Abstract
This study sought to examine new marketing ethics (ME) practices that can foster strong moral grounding in the fashion and apparel retail firms to delineate a new approach within this industry. We built on the distributive justice and stakeholder orientation literature to conduct a multi-case study with 15 self-proclaimed ethical fashion and apparel retailers to identify whether and how they differ from traditional and fast fashion retailers. Several data collection techniques were used to gather the evidence (i.e., direct observation, physical and online interviews) combined with a netnographic approach (i.e., online observation of websites and social media content). Our findings show that these firms are guided by ethical-centered values, which are reflected in their product components, purpose, communication practices, and sourcing practices, which point to the emergence of a new business approach. We contribute to the macromarketing literature by identifying a new perspective on the role of morality in ME based on distributive justice principles and stakeholder orientation. We also propose a more refined definition of ethical fashion and apparel retailers.
Introduction
A new approach to business routines has emerged over the past years, in which firms who adopt socially responsible practices present themselves as “ethical firms” (Elg and Hultman 2016; Schramm-Klein, Morschett, and Swoboda 2015). Business ethics can be understood as a range of actual business practices that are anchored on moral principles, codes of conduct, and ethical standards to human actions (regarding right and wrong) that guide the behavior of firms or a businessperson in a market environment that is composed by different stakeholders (Hasnas 2020).
These practices are grounded on two fundamental ethical principles (Sternberg 2000): distributive justice, where those who contribute to the business aims should receive, in return, an appropriate share; and decency, which ensures that business processes are carried out in an honest way, legally, with fairness, and without any sort of physical violence or coercion (Radclyffe-Thomas and Roncha 2019). The moral principles connotate a firm's social responsibility regarding the way its actions influence society or groups of people, including the community, employees and consumers (Eagle, Dahl, and Low 2015).
Certain marketing practices continue to raise questions about the fairness of how the benefits and burdens of transactions are distributed among various stakeholders. In this context, it is important to examine the ethical dimensions of the market environment and its persistent fairness problem (Laczniak and Murphy 2008) and to empirically investigate multiple stakeholders in the same study (Ertekin and Atik 2020; Laczniak and Murphy 2019).
We seek to contribute to this gap by focusing on the distributive justice and stakeholder orientation in marketing ethics (ME) practices (Ferrell and Ferrell 2008; Laczniak and Murphy 2008) in the fashion and apparel industry. We argue, in line with calls from previous studies (e.g., Schramm-Klein, Morschett, and Swoboda 2015), that observing and understanding the movement of this industry toward a responsible and ethical approach can provide academics and other industries with fruitful lessons and insights on distributive justice in the marketplace.
Reduced transparency (Niinimäki et al. 2020) and asymmetric power relationships within the supply chain (Talay, Oxborrow, and Brindley 2020) are a consequence of the augmented complexity of this industry. Contemporary sourcing practices focus on lean and agile strategies to meet consumer pressure for constant and cost-effective purchases, which has led to increasingly precarious working conditions and unmet labor rights for factory workers in different tiers in the supply chain (Barnes and Lea-Greenwood 2006; Distelhorst, Hainmueller, and Locke 2017).
However, a growing number of retail companies have been making efforts to conduct their business in a self-proclaimed ethical way, while being mindful of their impact over their supply chains (Schramm-Klein, Morschett, and Swoboda 2015). The extant literature provides an elementary but not straightforward description of ethical fashion retailers (Han, Seo, and Ko 2017; Whysall 2008). A working definition to the term is “fashionable clothes that incorporate fair-trade principles with sweatshop-free labor conditions while not harming the environment or workers by using biodegradable and organic cotton” (Joergens 2006, p. 361).
Despite such advances, the literature on ME and retailing, specifically focused on the fashion and apparel themes, lacks a definition and conceptualization regarding business practices where ethical values are embedded throughout this industry's supply chain, especially when compared to dominant practices that led to decades of scandals in the industry (Han, Seo, and Ko 2017; Jonsson and Tolstoy 2014; Pretious and Love 2006). In addition, empirical investigations of the interconnectedness of distributive justice and stakeholder orientation, as well as analyses of ME at the macromarketing level considering stakeholders beyond employees, consumers, and shareholders are scarce in the literature (Ferrell and Ferrell 2008).
Given this backdrop, our aim in this paper is to examine new ME practices that can foster strong moral grounding in fashion and apparel retail firms to delineate a new business approach that contributes to the discussions about distributive justice and stakeholder orientation in the marketplace. With a set of anomalies that are evident in the traditional and fast fashion retail business approaches, this study considers ethical retail as a transformational approach for the fashion and apparel industry, which is evident through significant changes in organizational forms that respond to environmental challenges and shift how firms interact in the marketplace with their stakeholders.
Through a multi-case study with 15 firms, evidence was gathered by combining different data collection techniques (i.e., direct observation, physical and online interview, netnography through website, and social media observation), which delineated the emergence of what we present here as “ethical retailers.” We empirically analyze the main characteristics of the self-proclaimed ethical fashion retailers and compare them to the characteristics of the traditional retail and fast fashion retail business approaches.
Our study offers key contributions to the macromarketing, ME, and fashion retailing literature. First, we identify and qualify the main features of the self-proclaimed ethical fashion retailers and propose a new perspective on the role of morality in ME that is based on distributive justice and stakeholder orientation principles, which complements the perspectives that were previously identified by Crane (2000). We then provide a more refined definition of ethical fashion and apparel retailers by building on evidence that helps to delineate a new business approach in the fashion and apparel industry, based on distributive justice.
Theoretical Background
Marketing Ethics and Distributive Justice
ME can be understood as the systematic study of the way in which moral standards are applied in marketing decisions, behaviors, and institutions (Laczniak and Murphy 2019). Hence, it is a relevant part of social responsibility and should be investigated through a macromarketing-level approach (Ferrell and Ferrell 2008). ME encompasses “the practices that emphasize transparent, trustworthy, and responsible personal and/or organizational marketing policies and actions that exhibit integrity as well as fairness to consumers and other stakeholders” (Murphy, Laczniak, and Harris 2017, p. 5). This means that ME considers that every market exchange, regardless of where it takes place, will have an impact (be it extensive or unnoticeable) on society (Laczniak and Murphy 2006).
