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Retailers Need Corporate Social Responsibility Strategy

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Reliance Delight stores that sold a range of fresh and frozen meats and seafood were closed because of demands from a section of shareholders of Reliance Industries who claimed that Reliance’s ‘non-vegetarian’ business hurt their religious sentiments.

As the retail industry grows, and global retailers enter India, the sector is under scrutiny of government, NGO’s, special interest groups and customers.  Retail Companies will face increasing pressure towards addressing a wide array of environmental, social, and governance issues—from environment, obesity, and human rights to social issues.

At around US$ 500 billion, the Indian retail industry is amongst the global top five retail markets. Policies for the retail sector in India have been hugely debated, underlying the network of stakeholders that are connected with the industry. Sensitivity to FDI in retail stems from the socio-economic impact of the retail industry. It has the most direct interaction with public. From large malls, retail chains to small shops, retailers’ employ millions, have a physical, financial and emotional impact on the community they are in and play a role in deciding what consumers buy.

As the expectations from companies has increased, so has the capabilities of individuals and special interest groups to observe almost every activity of a business, to rally support against it, and to launch powerful campaigns.
The success of a Retail organisation depends on its relationships with the external world—regulators, potential customers and staff, activists, and legislators. The world is literally at the doorstep of the retailer.  Decisions made at all levels of the business, from the boardroom to the shop floor, affect that relationship.

An important aspect of CSR is to know the stakeholders. Retailers must understanding stakeholders as rigorously as they understand their customers.  At corporate level, the understanding will help develop an overview of strategic social issues, and at the level of a single store, market, or project understand local issues.

CSR, through which a corporates incorporate social, environmental, and ethical aspects into the business model, has become critical to long-term growth and success for the retail sector. Retailers that embrace CSR demonstrate that they value their employees, customers and communities. The benefits of CSR to retailers are enhanced reputation, loyal customers and a more committed workforce.

A strong CSR strategy goes beyond regulatory compliance.  To be effective CSR has to be part of the corporate strategy, integrated and implemented at a corporate, regional and local level.  Retailers need to develop distinct India –focused CSR strategies aligned with Indian values and culture.
In India, retail chains have to take into account the diversity and cultural dynamics. Language, values and beliefs of each region in India reflect unique identities. Because something has worked globally or in one place in India, it does not predict success in another region of India.

At a corporate level, the top management had to be involved in analyzing the major issues and ways in which they impact the society. For instance, issues in the food sector would be different than fashion or luxury sector. A CSR strategy can address the issues of society at large or be closely connected to the areas in which the company operates, based on the framework of government policies.

Innovation and creative solutions can help solve common problems. For example, food retail chains can come together to target the wastage of food, and water, use of plastics, while fashion and lifestyle companies can play a great role in upgrading the talent pool, ethical sourcing, etc. Together these retail chains can leverage their strengths to solve deep-rooted problems.

India is a vast country, with great geographical, cultural and socio- economic differences. The CSR strategy at a regional level has to use the Strategic framework of the Corporate CSR strategy and make it relevant to the regional issues. For instance, in certain regions empowering women could be done through an entrepreneurship model, in other states basic education or even sanitation and healthcare could be the step towards the same objective.  Regional sensitivities, especially for large retail chains are a challenge that needs a strategic, planned approach to use of CSR resources.

At a local level, the retailers interact directly with society. Here CSR has not only to be done, it has to be experienced by the customers and the community.
CSR activities for a local retail outlet are funneled through the regional CSR program.  By adopting and implementing CSR policy in a strategic and planned manner, retail organizations help manage their reputation

Communications and employee engagement are key to CSR programs being implemented successfully. Employees in retail organizations, typically have employees from the region and the community in which a particular store operates. An employee engagement and understanding of the CSR initiatives motivates the entire company, customers and the community.

The CEO must first clearly articulate the particular brand and values of the organization incorporate them in its CSR strategy then institutionalize it companywide.

When companies develop CSR processes, clarity is essential: conflicting policies, standards, guidelines, and initiatives can be counterproductive, creating confusion.  Leaders must clearly articulate to ensure that all managers and employees fully understand the company’s CSR commitments.

For CSR to be successful, it must be part and parcel of everyday business.

About the author: Meera Tenguria

A communications and corporate reputation management consultant with over 20 + years of experience, she has advised various clients on strategies for stakeholder relations. With a Masters in Sociology, is also a keen observer and writer.

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