Friday, August 25, 2006

Why do we hate Wal-Mart and love Innocent?

It's a simple enough question - why do ethical-thinking folks (and that, IMHO, should be all of us) hate market-dominating firms like Wal-Mart and Tesco but love Innocent, even though its share of the UK smoothie market went from 37% to 61% between last year and this?
Well it clearly isn't about their "ownership" of their market spaces - Tesco and Wal-Mart are just as dominant and have just as much market power in their areas.
So why is Wal-Mart seen as "The Beast from Bentonville" and Tesco "The Creature from Cheshunt" (my own phrase!)?
The simple answer is their perceived behaviour — how they're seen to use the market power they've gained through success with customers.
Do any decent Internet news search and you'll find scores of stories coming up about how Wal-Mart and Tesco are said to be Janusian (two-faced) in being nice to customers and promoting themselves as helpful and friendly in their advertising to them (c.f. Tesco's long-standing "Every little helps" slogan and use of the voices of well-loved celebrities in their UK TV ads) while at the same time being horrid to their suppliers (see countless examples of Tesco being accused of forcing down prices paid to farmers and demanding payments from suppliers just to stock their products, supposedly to cover the costs of in-store promotions) and staff (see the long-standing stories surrounding Wal-Mart's use of low-paid, sometimes illegal, immigrant staff supplied by agencies).
So why are we bothered? My view is that, from our own personal experience, we hate bullies, particularly disingenuous ones who pretend to be nice while actually being nasty. Like the "Things It Took Me 50 Years To Learn" item - "If someone is nice to you and nasty to the waiter, they're not a nice person."
But, as I suggested, not everyone is bothered. Some folk don't care about how Tesco behaves to its suppliers - they just want it to give them the lowest prices and best service. Who cares how they come about?
But as the number of ethically-motivated consumers grow, perceived behaviour will become an increasingly important part of corporate strategy as a source of competitive advantage and differentiation for long-term market leaders.
P.S. Note from my little black Ideas notebook - "1/3/04 - Ethical is the new organic." I may not have published it then, but it's increasingly proving to be true.

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