Not surprisingly, several firms continue to not only avoid ME practices but also evade following accepted norms to deal with their stakeholders. The fashion industry, for instance, has provided enough evidence (e.g., Primark and Shein – supply chain) putting pressure onto workers (Ertekin and Atik 2015; Jonsson and Tolstoy 2014) by sourcing most of manufacturing processes to lower-labor cost countries (Niinimäki et al. 2020). The recurrent problem that is presented by these firms seems to be the lack of strong of moral grounding (Laczniak and Murphy 2019), which can be identified through an unfair allocation of economic resources amongst different stakeholders (Crul and Zinkhan 2008; Klein 2008). To contribute to this discussion, Crane (2000) analyzed marketing practices from a morality standpoint and identified five moral perspectives, which are summarized on Table 1.
Moral perspectives identified in the ME literature.
Source: Adapted from Crane (2000).
The first perspective is fair play, which encompasses studies that provide normative assessments regarding ethical or unethical marketing practices according to moral rules. This approach mainly focuses on micromarketing practices and is based on judgments of how marketing is conducted. The second is the managerialist perspective, in which morality is seen as a consumer attribute. Studies that use this approach are focused on understanding green consumers’ attitudes and behavior from a micromarketing approach. The third is the reformist perspective, which considers not only customers but also other stakeholders. In this approach, the firm's morality has a strategic role in attending to stakeholder expectations and pressures. The fourth is the reconstructionist perspective, which considers macromarketing concerns on the interrelationship between marketing and society. Finally, studies that use the interpretist perspective seek to understand what morality means, and how it is experienced by managers and employees (Crane 2000).
In line with Crane (2000), and Laczniak and Murphy (2019), we argue that morality is central to the implementation of ME practices that contribute to solving the persistent fairness problem in the marketplace. From a macromarketing approach, we believe that morality is guided by a stakeholder orientation to embody “the notion that marketing organizations operate on behalf of society” (Laczniak and Murphy 2019, 2006, p. 167). This is what Laczniak and Murphy (2012) call the hard form of stakeholder theory, which represents an evolving shift of pattern due to its societal orientation. It presents, therefore, a “more ethically normative, macro and network focused” (Laczniak and Murphy 2012, p. 289) stakeholder orientation to ME, particularly because it considers the principle of distributive justice—guided by fairness of processes and outcomes—throughout the network of stakeholders (Ferrell and Ferrell 2008; Laczniak and Murphy 2008).
Distributive justice (DJ) has been advocated as a crucial ethical guideline for advances in ME practices (Ferrell and Ferrell 2008). In the ME context, “the distributive justice deals with how the market environment, in terms of its structure, policies, or practices, fairly apportions rewards and penalties among the various stakeholders affected by the market exchange process” (Laczniak and Murphy 2008, p. 5). DJ focuses on the fair allocation of products, resources, and other marketing outcomes among different stakeholders in society.
A key concern of DJ is focused on “whether members of the broad social system are receiving a just allocation of economic resources” (Crul and Zinkhan 2008, p. 12). Consequently, it is expected that organizations that take up DJ on a collaborative basis will benefit stakeholders and society (Ferrell and Ferrell 2008). Advances in DJ require from the firm an organizational culture that is driven by “values, behavioral norms and artifacts that establish a stakeholder orientation” (Ferrell and Ferrell 2008, p. 30). In this regard, marketing practices and processes are pivotal to the efficient distribution of resources because they are necessarily conducted in direct contact with a vast range of stakeholders, including those in the supply chain (Crul and Zinkhan 2008).
It is argued that stakeholders perceive fairness based on the distribution of the material gains from a transaction and that they will reciprocate according to these perceptions. If they perceive an outcome as fair, then they are likely to show positive reciprocity; and if they perceive it as unfair, then they will exhibit negative reciprocity until they understand ratios are equal (Bosse, Phillips, and Harrison 2009). Thus, perceptions of fairness are an important dimension of the relationship between the company and its stakeholders in the marketplace.
Previous studies on DJ have mainly focused on the employee (Bosse, Phillips, and Harrison 2009). However, fairness is an important aspect of all of the company's relationships, such as those with suppliers, customers, and communities. We argue that fairness toward multiple stakeholders may be identified as value driver in marketing practices and processes of some ethical retailers who have developed a business conduct based on ethically centered values and focus on the fair creation and distribution of value to their stakeholders.
Fashion and Apparel Retail Industry Business Approaches
The dynamics of the fashion and apparel industry have changed considerably over the past few decades (Frings 2013; McClendon 2019). Its operations have mainly worked around two business approaches that are not aligned with ME practices (Barnes and Lea-Greenwood 2006; Caro and Martínez-de-Albéniz 2015; Fletcher 2010) the traditional fashion industry and the fast fashion industry. In the 1990s, traditional fashion retailers often took up to 12 months lead-time to develop their product lines (McClendon 2019) because the fashion cycle was composed of “rigid and sequential phases separated over time by seasonality: collection's design, prototype, presentation to wholesalers, orders from wholesalers, production, delivery to wholesalers, shipping to retailers and final sale” (Arrigo 2018, p. 123). Consequently, the traditional approach presented a great economic risk for retailers in terms of unsold goods (Arrigo 2016).
With technological advances and the reduction in trade barriers, consumers started to demand faster access to fashion products at a low cost from retailers (Ertekin and Atik 2020; McClendon 2019; Varley and Pickard 2019). The pressure on clothing prices and the end of the Multi-Fibre Agreement (MFA) in 2005 are considered to be the main supply chain shift factors. This led large fashion retailers to outsource parts or all of their production to smaller companies located overseas, mainly in lower-labor-cost countries (Niinimäki et al. 2020), which opened international supply chains for fashion products (McClendon 2019; Perry and Towers 2013; Varley and Pickard 2019). This reduced their costs but in exchange they saw an increase in the complexity of their value chains (Christopher, Lowson, and Peck 2004).
With time, the fashion industry was able to offer artificial newness, disposable trends (Ertekin and Atik 2015), and planned obsolescence products (Gupta, Gwozdz, and Gentry 2019) “to mass consumers at affordable prices and at ever-increasing speed” (Ertekin and Atik 2020, p. 362). This means that the development and delivery processes of fashion products have shortened dramatically and “today, the key to product design, merchandizing, and sourcing success is contingent on the management of a quick response, speed to market, and speed to consumer” (McClendon 2019, p. 52). According to Mattila, King, and Ojala (2002), as supply chains grow longer and become more complex, and rely on poorly drawn long-term forecasts, fashion products need to be “pushed” towards consumers, and this misalignment adds inventory pressure on retailers, leading to discount sales, reduced profits and consumer dissatisfaction.
