Origin Might Just Matter
James M. Borneman
Tragedy struck Bangladesh apparel manufacturers again with a building collapse, which reportedly killed more than 1,000 workers. A fire in November 2012 claimed 112 workers. And it appears that unacceptable working conditions are making apparel brands scramble.
What is at risk? Carefully crafted reputations and vast investments in brand identity, all in the hands of fickle consumers whose values can shift quickly.
For years, the conventional wisdom was that Made in USA was an arcane idea. The world is a flat global marketplace. Standards, even ethics, are trumped by one thing — price.
When the recession hit in 2008 and 2009, and the job crises took hold, the tone started to change among U.S. consumers. Consumers could feel good about supporting U.S. jobs with their purchases. They started to become aware of where things are made, and some actively searched for Made in USA products.
China is another factor in the scramble, with rising labor prices making the "China price" no-brainer a little more complicated. It has been reported that sourcing companies are moving beyond China in search of the cheap needle — to Vietnam, Myanmar and, yes, Bangladesh.
Some brands, like Disney, are banning licensees from manufacturing in certain countries. Brand equity protection is entering the sourcing equations. Telling U.S. consumers that inspections and certifications are in place will not protect a brand from the damage caused by an unforeseen tragedy and losses of life.
Any cloak of social responsibility falls to the ground when factories collapse or burn and unacceptable working conditions make headline news.
A key factor in covering these events in the news is uncovering which brands' apparel is strewn among the death and rubble. It is a compelling, unseemly story of exploitation and greed - at least, that is the sound byte, that is the image, and that is everything that is the enemy of a brand.
There are those who make a case that origin matters. Some link it to the recent rule changes in the U.S. food industry. When you go to the grocery store fish counter, origin of the species is clearly labeled — U.S. shrimp or Vietnamese shrimp? How about some fair-trade coffee? Some believe, in branding circles, that this is conditioning consumers into considering origin more closely.
One consumer stated in a feedback post that it is a simple equation: If you consider the price and then you consider the place of origin, it doesn't take a rocket scientist to put two and two together. That may be harsh, and the reality is that it may be much more complicated. Take the case of luxury goods produced in horrible conditions; the high price may conceal a very low cost of manufacturing. So, more movement in supply chain transparency will rule the marketing message.
Hopefully, it's more than a marketing message. Hopefully, brands will act on new consumer interests and priorities.