TFR | Strategy Consulting

When I was 16 years old, I didn’t know what to study at university. I spent some time soul-searching about what subject I liked at school and why. I liked Economics but specially the social aspect of it. I have always been passionate about History and trying to put all the pieces of the puzzle together (even there is no single version of the truth). So, I finally decided to study Sociology (the study of social life, social change, and the social causes and consequences of human behavior).

While studying Sociology, I realized how differently Sociology, Psychology or Economics, to mention a few disciplines, approached the same issue. There was a lack of any multidisciplinary collaboration. In my opinion, every discipline (science) must connect to each other while breaking down silos and biases. Similar issues arise when individually analyzing business results (challenges, opportunities…) from a financing, marketing, operations, planning or designing perspectives.

I became passionate about retail for the same reasons I’m interested in the Humanities. Retail is a reflection of society. Understanding retail is understanding social, political and economical trends. A retail business should be analysed like social phenomena: from different angles. As customers, we have been focusing too much on the product or the front-end side of the business (customer-facing side of a company). Therefore, “Brand-Consumer” was a superficial relationship. Equally, brands have been focusing too much on the product and its financial ratios. In No Logo: Taking Aim at the Brand Bullies, (Noami Klein. 1999) Klein argued that globalization is a process whereby corporations discovered that profits lay not in production (outsourced to low-wage workers in developing countries), but in creating branded identities people adopt in their lifestyles. Brands were “cool” and supply chains were the dark side of the business. Only a few people cared.

Retail has changed. B2C businesses communicate with consumers through selling not only products but experiences (including the feeling of community). This is why Nike is not selling directly on Amazon and is centralizing its distribution network. Thanks to the Internet (e.g. sites, social media, etc), B2B players are implementing the “new business model” to get closer to their customers. On the one hand, consumers care about retailers’ ethics (e.g. environmental and social impacts). On the other hand, brands are participating in the political arena and taking a stand in social and environmental issues. This is not an exception, but the rule.

Brands are niche “flexible” religions

When consumers are shopping for clothes, or any other product (i.e. food, cars, smartphones, watches) they fulfill their needs. Their motivation goes from physiological (i.e. clothes can insulate against cold or hot conditions) to self-actualization needs (i.e. lifestyle, status), as described by Abraham Maslow and commented on the fashion pyramid. Customers are demanding more transparency and originality, values become essential elements of the story. Humans are political and philosophical animals and many have the chance to satisfy needs other than simply physiological ones. These are, for instance, universal values such as freedom, equality or solidarity.

The 20th century saw the emergence of brands and logos. Early versions of logos were developed by Ancient Egyptians. In the Middle Ages (around 1300 AD), shops and pubs used signage to represent what they did. The Bass Brewery’s label incorporating its triangle logo for ale was the first trademark to be registered under the Trade Mark Registration Act 1875. Since then, the power of brands grew exponentially. Coke, for example, changed the appearance of Santa Claus…

Brands are positioned from mass-market segmentation, at the bottom, to supreme, at the top. At the top of the pyramid, brands tend to underline creativity, craftsmanship, experience and art. Brands are somehow niche religions with their own values, lifestyle, language, symbolism… Even if not 100% accurate, if you tell me what you buy (category of products, segment, style, size, colors, brand, etc), I’ll tell you who you are. Or like Joshua Becker said on becomingminimalist.com “What We Consume Determines The Lives We Live”. As customers are more sensitive about the back-end side of business (Back-end is the operations part of a business: manufacturing, finance, distribution, inventory management, etc), brands are becoming active organizations in defense of “their” values (e.g. human rights, sustainability). Being a cool brand is not only a marketing thing but is also involving other departments or perspectives.

These are some interesting news items I read in relation to brand’s activism or brands “investing” on “sustainable back-end”.

STARBUCKS

Starbucks is Investing $100M in Small Businesses and Black Communities (January 2020). Starbucks is creating a new $100 million fund aimed at investing in community development projects and small businesses in areas populated by people of color, CNBC reported. The plan is to invest the funds over the next four years in 12 U.S. cities with populations that are Black, Indigenous or people of color, including Atlanta, Detroit, Los Angeles, Philadelphia, and Houston. Small businesses and neighborhood development projects are the target beneficiaries for this program.

NIKE

Nike latest stores format includes Rise (its first store recently opened in Guangzhou) and Unite. Nike Unite serves as a community centerpiece connected by sport. The products are reflective of what the community is interested in: locally curated, every-day essentials at the best price, matched with the newness of select seasonal offerings. Additionally, Nike hires people who live in the local community.

BLACK AMBITION

Producer and rapper Pharrell Williams is coupling his entrepreneurial spirit and activism with the launch of Black Ambition, an incubator for Black and Latinx entrepreneurs launching startups in tech, design, healthcare and consumer products. The initiative has raised an undisclosed amount of funds from Adidas, Chanel, the Chan Zuckerberg Initiative, The Rockefeller Foundation and the Visa Foundation among others and is looking to partner with more companies for mentorship (Monica Melton. Forbes. December 2020).

Sources:

• https://www.mytotalretail.com/article/starbucks-is-investing-100m-in-small-businesses-and-black-communities/
• https://99designs.es/blog/design-history-movements/the-history-of-logos/
• https://topdocumentaryfilms.com/no-logo-brands-globalization-resistance/
• https://www.forbes.com/sites/monicamelton/2020/12/02/pharrell-launches-black-ambition-an-accelerator-for-black-and-latinx-entrepreneurs/?sh=3ca67f8e461e