With these anomalies in the traditional business approaches becoming more frequent and widespread in the industry, this set of features started being related to what is now known as the fast fashion (Ertekin and Atik 2015, 2020; Niinimäki et al. 2020). In summary, it can be defined as a business approach that differs from the traditional because it combines quick response, frequent assortment changes, and low-cost fashionable clothing (Caro and Martínez-de-Albéniz 2015). Table 2 presents the main characteristics of these business approaches according to the literature.
Fashion and apparel retail prevailing business approaches.
Source: Authors.
These two business approaches have been adopted by different retailers with the evolution of business practices over the years, but they can also represent two distinguishing approaches for different lines of products within the same retailer, the traditional being used for more basic collections and the fast fashion used for producing items with a higher degree of fashion components (Caro and Martínez-de-Albéniz 2015). By analyzing the features of these two business approaches (see Table 2), it is evident the growing lack of ME practices specifically regarding distributive justice among this industry's stakeholders. While traditional retailers endured increasing pressure due to high inventory costs, fast fashion retailers transferred this pressure on to their suppliers, not only by pushing for shorter lead times and quicker deliveries but also by delegating activities such as quality control, packaging, tagging, and even creative processes toward suppliers (Barnes and Lea-Greenwood 2006). Some stages in the supply chain were eliminated to meet deadlines and deliver products as quickly as possible to the final consumers, such as product development and quality control (Barnes and Lea-Greenwood 2006; Čiarnienė and Vienažindienė 2014; Haug and Busch 2016).
While the fast fashion business approach emerged, there was also an increase in unethical practices, with many scandals and cases of precarious labor and contemporary slavery conditions. The utmost example is Rana Plaza's building collapse in Bangladesh in 2013 (Distelhorst, Hainmueller, and Locke 2017). As a result, the debate and pressure on the lack of strong moral grounding in this industry (Laczniak and Murphy 2019) and calls for following accepted business norms in dealing with stakeholders (Laczniak and Murphy 2019) have intensified.
The strategic place occupied by fashion retailers in the value chain (linking suppliers and consumers), as well as its power over suppliers (Talay, Oxborrow, and Brindley 2020), puts them in an advantageous position to change this scenario. Retailers are the last downstream firms within the supply chain, as they are responsible for offering fashion and apparel products to the final consumers (Louis, Lombart, and Durif 2019). Since 2010, the fashion market has witnessed the rise of companies announcing their commitment to sustainable issues through public environmental and social policy statements (Jacobs and Singhal 2017). It is becoming easier to identify established (e.g., Marks and Spencer, H&M, Vivienne Westwood) and specialist sustainable apparel brands (e.g., People Tree and Linda Loudermilk) that incorporate ethical features into their products (Goworek et al. 2020).
Several complex changes to traditional manufacturing and consumption practices are required to shift the ruling business approach in the fashion and apparel industry. For that, we argue that retailers should recalibrate their value chain and purchasing systems with the aim of establishing practices with its stakeholders grounded on DJ principles and informed by ethical values such as fairness, respect and transparency, (Ertekin and Atik 2020; Murphy, Laczniak, and Harris 2017).
Based on this review of the literature, we assume that ethical retailers in the fashion and apparel industry adopt stronger morally grounded practices and processes that are related to a new perspective on morality in ME, which considers different stakeholders and fair principles in the relationship between these different actors. We qualify this new approach to morality in ME by examining the new marketing practices that are adopted by the firms under investigation (i.e., ethical retailers). We explore the key business characteristics (see Table 2) of the self-proclaimed ethical firms and compare them to those of the two main business approaches (i.e., traditional and fast fashion, see Section 2.2) to understand how ethical firms may be fairer to their stakeholders.
Method
Given the need to advance the discussions of the ethical dimensions of marketing practices and processes (Laczniak and Murphy 2008), and to empirically investigate multiple stakeholders involved in the persistent fairness problem of the market environment (Ertekin and Atik 2020; Laczniak and Murphy 2019), we conducted a qualitative exploratory multi-case study, following Yin's (2010) recommendation for theory building in stages of assessing questions, propositions, and feasibility of research alternatives in the context of the contemporary phenomenon in real-life contexts. Semi-structured interviews with direct observations were matched with a netnographic approach, with an emphasis on online observation of websites and social media content. To study the differences between ethical retailers, and traditional and fast fashion retailers, and to investigate how these differences are related to DJ and stakeholder orientation, we selected a group of firms that are self-proclaimed ethical in their actions (who represent the ethical retailers).
The first set of firms was chosen by convenience and accessibility to the respondents, both physically and online. Firms with physical shops (Firms 1, 2, 6, 7, 8, 9, and 10) were visited by the first author between February 11, 2016, and March 9, 2016, in London (UK), and Paris and Bordeaux (France). The visits with direct observation lasted 30 to 60 min, and those with semi-structured interviews lasted up to 90 min. In addition to the physical shops, the first author contacted additional firms operating only with online shops. Amongst them, three opted to take part in our study, and responded to an online semi-structured interview, with 23 guiding questions, were added to the sample (Firms 3, 4, and 5). This group comprises the first 10 firms displayed in Table 3.
Case study firms and collection techniques applied.
Source: Authors.
DO: Direct Observation; PI: physical interview; OI: online interview; WO: website observation; SMO: social media observation.
a These firms sell a majority of own brand products and a minority of other firm's products (usually accessories).
A second set of firms was selected to increase the variability of the sample and the diversity of the data. We collected more evidence through an online search on websites and social media regarding the topic “ethical fashion.” We gathered specific netnographic social media content provided via the Instagram platform by creating an individual account to monitor information of over 70 fashion and apparel firms, using keywords related to the themes “ethical fashion” and “sustainable fashion,” and by evaluating the suggested accounts by the platform's algorithm. From this second group, five firms were chosen, which were those with higher frequency of content creation (which meant access to fresh new spontaneous and real-time evidence) and relevance to the observed phenomenon, in particular the brand's positioning as an ethical retailer, which justified the choice of the Firms 11, 12, 13, 14 and 15.
