This week the team turned their attention to Coles and it’s very public backtracking around it’s zero single-use plastic bag policy. In this discussion, which has been recorded below, we looked at the pressures brands are facing to lead on moral issues and the lessons all brands can learn from Coles’ handling of the situation.
Please enjoy this conversation and if you are facing your own brand challenge then don’t hesitate to get in touch.
Q: Coles, Woolworths, McDonald’s – all have made recent moves to be seen to be more green – what does this say about consumer expectations of the brands they consume and connect with?
Paul Nelson (Managing Director): I think there's an increased responsibility around organisations to communicate more effectively and to communicate more openly and honestly than they ever have before. There is nowhere to run and there is nowhere to hide and there's an expectation that customers now have on large organizations like the ones you mention to do the right thing. If they don't do the right thing consumers are increasingly voting with their feet.
Purvi Desai (Research and Insights Manager): I think the problem here is that we, as consumers, are looking to brands to lead in their behaviour. But Coles and its colleagues are missing that opportunity. They waited until we, their customers, start showing signs of wanting to be more environmentally friendly and then they become conscious about the appearance of how they use plastics. As a brand, when you only make a change after considerable pressure, you sacrifice any equity you could’ve extracted from that change.
Kylie McNamara (Director of Strategy): Good brands need to be in touch with their customers and their interests / concerns. Clearly these brands have understood that there is a critical mass of their customers who are concerned about these issues, and therefore these brands need to respond. I think that the consumer expectation is for the brands to not be contributing to the problem. For example, the visuals on War on Waste showed McDonald’s straws everywhere, thereby making McDonald’s part of the problem. They needed to respond to ensure that they weren’t such an obvious contributor. I’m not sure if consumers need brands to be solving problems, more changing their behaviour to make sure that they “do no harm”.
Ryan Dunshea (Account Director): There is an expectation now that organizations move with our culture. We expect them to move with our changing moral codes, in Coles’ case that they recognise that the mood has shifted in the sense that it is no longer acceptable to produce massive amounts of waste. So once awareness builds amongst a community there is an expectation that large organisations will mirror that way of thinking.
Q: Looking at Coles more closely – what does the latest move by Coles, the flip / flop of a promise around plastic bags - say about the Coles brand?
PN: I think consumers typically borrow ‘halos’ of association from brands. Think luxury brands particularly, but also the halo effect in the case of Coles. What is this decision communicating? That they are unsure, they flip flop, they are indecisive? So as a consumer I now have to wonder, does that perhaps reflect on me if I choose to shop at Coles? Does it look like I don't quite know what I'm doing either? I'm not sure whether I'm for the environment or against the environment and I'm just going along for the ride? I don't think it communicates anything very positively to customers and therefore I think they may in fact lose customers as a result.
KM: The brand doesn’t have clarity and confidence at the moment and is merely reacting and responding rather than formulating a clear point of view and sticking with it. The challenge of being a large brand with a large customer base is that you can’t please everyone, but they seem to think that any protest, no matter how small, is a bad thing that they need to respond to, rather than accepting that they need to take a position and stick to it. Another key mistake was relying on anecdata rather than actual evidence. All the research I’ve seen suggests that around 3 in 4 Australians support a plastic bag ban, and only around 10% are actively against. The fact that the 10% were so vocal led them to believe that they represented the mainstream, not the fringe, and they responded accordingly. Brands need to do better in being able to identify authentic consumer beliefs rather than social media hysteria.
PD: What I think it says is that Coles’ heart isn't in it. They can have all the marketing language and verbiage around demanding a greener planet and have environmental peace but ultimately they're being reactive to louder parts of their consumer base but actually not clear or aligned on their environmental principles.
Lauren Kelly (Account Director): I would say it is indicative of the lack of higher order purpose that sits inside the Coles brand to begin with. Strong brands sort people in, they sort people out and they dictate behaviours as a result. Coles is in trouble because it's lost its sense of purpose, if it ever had it in the first place.
That means, therefore, that it looks to its customers and asks them “well, what do you want us to do” and therefore their brand and their actions become designed by committee. Ultimately then they lose their distinctiveness because Woolworths has the same access to the same sorts of people asking the same sorts of questions.
PN: The Coles website promotes very actively their commitment to environmental initiatives. It is a fundamental inconsistency now.
Q: Other retail brands are in a similar situation in terms of pressure around cleaning up their environmental act – what lessons can they take away from the Coles fiasco?
PD: As a brand, if you're going to take on an initiative, whether it's customer led, or whether it's something you want to stand for, be bold and do it thoroughly. Be completely and passionately aligned behind it. If there are negative reactions, then help your customers along on the journey to understand why you are doing it. Don't abandon it at the first sign of heat.
RD: I think the lesson here is that flipflopping breeds cynicism inside your consumer base. They will not believe that you are an authentic brand anymore. If you keep on flipflopping between decisions it will damage trust. Aldi have been plastic bag free for years and didn’t wait until there's been massive national consumer pressure to do so. They did the right thing from the get go. So the lesson can be learned, consistency breeds belief in brands.
LK: I think the big lesson here is how important it is to be clear on what you stand for in the first place. If Coles was truly clear on what it stood for and lived and breathed, then they would have had the impetus to proactively change their behaviour to protect the environment. I think the big lesson that other brands need to take note of is that when you don't know what you stand for, it's very easy to lose your way.
PN: The key lesson is to have a clear strategy. Brands that have a clear strategy lead their markets. What I'm hearing from Coles is all the characteristics of a follower brand.
They followed the market noise around ‘War on Waste’ and thought “we'd better be seen to be doing what all the competition's doing”. Now they are in a situation where they're not sure of the way, so they're going to follow the thing they do understand which is the dollars. It feels like a strategy of followership, not leadership.