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US consumers claim ethical response

News, 26 May 2015

NEW YORK: A majority of American consumers say they would take their business elsewhere if a company whose products or service they use was embroiled in a supplier scandal.

Proxima, a procurement services provider and outsourcer, polled more than 1,000 American consumers earlier this year and found that 74% stated they would be unlikely to buy products or services from a company involved in controversial supplier practices.

And they were prepared to take a personal hit: nearly 66% would stop giving such a company their business even if that company was the most convenient and cheapest option, Supply Management reported.

Nor was this attitude restricted to better-off consumers. One in three of those earning less than $35,000 a year indicated they would avoid patronizing a scandal-ridden company.

Further, nearly a third of respondents said they would proactively tell friends and family to stop spending their money with a company involved in controversial supplier practices.

"In recent years, we've seen a tremendous shift as companies are relying more heavily on suppliers for everything from their core offering to the market to back office services," said Jonathan Cooper-Bagnall, evp & commercial director at Proxima.

"With this increased reliance comes increased risk and a requirement to engage suppliers with ethical and responsible track records," he added, arguing that the study showed companies who did not do so were "at risk for significant commercial consequences".

Consumers don't draw a distinction between company and supplier, he said. They "are placing as much blame, if not more, squarely at the feet of the company".

But what consumers say they do is not necessarily the same as what they actually do. And beyond that there is also the issue of the extent of their knowledge.

This was clearly evident two years ago when a clothing factory collapsed in Bangladesh, killing 1,120 people and leading brands, including Walmart and Gap which sourced clothing from that country, became involved in talks about improving fire and safety regulations there.

A Harris Interactive poll at that time showed that over half of Americans (56%) did not look to see where clothing items were manufactured before making purchases.

And while 69% of those polled had heard about the factory collapse, with 92% of those aware it had killed clothing workers, among these consumers, over half (52%) said that the deaths would not affect their purchase decisions one way or the other.

Data sourced from Supply Management; additional content by Warc staff