The final selection consists of a very diverse group (see Table 3) and the firms were kept anonymous to respect the confidentiality of the data. All of the 15 firms had either an online shop, social media content, or both, which were systematically visited between February 2016 and January 2017, and further revisited in 2022.
As part of the case study method, and to improve the validity of the findings, we conducted a triangulated approach to sourcing evidence (Patton 2002), in line with previous studies related to ethical fashion (e.g., Ertekin and Atik 2020). We combined different data collection techniques – that is, direct observation, physical and online interview (Adams 2015; Patton 2002), and netnographic approach (Heinonen and Medberg 2018; Kozinets 2010; Kozinets, Dolbec, and Earley 2014; Loureiro, Serra, and Guerreiro 2019) – through website and social media observation (see last column of Table 3) to analyze, with as much details as possible, fairness driven practices conducted by the retailers with different stakeholders.
To delineate a new business approach grounded on stronger morality values, we conducted the data analysis combining inductive and deductive approaches to coding. Data collected through physical and online interviews allowed the authors to address specific questions based on the literature review, such as how morality grounds the ME practices that were seen in the fieldwork, as well as to address some questions regarding the sourcing practices of each firm. Direct observation of the physical shops allowed further understanding of the products’ characteristics, and communication practices, and enabled us to see how the ethical retailers’ stakeholder orientations are different from the traditional and fast fashion ones.
From the first phase of data analysis, four categories of ME practices emerged – product, firm purpose, communication and sourcing practices (inductive code) – which brought in a new perspective to the features, variables and procedures that historically characterize the lack of strong moral grounding (Laczniak and Murphy 2019) of the retail fashion and apparel industry (from traditional and fast fashion retail business approaches, see Table 2).
The identification of the ME practices conducted by the analyzed firms, lead the researchers to further delve into DJ principles (Laczniak and Murphy 2008) and ethical values (Ertekin and Atik 2020; Murphy, Laczniak, and Harris 2017), which guided a complementary data gathering, only this time through online observation. The netnography approach, provided further details on how the firms operationalize ME practices (product, firm purpose, communication, and sourcing practices) with their customers and other stakeholders, and additional insights on the different aspects of their practices grounded on morality. We analyzed the data using a deductive approach and followed the recommendations of the literature (Kozinets 2010; Kozinets, Dolbec, and Earley 2014). The data was encoded according to the ethical marketing practices identified as categories in the first phase of the data analyses process. The codification consisted of four parts (1) identification of the firm; (2) identification of the data collection technique, either website observation (WO) or social media observation (SMO); (3) identification of the category of observation, that could be related to the product (PR), purpose (PU), communication (CO) or the sourcing practices (SP) of the firm; and (4) identification of the number of the observation in our database.
An illustration of how the codification worked follows: during the observation of Firm 13's online material, we have identified on their website two sections in which they communicate distinguishing features of their selection criteria, namely “Our Story” and “Our Materials” sections. We saved the image of these evidence on our database and to these claims we related the code for online observation: “Firm 13, WO-PR-1.” Table 4 below lists the codes used in the study.
Codification: Codes for Online Observation.
Fashion and apparel retail firms were grouped into three types of organizational arrangements (see Table 3), as follows: (a) manufacturing firms, who own the brand, manufacture parts or all of the production stages, and sell their own clothes but can also sell them through stockist firms; (b) brand firms, who own the brand but outsource the manufacturing steps; and (c) stockist firms, who do not have their own brand and only sell products from other firms, and are commonly referred in the market as such. These three types of firms may be physical, online, or both (as indicated in Table 3). Except for the own brand Firm 6 and the stockist Firm 7, all firms had a website with an option for consumers to buy their products online, even if they are brand firms who sell their products through stockists. The sample only included small and medium enterprises (SMEs)—four medium and 11 small firms in the group. The oldest firms have been in operation for more than 30 years and the most recent firms have been in operation for a little over 6 years. In January 2017, the group of firms had together around 562,000 followers on their Instagram accounts combined, and by March 2023 that number had grown to around 1,777,000 followers.
Findings: Characteristics of an Emerging Business Approach
We have observed in the studied firms the practices of what we call a new moral perspective in ME based on DJ principles and stakeholder orientation that can be categorized into four groups, as follows: product components, purpose of the firms, communication practices and sourcing practices (see Table 5).
Case study findings: ME key practices per firm.
Product
The first component of the new moral perspective in ME refers to the product. It is expected that the ethical retailer will offer products embracing social and environmental concerns “such as fair-trade manufacturing or fabric containing organically-grown raw material” (Goworek et al. 2012, p. 938). This means that the products offered by ethical retailers usually are made with specific fabrics that are carefully chosen to manufacture a product that can last for a longer period of time, while adopting eco-labels that aim to reduce environmental impacts by utilizing recycled, bio, or organic materials (Fletcher 2013; Niinimäki 2010). In addition, the ethical retailer makes an effort to involve local suppliers in the process of designing and manufacturing apparel (Ertekin and Atik 2020).
The features regarding product components range from products with higher quality of materials, workmanship, needlework, better fit, better durability, and even exclusiveness due to shorter collections or shorter and less frequent production runs. These are presented by nearly all of the firms in this case study, such as can be seen in Firm 13's manufacturing guidelines (Firm 13, WO-PR-1) and Firm 8's selection criteria, which its founder sums up as “For me it's about reigniting an appreciation of quality, craftsmanship and sustainability” (Firm 8, WO-PR-2). Firm 13 addresses better durability on its website, as can be seen in the following excerpt: “Having a sustainable product is very important to us. Our pieces are not made to last a season but are intended to be a part of your wardrobe for many years. That is why we perform several quality control tests on all new materials and styles for each season” (Firm 13, WO-PR-1). Embracing these practices build a stakeholder orientation that sets them apart from mainstream fashion and the practices commonly adopted in the fast fashion approach (Barnes and Lea-Greenwood 2006; Čiarnienė and Vienažindienė 2014; Haug and Busch 2016).
