Since launching in 2004, online retailer Ethical Superstore set out to demonstrate that CSR and growth need not be mutually exclusive. The business opened its first online store in 2005, going on to experience 150-200% growth for the first three years, until the recession hit in 2009 and growth levelled out. Ethical Superstore is now month-on-month profitable for the first time since launching, thanks in no small part to combining an entrepreneurial spirit with CSR activity.
As founder and CEO Andy Redfern explains, the company’s social responsibility falls into two categories: “The products themselves had to tick an ethical criteria box, but it was also about how we sold and delivered that service to our consumers,” he says. “There was no point in selling ethically friendly products if our business practices weren’t in line with what that product stood for.” As a result, the company works hard to test different ways of doing business in order to minimise its impact on the environment.
One of the biggest areas of responsibility in online retailing is packaging. According to the Government’s policy on Reducing and Managing Waste, in 2011 the UK disposed of an estimated 10.8 million tonnes of packaging waste, of which around 67% was recycled – up from 27% in 1998. The Ethical Superstore experimented with various techniques to reduce the amount of packaging, while ensuring that products arrived intact, and that consumers could easily recycle or reuse any boxes or padding. “We used exploded rice filler and even tried popcorn,” says Andy, who discovered that while the different techniques were environmentally friendly, they left the consumer with a disposal challenge. The winning formula was shredded cardboard, which stayed intact in large chunks that consumers could easily recycle. “We found a way of keeping it integral – it was good for consumers and good for us as we could use scrap cardboard.”
Cost savings have also gone hand-in-hand with planetary savings. The new packaging saved the business between 30-40p per order, which Andy says has a real impact on the bottom line. “It was just one area where thinking and innovating enabled us to deliver sustainable products to consumers while also meeting environmental goals,” says Andy. Another area in which CSR and cost savings made a difference was in the warehouse, where the company implemented sensor-activated lighting in 2012, seeing payback within less than two years.
The same positive, creative attitude to business has been applied to ensuring that Ethical Superstore maintains good relationships with its suppliers, notable in an industry where retailers are renowned for squeezing supplier margins. Andy’s answer to supplier problems was to find a mutually beneficial solution. “We would go back to a supplier and say ‘OK, sales of your product are static or falling. What can we do together to improve them?’ It’s a joint problem.” For example, some suppliers have a policy of not discounting. Instead they may be happy to support Ethical Superstore’s next catalogue with advertising in order to achieve more product visibility. Or Andy might work with the supplier on a sampling programme, so every customer tries their products. “By not being prescriptive to the supplier and instead saying ‘let’s go on a journey together’ we have had much more positive results,” he says.
The company obviously understands what makes its various audiences tick. In 2013 it invited consumers to round up their basket total and donate the additional money to charity. Over £21,000 was raised for causes including the Syria Appeal and the Philippines Typhoon Appeal, both launched by the Disasters Emergency Committee.
Integrating CSR into the beating heart of a business – from products and customer service to operations and supply chain – can be key to a thriving company, but there is no single rule for doing this. As Andy advises, begin by taking positive steps. “Ask ‘what can I do with my remit that actually allows my business to be a driver for success, a driver for change and a driver for supporting CSR?’ in whatever way is appropriate for your organisation. That will be different for every business and every market.”
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