Supply Chain

Canadians Rethinking Brand Choices Following Bangladesh Factory Collapse

Following the Rana Plaza collapse in Dhaka, Bangladesh in April that claimed the lives of 1,127 workers, DIG360 Consulting Ltd. commissioned a survey, powered by Asking Canadians, to ask Canadians about their awareness of the incident, their perceptions around Canadian retailers sourcing overseas and, specifically, their attitudes about Canadian fashion brand Joe Fresh.

By David Ian | Published 11 years ago | About a 3 minute read

According to the results of the survey, this story has made an indelible impact on Canadians. Eighty‐seven percent of Canadians were aware of the Bangladesh factory tragedy. Of these, almost half (43 percent) reported that the incident has led them to think about their shopping choices.

The building that collapsed featured several garment factories supplying global retail chains, including Loblaws, Joe Fresh and the US‐based Children’s Place clothing store chain, which operates throughout Canada. The majority of Canadians link Joe Fresh with this event; 69 percent identified the brand from a list of retailers supplied by this factory. By comparison, just 6 percent correctly connected Children’s Place to this source of product. And among Joe Fresh’s existing shoppers, a strong minority of 26 percent suggested they will no longer purchase from that chain.

Many of these could end up returning, due to the contrast between the easy evaluation of a competitive price and the complex, often confusing evaluation as to how much more one product or store is ‘ethical’ (or green) compared to others.

Loblaws and Joe Fresh were smart to quickly and decisively gather leading fashion retailers to discuss the situation as an industry. This enabled them to reposition the incident as a symptom of a complex sector‐wide challenge. While a quarter of Canadians (26 percent) felt Joe Fresh should bear responsibility, this was slightly less than the 31 percent of those previously unaware of the incident.

For a time, putting on a Joe Fresh T‐shirt might remind one of a reason to feel bad about buying the brand. Yet the company recognized that a negative brand image can be damaging if left to fester bringing together the industry to share the spotlight.

But the brand is not off the hook; the DIG360 research confirms consumers are putting them on watch. This sets the scene for an activist campaign to do damage if the brand missteps again and becomes a target.

The survey also found that 74 percent of Canadians believe responsibility should be placed outside of Joe Fresh, and that this story reflects a broader challenge in global supply. Notably, those who were aware of the tragedy seemed to grasp the complexities inherent in extended supply chains and were more likely to place blame on shopper choices and overseas owners.

Two questions yielded near‐unanimity: Almost all (92 percent) said they expect stores both to offer cheap items and to ensure workers are not exploited. And 93 percent agreed that Canadian retailers have an opportunity to play a positive role in improving working conditions in other countries, confirming that shoppers expect retailers to improve in these areas, even as they refuse to sacrifice their desire for inexpensive product.

The public image winners seem to be independent, local retailers; 81 percent of those who are aware of the collapse feel independents are more trustworthy than larger chains. By contrast, only 69 percent of those not aware of the incident shared this view.