The way in which these retailers produce their products reinforce the recommendations from Murphy, Laczniak, and Harris (2017) regarding ME to sell and price products in accordance with the benefits received and refusing to sell unsafe product. All of Firm 1's products that were observed in their physical stores had an explanatory tag that promoted the higher quality of materials in their products, as can be seen in the following excerpt: “Engaged in the respect of nature and mankind, the brand favors the use of materials that are natural, organic, recycled and with low ecological impact.” This reinforces findings from previous studies (Fletcher 2013; Goworek et al. 2012; Niinimäki 2010). Firm 2 informs on their product tags that their brand is a result of a partnership of the founders, “Whose work focuses on different elements of sustainability including high quality handmade craftsmanship, locality, durability, recycling, natural dyes, fair trade, organic materials, individuality and transparency of production.” One product from Firm 14 had an explanatory tag with the following excerpt: “Traditional skills including hand weaving and hand embroidery craft skills are used to make this unique product.” In Firm 7, one of the products carried a tag with the following excerpt: “A natural, renewable and biodegradable fiber, British wool is renowned not only for its warmth and comfort, but also for its unique resilience and strength.” In Firm 8, one of its brands promoted their preference for timeless and harmonious design, and how their garments are made with good materials and natural fibers selected for their lasting characteristics on their product tag.
Another distinguishing feature of products from the self-proclaimed ethical retailers is the inclusion of production stages that have been previously dropped by traditional and fast fashion business approaches in the name of price-cutting, such as monitoring, auditing and quality control are common, seen particularly in firms who visit their suppliers and production partners. This is the case for Firm 13, which state on its website that “each season, several quality control tests are performed on all new styles” (Firm 13, WO-PR-3).
We identified in all firms in this group a growing trend of longer lead times, and also short and more personalized production runs, pointing towards a preference for quality products that take more time to be made and are made in smaller batches. This trend goes in the opposite direction of the movements observed in traditional and fast fashion supply-chain management (Barnes and Lea-Greenwood 2006; Čiarnienė and Vienažindienė 2014; Haug and Busch 2016; Jonsson and Tolstoy 2014), which signals a trade-off between quantity and quality of products. Some of these trends observed are practiced by the firms implicitly by making fewer announcements of new collections and replenishment of basic collections throughout the year, in comparison with previous business approaches. In other cases, firms explicitly manifest this practice. Firm 14 highlights on its website a great amount of effort and labor that goes into a handmade apparel product (Firm 14, WO-PR-4). Their design-to-sales process is closer to the traditional than the fast fashion approach, taking more than a year before their products are made available to customers, which is four months longer than contemporary fast fashion retailers.
When it comes to the topic of a higher price point seen in products marked as ethically sourced, the investigated firms expressed that the price difference comes from their commitment to delivering products of higher quality, that would last longer, with better sourced materials, or with more attention to the details during assembly and sewing. This is in line with the results of the literature review (Fletcher 2013; Goworek et al. 2012; Niinimäki 2010; Niinimäki et al. 2020). Once again, this behavior is seen as an opposite practice from the constant pressure on lower prices that is seen in the traditional and fast fashion business approaches (McClendon 2019; Varley and Pickard 2019) that unfairly burden stakeholders such as suppliers and communities (Ertekin and Atik 2015).
Purpose
The second component of the new moral perspective in ME relates to the purpose of the firms. Firms in this study choose to have a purpose that goes beyond economic performance and includes the commitment to social or environmental causes, either by giving back to the community or to organizations that support social and environmental issues, by developing projects in these areas of interests, or even by sourcing with social and environmental concerns, apart from purely economic concerns guiding their selection criteria. This alignment may stem from the firms’ commitment to DJ and decency in their actions (Radclyffe-Thomas and Roncha 2019) such as their aim to develop collaborative relationships with stakeholders (Talay, Oxborrow, and Brindley 2020) and being open with customers and other stakeholders (Murphy, Laczniak, and Harris 2017).
This behavior was explicitly manifested by Firm 2, which works with artisans from the Association for Craft Producers (ACP) in Kathmandu, a not-for-profit fair-trade organization certified by the World Fair Trade Organization (WFTO). Firms 6 and 14 also present a distributive justice driven purpose, identified by their practice of working closely with their manufacturing partners to ensure that they have adequate training so the workers can build viable businesses that can later sustain their communities. Firms 2, 6, and 14 evidenced the search for building relational mechanisms with suppliers to disseminate and engage with ethical practices (Perry and Towers 2013; Talay, Oxborrow, and Brindley 2020). From a different perspective, but also focused on disseminating and acting toward ethical values, Firm 11 promotes a thoughtful consumption drive so that every year the profits that result from Black Friday sales would go into an issue concerning one of the factories that they work with.
Considering that the predominant business approaches in the fashion and apparel industry are stained with unfair distribution of value among stakeholders, firms in this study distinguish themselves by having a value driven purpose grounded on fairness (Murphy, Laczniak, and Harris 2017). For example, Firm 5 presents the following reasoning on their website: “We are well aware of the reputation of the fashion industry and strive to promote positive change” (Firm 5, WO-PU-5). The fifteen firms that we investigated have declared they were either frustrated with the available choices of products and brands or were motivated by other factors to manufacture and/or market fashion products with ethical or sustainable characteristics. Interestingly, some of these firms were founded by inexperienced people in the fashion and apparel industry, which were somehow drawn to the ethical way of operating a retail firm. Aside from Firms 13 and 14, which are the oldest firms in this group, thirteen firms were founded after the year 2000, and eight were founded after 2010.
Not only is their business ethically driven but the purpose that inspired the creation of these businesses is also focused on the value that they create and distribute for multiple stakeholders, which relates to the fairness of how the benefits and burdens of transactions are distributed among various stakeholders (Laczniak and Murphy 2008). Firm 12 states on their website that their ultimate goal is “to make shopping sustainably easier.” As an online stockist, their way of delivering this goal is by curating a “selection of designers all working in fairer, safer and more inclusive ways” (Firm 12, WO-PU-6).
Communication
The third component identified as part of a new perspective in ME refers to communication with stakeholders. The studied firms develop communication practices that are both informative and educative for their stakeholders (Han, Seo, and Ko 2017). Transparency is an important value for stakeholders, as it allows them to learn not only about firms’ products but also the entire value chain operations. This practice is in line with the recommendations from ME researchers to provide accurate and complex information to consumers and other stakeholders (Murphy, Laczniak, and Harris 2017).
In contrast to firms in the previous fashion business approaches, these firms distribute intangible value to their stakeholders by being more transparent when developing their communication and stakeholder engagement strategies, which resonates with previous studies that highlight the importance of these practices (Lewis 2019). For example, Firm 14 regularly publishes the results of their biennial social review, in which they survey all of their stakeholders. In their 2019 review, they declared that 94% of the customers that responded to the survey agree or strongly agree that the brand “communicates to them, as a customer, honestly and transparently” (Firm 14, WO-CO-7).
