartphone by Pressmaster via Shutterstock

This article is the ninth in a 12-part series about the future of U.S. retail for the Forum for the Future-led 2014 Retail Horizons project in partnership with Retail Industry Leaders Association. For more about the project and the toolkit available in October, read the first post, which also contains a table of contents for the series.

Today, people have unprecedented access to data and information and communications technology. In fact, by the end of the year, there will be more mobile subscriptions than people in the world, according to a UN agency report. This, combined with digital innovation and a growing sense of consumer empowerment, means we are seeing radical transparency become the new norm.

This is already influencing purchasing decisions. Thanks to apps, it has never been easier for consumers to find out where their food was grown or where their clothes were made. Monterey Bay Aquarium's Seafood Watch recommends which fish is most sustainable to eat and GoodGuide, has over 200,000 product ratings to help consumers understand a product's health, social and environmental impact. Buycott takes it a step further and enables consumers to understand which causes a particular product is supporting and decide whether they want to fund that cause or not before they buy.

It's also much faster and easier for consumers to take action when they lose trust in a product or service. Take the example of "pink slime" (known in the meat processing business as Lean Finely Textured Beef). LFTB is made of sub-par beef scraps and connective tissue mixed with ammonia to turn formerly inedible meat into edible ground beef. After finding out that schools were serving Bettina Siegel started a petition on change.org. Siegel's petition garnered over 250,000 signatures, and LFTB was removed from most school cafeterias nationwide in only 10 days. Consumers are increasingly able to act as citizen activists and — with little or no resources — start campaigns that can force industry-wide changes.

And then there are actions from NGOs, who use this new information to support powerful campaigns aimed at mobilising thousands to push companies for better standards. There has been a noticeable increase in these campaigns during the last few years; for example, Oxfam's "Behind the Brands" scores how the social and environmental policies of the world's biggest food companies and pushes for change.

We are also seeing NGOs use technological advancements to pinpoint transgressions throughout the supply chain. SkyTruth, a non-profit, uses satellite imagery to look for environmental damage and link that in with other data sets to find perpetrators. As Hugh Knowles, head of disruptive innovation at Forum for the Future, puts it: Suddenly the dot on the satellite dumping the waste becomes a ship identified by GPS data and a timestamp.

What does transparency mean for retail?

Some retailers are embracing this trend and using it to their advantage. Whole Foods Market has committed to full GMO transparency by 2018 for its grocery stores. And clothes retailer Everlane promises to "Know your factories. Know your costs. Always ask why." It lists all costs for raw materials and where exactly they're from, so you can see the mark-up they're making, and creates a profile for each factory they source from.

But what else can retailers do to make sure that ever-increasing levels of transparency don't backfire on them, and use transparency instead as an opportunity to build trust with all stakeholders — from consumers to communities to activists?

As part of Retail Horizons, we created four scenarios that explore how future trends like transparency might develop over the next two decades. In the Predictive Planet scenario, we find a future world where technology enables companies to fulfil consumer desires and consumers are highly reliant on "megabrands" to anticipate their needs. In this world, we could imagine that transparency continues on its current trajectory, with stakeholders having full visibility into how business operates in order to maintain loyalty.

However, what if transparency unfolded differently? In Double or Nothing, we find a future characterized by political instability and uncertain markets. Despite the clamor for greater transparency, many consumers are nostalgic for simpler times and prefer to know less about where their products come from. Companies are often caught in the middle.

These aren't predictions, and neither scenario will come true exactly as described. The point is to consider how the different scenarios would impact your business and future proof your strategy. The scenarios are designed to be used in conjunction with the toolkit we've put together, to help companies think about how futures trends might impact them and navigate an exciting and viable way forward. We invite you to join us in designing the retail industry of the future.

Top image of shopper with smartphone by Pressmaster via Shutterstock.

Topics: