Marketers must get closer to supply chain or risk long-term brand damage

As supply chains come under greater scrutiny from consumers, marketers will be on the frontline of any backlash if they fail to truly understand how their product is made.

People Tree supplier Creative Handicrafts celebrating Fashion Revolution Week 2018.

As consumers become increasingly conscious of the cost of fast fashion, their plastic consumption and the looming threat of climate change, they are looking for brands to take a stand and show some leadership.

Whether it is enhancing the transparency of their supply chains, committing to sustainable production or dramatically reducing their reliance on single-use plastic, businesses which fail to deliver for today’s conscious consumer are risking the long-term health of their brand.

In the short term, if problems occur in the supply chain it is marketers who will be on the frontline of the backlash and tasked with attempting to rebuild brand trust, so there is growing need for a closer relationship between the two.

Some brands have attempted to position themselves as leaders on supply chain traceability. Iceland put transparency on the festive agenda in 2018 when its Christmas ad, a 90-second film exploring the impact the palm oil trade has on the life of an animated orangutan, was banned by Clearcast for breaching political advertising rules.

Marketers need to have a broader understanding of their brand, including supply chain.

Yilmaz Erceyes, Premier Foods

Carried on a wave of popular opinion, Iceland affirmed its commitment to become the first UK supermarket to remove palm oil as an ingredient in 100% of its own-label food by the end of 2018.

However, in January it was revealed that to meet this pledge Iceland had removed its branding from 17 items, rather than the palm oil. The supermarket said it was not possible to eliminate the palm oil at a “manufacturing level” by the 31 December deadline, although it had “not given up” on the nine frozen and eight chilled lines yet to be reformulated, which are expected to have their branding reinstated by April.

The same month, fast fashion retailer Boohoo found itself in hot water with the Advertising Standards Authority (ASA) after it was criticised for advertising a jumper as ‘faux fur’ when the product contained real rabbit hair.

The online retailer removed the advert and ceased placing orders with the supplier in question, which it said had signed a supplier acknowledgement form committing not to supply products containing real fur.

The faux fur storm at Boohoo came two months after a BBC investigation revealed both Amazon and TK Maxx were selling faux fur products made from rabbit, fox and raccoon fur, despite the fact the latter brand had implemented a no-fur policy 15 years ago.

Futureproof your brand

Knowing about how products are manufactured is no longer a nice to have for marketers, it’s must have, according to Premier Foods marketing director Yilmaz Erceyes. Furthermore, the risk to brand reputation and consumer trust if marketers fail to engage with their supply chain is significant.

“In the modern world where consumers are a lot more connected and every consumer has a platform to share their thoughts and opinions with millions of others instantly, marketers need to have a broader understanding of their brand, including supply chain,” Erceyes explains.

“They not only need to understand it, they have to actively shape it to make sure their brand is futureproof. Otherwise the consequences can be catastrophic.”

Erceyes feels that starting his career on the operations side at Procter & Gamble (P&G) has helped set him apart from other marketers. He joined P&G in 2002 as a process engineer, working in the role for two years before progressing to become assistant brand manager for home care in Western Europe.

Now as marketing director at Premier Foods, Erceyes can see why it is so important to maintain a close relationship between marketing and operations as it helps generate innovative ideas, increases the speed to market and remove waste from the supply chain, meaning funds can be reinvested into marketing.

Collaboration between marketing and operations brought the ready-to-eat Angel Delight to shelves.

The marketing and supply chain teams, for example, worked together to develop a ready-to-eat version of Premier Foods’ sachet mousse dessert, Angel Delight.

“If our marketers just briefed that out, there wasn’t any technology available to make a stable mousse product that doesn’t have any artificial preservatives. However, the fact those teams have been working closely meant they identified the technology, and the supply chain and ops team both bought into why this was a good idea,” Erceyes explains.

“That innovation we did three years ago has been the key driver of the brand growth; the brand has seen double-digit growth every year since then. This collaborative, close relationship is driving our business forward.”

READ MORE: Customer experience excellence requires closer ties with operations

Transparency breeds trust

The fashion industry in particular has long been criticised for failing to deliver supply chain sustainability. In January, as investigation by the Guardian revealed Tesco, Marks & Spencer (M&S) and Mothercare produced clothing in a factory in Bangladesh that paid machinists the equivalent of 35p an hour.

Tesco said it was investigating the allegations. M&S confirmed it had been working with the supplier for 13 years and was also investigating the incident, adding it has a regular brand presence at the factory. Mothercare, meanwhile, stated it works in “close dialogue” with all its suppliers and annually commissions an independent audit of each factory and is reviewing the findings.

The luxury end of the market is not immune from criticism either. Dior, Longchamp, Max Mara and Sandro were found to be the least transparent fashion businesses in 2018 according to the Fashion Revolution Fashion Transparency Index.

The four brands scored 0% out of a possible 100%, meaning they either disclosed nothing or a very limited number of policies, which only refer to community engagement and hiring. According to the analysis, which rated 150 brands and retailers across 250 points, no brand exceeded the 60% mark.

Adidas and Reebox did, however, emerge as the most transparent brands with scores of 58%. The higher scores reflect the fact these businesses disclose all the information currently available to them and will be publishing detailed supplier lists. Other strong performers include Puma (56%), H&M (55%) and Gap (54%).

Some fashion brands have made it their mission to ensure all their products are made according to the highest ethical and environmental standards. Founded in 1991, Fairtrade fashion pioneer People Tree sells clothes made from organic cotton and responsible wool produced using artisanal skills.

Gabriella May, marketing manager and head of ecommerce, sits very near to the supply chain and corporate social responsibility (CSR) managers. This close proximity, combined with weekly briefings with the CSR team, has enhanced her understanding of People Tree’s supply chain.

“The CSR team might tell us about a new handloom being used by our artisan producer in Bangladesh and they’ll talk to us all about how that handloom works and why it’s eco-friendly she explains.

The CSR managers also run masterclasses to explain more about People Tree’s producer partners and what the different GOTS (Global Organic Textile Standard) and WFTO (World Fair Trade Organisation) certificates mean.

Ladies working at Creative Handicrafts celebrating their collaboration with People Tree.

“When we’re making big claims about our jeans using 80% less water than traditional ones I have to make sure that it’s correct, as part of People Tree’s DNA is to be transparent. I’ve seen brands claim very impressive stats that turn out not to be true and that has such a huge impact on the loyalty of your community, it’s hard to bounce back from that as a brand,” May states.

All the social media and marketing content is signed off by the CSR manager and supply chain manager, which means working further in advance. However, while it can take a couple of weeks for content to be signed off, May believes taking care is worth it.

Going forward she wants to bring People Tree shoppers closer to the artisans through live chats, a way she sees of removing the “weird wall” between producer and consumer. May firmly believes marketers need to offer consumers greater insight in order to drive demand for sustainable fashion.

“I think consumers are interested [in transparency], but they’re also easily swayed by a slick marketing campaign which uses buzzwords. I think they’re interested in organic and being kinder to the planet, but not to the point where they understand what a supply chain is,” she argues.

“I think that’s where the education needs to begin to talk to people, like me a couple of years ago who didn’t understand the supply chain, and break that down and then consumers will start to ask more questions.”

Ways of working

The way a business is set up can have a massive impact on whether marketing is able to get closer to the supply chain.

At beauty brand Avon each category leader in marketing has a personal counterpart in research and development (R&D) who work together to ensure the strategy can be translated into innovation and the product stories are fully understood.

Marketing, supply chain and R&D scout for product development ideas across the business which fit the Avon brand. The marketing team then devises a creative brief based on this insight and outlines several different ways the R&D team could execute on the trend.

Avon then implements a stage gate process to manage innovation, which is co-run by marketing, R&D and supply chain. The process involves hitting various decision gates, including whether to ‘make or buy’ the product, a collaborative approach which has helped ramp up speed to market.

Avon head of R&D, Louise Scott, explains that this briefing step is critical as a lot of decisions are driven by marketing’s understanding of the brand, the product architecture and the overall vision.

When brands make claims and it turns out not to be true that ruins your brand and we’re too small a brand to take that impact.

Gabriella May, People Tree

Collaboration has become even more crucial as trends in the beauty industry can now last just a few months, meaning it is crucial to get product to market fast. For example, Avon tapped into the multi-billion dollar Korean beauty market by partnering with Korean innovation expert Bonne on K-Beauty, a range of face masks which went from idea to consumer in 20 weeks.

“We wanted to truly source authentic products from Korea. What is the point of calling it K-Beauty and then manufacturing it in Birmingham?” Scott asks.

“These are authentically Korean beauty products and therefore it’s a capability we need to source externally. That massively speeds up our ability to respond to a trend. You’ve got to respond to trends, but you’ve also got to make sure you’ve got products that have long term uptake with the consumer.”

Avon’s K-Beauty range produced with Korean supply chain partner Bonne.

Marketing also works with supply chain to ensure new products are presented to consumers using the language they understand. When developing Avon’s Essential Vitamin C serum, which launches in May, Scott’s team wanted to convey the fact the product contains market leading levels of active vitamin C.

“We didn’t have the language to know how to express that, so we worked with our marketing partners and devised the story of 30 oranges in a bottle,” she explains. “It is the equivalent of putting 30 oranges a month on your skin.”

This same level of close collaboration between marketing and supply chain helps drive decision making at Premier Foods. Every quarter the category business teams, led by a brand director, have a full-day visit to their respective manufacturing site where the operations teams sit.

During this visit they review the full business plan, discussing what they are trying to achieve with the category and the brand, the strategy, the vision and innovation programmes coming down the line.

Two and a half years ago, Premier Foods used this process to develop a convenient pot snack version of its Pasta ‘n’ Sauce product. The marketing team collaborated closely with the operations team to take the pot snack format from idea to market in just seven months.

“If we hadn’t had this very close-knit group that reviews the project and tries to find solutions to some of the challenges I don’t think we would been able to do it that quickly,” Erceyes adds.

He’s clear the company will do everything it can to maximise the relationship between marketing and operations as the company’s growth strategy rests on its ability to make its brands relevant to today’s consumers.