Our empirical data shows that these firms used social media platforms not only to promote new products or advertise new sales but also to enhance their transparency toward their consumers, followers, and stakeholders in general. For instance, Firms 11 and 15 both use their social media accounts with frequency, hosting a “Transparency Tuesday” or a “Tuesday Q&A” at least once a month, where they make themselves available to answer through Instagram Stories videos questions made by their followers regarding the firm's factories, operations, new collections, and inspiration for products, among other aspects (Firm 11, SMO-CO-8; Firm 15, SMO-CO-9). Our empirical data has captured snapshots of Firm 11's Transparency Tuesday, which they have been hosting since before 2016. The following excerpt gives two of the firm's responses to questions from their audience regarding their transparency practices: “Where do you make your clothes?” – “Our global supply chain spans over 15 countries across 4 continents and supports more than 70,000 workers. Swipe up to learn more about what each of our factories create or check out the info on each individual product page”. “How are you ethically creating a crochet line?” – “The crochet pieces are made at our [name suppressed for anonymity] factory in Hong Kong. Made out of 100% Organic Cotton which is better for the soil and water, and it's safer for the workers.” (Firm 11, SMO-CO-8).
These efforts to increase the transparency of their operations through regular meetings may have a positive impact on stakeholders’ identify fairness on the firm's activities, which is a key dimension on the companies’ relationship to their stakeholders (Bosse, Phillips, and Harrison 2009), considering the Firms’ audience interaction with their social media accounts and feedback. The skepticism shown by some stakeholders over the declarations of the self-proclaimed ethical firms may be due to the gap between commitment and the actual implementation of changes, which are often harder to verify and control. The increased consumer and stakeholder pressure on companies may lead them to voluntarily commit to policies they have no clear intention to implement. Unless they find economic advantages, these commitments can be seen as a form of greenwashing (Ramus and Montiel 2005).
Another important value that is created by companies’ communication behavior to their stakeholders is education. Firm 8 uses its Instagram account for promotion and advertising, as well as communicating and engaging with their stakeholders on topics about the ethical characteristics of their brands. For example, Firm 8 on a snapshot emphasized the positive social impacts for consumers of buying a particular handmade product they sell (Firm 8, SMO-CO-10). Firm 9 has a section on their website that is solely dedicated to providing some educational content on the 13 most used materials on the products they sell, such as the following excerpt: Tarpaulin (recycled) – Some of our products are made from up-cycled lorry curtains that are being thrown out after thousands of miles on the road networks of Europe. This thick, waterproof material would otherwise end up in landfill and produces a unique look due to logo designs left on the material from its previous life. (Firm 9, WO-CO-11)
These findings stress the relevance of retailers’ education policies in promoting ethical values (Casais and Faria 2021) to different market stakeholders. The actions promoted by these firms enhance the authenticity of their stakeholder orientation (Joo, Miller, and Fink 2019) and are compatible with fashion consumers’ growing awareness regarding the impact of their consumption choices (De Klerk, Kearns, and Redwood 2019; Martenson 2018). Hence, the evidence shows that the self-proclaimed ethical retailers use moral driven values as a leverage to develop effective communication (Kong, Witmaier, and Ko 2021, p. 3) with the use of principles of distribute justice to convey their messages (Parguel, Benoît-Moreau, and Larceneux 2011), as they create and distribute more value to stakeholders that value transparency and fairness during transactions (Bosse, Phillips, and Harrison 2009).
Sourcing
The fourth component of the new moral perspective in ME refers to sourcing practices. The firms who participated in this study adopt behaviors that are described in the literature as fairer to stakeholders, such as sourcing materials and suppliers with international, national or sectorial certifications, asking for codes of conduct from their suppliers and having some type of monitoring and auditing (Pollin, Burns, and Heintz 2004; Turker and Altuntas 2014; Varley and Pickard 2019). Firms 3, 5, 13 and 14 work with suppliers who have certifications, such as OekoTex, SA8000, the European Network Association, the fair Wear Foundation, Made in England, Fair Trade and Organic. This finding highlights the importance of using certification in building a long-term relationship with suppliers in line with the statement provided by Interviewee from Firm 5:
Because we have such a great focus on sustainability, we only partner up with suppliers that share the same values; such as being OekoTex certified and member of the European Network Association, we check the wages, working standards and of course the general approach to a sustainable production throughout the supply chain regarding what materials are being used, how to deal with wastage etc.
Nevertheless, not all firms can allocate part of their revenues to get these certifications (Crals and Vereeck 2005). Firms 1, 2, 5 and 10 are not exclusively looking for certified suppliers to work with. For those sourcing partners without formal accreditation, these firms have either a thorough supplier selection criteria through some kind of ethical charter, or they maintain regular direct contact with their producers to help them adopt good working conditions. That is the case for Firms 1, 2, 4, 5, 11, 13 and 14, whose managers visit the factories more often and work toward building a long-term relationship with them. This is reinforced by an interviewee from Firm 2: Our suppliers must either have accredited fair trade or living wage working conditions or in the case of very small organizations where this would be impractical, they must have regular direct contact with the producers or manufacturers themselves and feel confident that similar conditions to fair trade are being met.
These efforts to translate ethical guidelines into policies and actions lead to a fairer allocation of organizational resources amongst different stakeholder and may indicate the importance of distributional justice into business practices (Crul and Zinkhan 2008). Some of these firms work in partnership with their suppliers to help them reach the required standards. These partnerships show a tendency for a shift in the relationship between retailers and suppliers from control and monitoring to trust and collaboration (Murphy, Laczniak, and Harris 2017). For example, according to an interviewee from Firm 4: Our factories are audited for health, safety and ethical standards. We audit the smaller factories ourselves through questionnaires and site visits. The bigger ones are independently audited by licensed organizations. If any problems arise during the audit, we put a plan together to solve the issues.
Some firms go well beyond their legal responsibilities and demonstrate fairness throughout their subcontracting factory workers (Calabretta, Durisin, and Ogliengo 2011; Louis, Lombart, and Durif 2019; Schramm-Klein, Morschett, and Swoboda 2015). For example, Firm 6 offers to their workers in Cambodia labor conditions that are hardly found even in developed countries: payment above local market prices, with overtime paid or recovered, productivity bonuses rewarding periods of high activity, five weeks of annual leave, housing is offered to employees, and help is offered to cover medical expenses in case of accidents of illnesses (Firm 6, WO-SP-13).
