Clearing up the supply chain

In response to the recent outbreak of E. coli infections in the United States, Walmart has announced that it will be implementing blockchain technology to track its vegetables. This will allow customers to see where the produce was grown and how it was transported to the store, providing a high degree of transparency to Walmart’s vegetable supply chain. Walmart is not the first retailer to incorporate transparency to its supply chain – a number of other retailers, fashion retailers in particular, provide detailed information about where and how their products are made.

Why should retailers incorporate transparency?

Eighty three percent of consumers indicate that transparency is key to building trust.1 This is supported by academic research that not only indicates transparency efforts by brands are key to building trust, but that they also lead to more positive attitudes towards brands.2 The demand for transparency has resulted in a number of third party groups providing information about brands and their sourcing. For example, Good On You allows users to compare the impact of fashion brands on the environment, workers, and animals.

Transparency also has a number of practical benefits for retailers. For example, the blockchain technology that Walmart will be implementing will allow them to track which farms produce comes from in case of future contaminations – a technology that would have been helpful throughout the recent strawberry fiasco in Australia. Another example is the use of blockchain technology to tackle the issue of counterfeiting through the ability to track and verify if a product was made by the actual brand.

Which retailers are incorporating transparency?

In addition to Walmart and its implementation of blockchain technology, a number of brands incorporate transparency into their marketing communications. For example, H&M’s new brand, Arket, provides information on their website about where their garments were made and by whom. Another example is Everlane and their transparent pricing strategy, where they list individual components of garments so consumers can see the mark up the brand charges. While it is difficult to obtain true transparency, brands can demonstrate their good corporate citizenship through incorporating transparency principles into their business practices.

  1. SAI Global (2017). Source.
  2. Kang, J. and Hustvedt, G. (2014). Building trust between consumers and corporations: the role of consumer perceptions of transparency and social responsibility. Journal of Business Ethics, 125(2). 253-265.