Another result of this relationship building dynamic, with DJ principles promoted by focal firms, is a reduction of pressure points and conflicts in the supply chain, in contrast with what is seen in the traditional and fast fashion business approaches (Barnes and Lea-Greenwood 2006; Čiarnienė and Vienažindienė 2014). Firm 11 affirms on their website that they have passed the time pressure from their suppliers to their design team, which “works in rapid iteration, quickly executing from idea to final sample, launching to market in less than six months” (Firm 11, WO-SP-14).
Ethical sourcing was mentioned by some of the firms in this case study and is seen as crucial in identifying what is ethical fashion. Firm 1 understands that ethical sourcing should be a mix composed of three aspects: sourcing ethical fabrics, which is both determined by origin and composition of the materials; social conditions of the workers and suppliers contracted; and the environmental policy that they enforce on the SP. Firm 2 agrees on the social aspects, defending that it is a sourcing that provides a living wage that allows for supportive, democratic, and working conditions for suppliers. Concerning the environmental aspects, Firm 2's representative told us that:
Ethical sourcing also means choosing materials with as little negative environmental impact as possible and supporting those suppliers looking to develop environmentally friendly practices, such as waste treatment, low impact dyes, organic or low chemical fibers and animal products which use farming practices with that are as ecologically sound as possible.
These sourcing procedures illustrate marketing practices that deal with the problem of power asymmetry in the relationships between buyers and suppliers within the fashion and apparel supply chain (Talay, Oxborrow, and Brindley 2020) and concerns regarding the environment (Niinimäki et al. 2020).
In Figure 1 we present a summary of the study's findings, highlighting the marketing ethics practices grounded on distributive justice principles and fairness as value driver that are conducted by the ethical retailers with each group of different stakeholders.

Marketing Ethical practices grounded on distributive justice principles.
Discussion
Our analysis shows that the characteristics observed in the empirical findings dissonate when compared with previous features of the business approaches described in the literature. A key contribution of this article toward delineating a new emerging business approach is a specification of the concrete practices and processes that substantiate the idea of DJ and contribute to the discussions on ME. Table 6 lists the themes that we have identified as evidence of what constitutes an ethical retailer in this multi-case study.
Comparison between literature and case study findings: Features per business approach.
Source: Authors.
The most distinguishing factor between traditional and fast fashion retailers and our group of ethical retailers is that the latter create and distribute more value to their stakeholders. Their decisions regarding which factory to close a deal with allegedly encompass the factory's compliance with labor regulations. They claim to value whether the workers have living wages or enough time to finish the orders, and to worry whether their workers are getting to work and home safely. They claim to focus on working with the right type of raw materials and promoting healthy and safe environments in their factories. They offer training and invest in capacity building for their suppliers. They showcase products of artisans in special places in their store and tell their customers the artisans’ stories. All of these parameters may influence the price level they are willing to deliver to customers, the deadlines agreed with suppliers, which materials they are going to the source, all of which may determine the firm's production function at a different value category in comparison with traditional and fast fashion firms.
Thus, the self-proclaimed ethical firms investigated here were created with a perceived stronger moral grounding reflected in the products, purpose, communication, and sourcing practices, which provide evidence for a new perspective on the role of morality in ME guided by distributive justice principles. This effort to be fairer in the creation and distribution of value may be crucial for their long-term success in improving their relationship with stakeholders (Ramus and Montiel 2005), considering that fairness is woven into the business and is not just a result of external pressure (Ferrell and Ferrell 2008). These firms claim to actively work toward the strengthening of their supply chains. This proposition, based on the perception of a stronger moral grounding, is a result of a logical deduction, once their suppliers also comply with ethical standards through certification, compliance to codes of conduct, or simply gradual implementation of values supported by a focal firm.
We have presented empirical evidence of focal firms with marketing ethical practices that claim to produce more sustainable products, actively participate in the communities where they operate and improve working conditions. Nevertheless, to analyze this observation, two factors must be taken into consideration: the level of scrutiny has risen over traditional and fast fashion retailers, and the level of operation from these firms is usually much higher than from these smaller ethical retailers. Thus, when working with this observation, researchers could make use of comparison techniques that consider stakeholder orientation relative to the level of operation, revenue, international presence, and other such parameters.
An important distinguishing trait in this group is that all 15 firms were born from individuals who were somehow unsatisfied with current traditional and fast fashion business approaches. This motivation prompted even the most inexperienced people from different sectors to become entrepreneurs in an ethical fashion business. Thus, from this empirical evidence, we propose a third way through which firms can introduce fair practices, other than by private and public means of enforcement – fashion and apparel retail firms stem away from fast fashion core elements that induce precarious labor on the supply chain and turn instead to innovative ways of doing business.
When looking to the origins of these firms, and the decisions that they have taken throughout the course of their growth, we can identify some of the intrinsic characteristics that are related to their ethical practices. Some of these firms have emerged in a context with no previous public or private regulation, and who have participated actively toward the creation of public regulations and enforcement characteristics. Other firms were even created in situations when incentives were negative toward ethical practices. Hence, these real differences may result not only from effective enforcement of public regulations, or because firms implemented private written requirements, but also because firms internally changed their incentives to comply by valuing moral grounded practices in a different (or inexistent) manner than other firms.
The evidence gathered provides more details on the ME practices, organizational culture, values, behavioral norms, and artifacts required from firms to establish a stakeholder orientation based on DJ (Ferrell and Ferrell 2008), and grounds the addition of a new moral perspective of marketing practices from a morality standpoint. In addition to the fair play, managerialist, reformist, reconstructionist, and interpretist perspectives – previously presented by Crane (2000) – we propose the DJ perspective and elucidate its main issues, core discipline, the form of morality and the subject of morality, as described in Table 7.
Moral perspective identified in the new business approach.
Source: Authors.
Final Remarks
The historical occurrence of precarious labor conditions that are regularly seen in the fashion and apparel industry, along with its considerable and widespread environmental impact (Ertekin and Atik 2020, 2015; Gupta, Gwozdz, and Gentry 2019; Niinimäki et al. 2020) and persistent fairness problem (Laczniak and Murphy 2008) have motivated this study. These problems encompass a range of fashion retailers practices grounded on weak (or inexistent) moral principles (Laczniak and Murphy 2019) and lack of fairness with its different stakeholders, both related to social matters – (poor working settings, low wages, long working hours, child labor and contemporary forms of slavery (Bales and Robbins 2001; Betti 2016; Kalleberg 2009) – and environmental ones – damage caused by this industry (Niinimäki et al. 2020; Seuring and Müller 2008). Given this background, our study aimed at examining marketing practices conducted by the self-proclaimed ethical fashion retailer grounded on principles of distributive justice and stakeholder orientation to delineate a new approach within this industry.
To achieve our research aim, we built on distributive justice and stakeholder orientation principles and carried out a multi-case study with 15 self-proclaimed ethical fashion and apparel retailers, combining different data collection techniques. By having done that, we identified how firms that value morality in their business conduct differ from traditional and fast fashion retailers.
Based on our findings, the study contributes to the macromarketing (Ferrell and Ferrell 2008) literature by proposing a new perspective on the role of morality in ME grounded on distributive justice principles and stakeholder orientation, thus, adding to the perspectives previously identified by Crane (2000). Among the firms investigated, we have identified ME practices with different stakeholders, driven by fairness as value driver; what led us to delineate a new moral approach to ME practices that we call the distributive justice perspective.
By focusing on this a new perspective on the role of morality in ME, we were able to revisit the definition of ethical fashion and apparel retailers. Our findings showed that more than just reacting to external pressures and complying with existing institutional frameworks, the ethical retailer seeks to decouple from ruling industry practices through ethical practices driven by fairness values. The refined definition is as follows:
An ethical fashion and apparel retailer is a firm that complies with the law and goes beyond legal minimums toward environmental and social practices to build a lasting relationship with its stakeholders, engaging with different actions to implement, disseminate, and convey ethical standards. These firms excel to conduct their business based on distributive justice conduct and are guided by fairness as value driver reflected in their marketing ethics practices, namely: product components, purpose, communication and sourcing practices.
Hence, our study contributes to the macromarketing, ME, and fashion retailing literature and addresses recent calls to empirically examine the ethical dimensions of the market environment and the fair distribution of value to stakeholders (Ertekin and Atik 2020; Laczniak and Murphy 2008, 2019; Schramm-Klein, Morschett, and Swoboda 2015). We applied distributive justice principles (Laczniak and Murphy 2008) and examined the features, variables and procedures that historically characterize the lack of strong moral grounding (Laczniak and Murphy 2019) of the retail fashion and apparel industry. By doing so, we were able to identify and qualify ME practices (Murphy, Laczniak, and Harris 2017) conducted by self-proclaimed fashion ethical retailers with its stakeholders, thus, embracing a macromarketing-level approach (Ferrell and Ferrell 2008) grounded on fairness.
Moreover, the group of firms that we have analyzed is mostly composed of SMEs, a group that has been marginalized in ethical marketing literature and has a significant role to play in contributions to theory building (Spence 2016), especially considering its importance in industries dominated by multinational corporations (MNCs), such as the fashion and apparel.
Our study also provides practical implications. First, the ME practices identified in this study can serve as guidelines for firms and marketers that are conscious of their role in society and are willing to embed their marketing practices in line with the new approach here proposed. By adding ethical concerns to a firm's marketing activities and considering the impacts its actions have on stakeholders (Calabretta, Durisin, and Ogliengo 2011), the firm and its marketers can better distribute the value created among the various stakeholders affected by its activities (Bosse, Phillips, and Harrison 2009). Our findings suggest that when considering the DJ perspective to morality, marketers and firms must conduct their relationship with different stakeholders grounded on ethical values – such as fairness, respect, and transparency, more specifically (Ertekin and Atik 2020; Murphy, Laczniak, and Harris 2017) – and they could implement the marketing practices here identified on our empirical cases that are reflected in product, purpose, communication and sourcing practices.
In addition, our study shows that collaborative relationships within different businesses in the fashion and apparel industry are pivotal as they can develop several supporting relational mechanisms for the incorporation of ethical practices throughout the supply chain (Talay, Oxborrow, and Brindley 2020). Moreover, it can provide public institutions with valuable information to shape new policies and propose ethical-driven trade legislation.
Despite its contributions, our study presents limitations. The study has identified and qualified the characteristics of ethical retailers (Table 5); however, it does not have a conclusive purpose. Each ME practice identified should be explored and tested using different methodological approaches. Another limitation of the study is that we only collected data with firms (the self-proclaimed ethical retailer); we recommend future studies to investigate the perception of other stakeholders (consumers and/or suppliers) towards the ME practices of the ethical retailers. In addition, this study did not collect any evidence regarding the impact of specific public regulations and enforcement on a firm's process to have fair labor conditions or to become an ethical retailer. This issue has recently been raised for further attention by scholars (Casais and Faria 2021). Many studies can be suggested to complement our analysis, such as comparative studies, between firms considered ethical and not, and longitudinal studies, analyzing the historical evolution of the so-called ethical retailer and its interplay with other agents within fashion industry macromarketing.
Our findings have identified the lack of ethical indicators for small retailers in the fashion and apparel industry. Scholars could investigate traceability efforts despite the lack of adhesion to sustainability certifications by SMEs (Crals and Vereeck 2005). Moreover, the investigation of indicators could help the operationalization of concrete DJ practices and processes, and the possible spillover effects on the practices from SMEs to MNCs and vice-versa.
Another stream of investigation that we recommend is to study the educational role played by ethical fashion firms toward ethical consumption (Han, Seo, and Ko 2017), considering the predicted importance of ethical consumerism to the development of ethical retailing (Mahoney 1994) and to what extent this behavior can have an impact on other stakeholders. Finally, marketing scholars could investigate the impact of efforts made by different macromarketing agents (civil society and its diverse institutions) on firm's adoption of ethical standards (Ertekin and Atik 2020), taking (for instance) the fashion revolution movement as a case study.
Footnotes
Associate Editor
Pierre McDonagh
Declaration of Conflicting Interests
The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.
Funding
The author(s) disclosed receipt of the following financial support forthe research, authorship, and/or publication of this article: Brazilian Federal Agency for Support and Evaluation of Graduate Education (CAPES).
