The inspi(RED) new face of cause-related marketing

Product (RED) is the new face of cause-related marketing, turning fashion conscious consumers into activists and showcasing a new model for strategic philanthropy and responsible business. Gap is one business championing the (RED) way of thinking. Once the poster child of the anti-sweatshop campaign, US clothing chain Gap ended 2006 as an ethical champion. From talk-show host Oprah Winfrey’s live shopping spree in a downtown Chicago Gap store, to (RED) Gap T-Shirts gracing billboards across the country – the campaign is everywhere.

Instead of child labour accusations, the Gap (RED) range is celebrated for channeling funds to the Global Fund to Fight AIDS, Tuberculosis and Malaria. Instead of boycotting Gap, former anti-globalisation protestors are praising the chain’s investment in new African suppliers.

Essentially Gap is doing what it does best: designing and sourcing a simple, high quality product and then marketing it as a stylish wardrobe essential. “The product is right and desirable, and it’s backed up with strong, powerful, impactful marketing” says Dan Henkle, senior vice president, Corporate Responsibility at Gap.

But (RED) is about much more than cause-related marketing on a grand scale. It certainly fits with the typical American approach to corporate responsibility: develop the market, ‘sell more stuff’, and then ‘give back’ with a donation. Yet it also turns consumers into activists – a route not normally followed by corporate America. (RED) aims to raise awareness about the AIDS pandemic and put pressure on governments to increase their own donations.

This isn’t going to happen overnight. Gap and the other four (RED) global brands (American Express, Armani, Apple and Converse) have signed up to a 5-year commitment to promote and market the campaign. They also agree to a fee for using the brand, which is owned by Bono and whose team approves all marketing and advertising for the branded products. No wonder it reportedly took years to negotiate corporate participation.

But it seems to be worth it: (RED) has surpassed Gap’s expectations. “Consumers like the products and they like the project,” says Henkle. “And Gap employees are inspired and motivated by our involvement.”

Is the campaign really making a difference? I visited the (RED) website to calculate the impact of buying a bracelet and T-shirt. My purchase provided 50 single-dose nevirapine treatments for mother and baby, to prevent the transmission of HIV from mother to child.

That’s just the philanthropy part. Some of Gap’s (RED) products are sourced from Africa: T-shirts are made in Lesotho by a contractor that employs 4,500 people. Here, Gap does not know how much of the revenue that isn’t channelled to the Global Fund (effectively the other half of the retail price) is returned to the suppliers in Africa, Henkle says. But it’s certainly a crucial investment that goes against current global sourcing trends.

Until January 2005, World Trade Organization quotas were in place to restrict textile exports from India and China. Since they ended it has become even cheaper and easier to source textiles from Asia than from Africa. Add to this the infrastructure and governance challenges in Africa, plus the impacts of disease and it becomes clear why so little sourcing comes from the region.

It’s here that the business case and social responsibility overlap. Henkle explains how all aspects of Gap’s CSR programme come together around the factory in Lesotho. It starts with a robust and transparent system of factory monitoring to make sure standards are upheld. The next layer is around developing management skills within the factories, followed by addressing the social issues in the surrounding communities. The final layer is looking for longer-term solutions.

Looking forward, a new line of (RED) products is launching in February. If consumers aren’t impressed, funds won’t flow to the Global Fund, and local investment is likely to slow. While such risk is just a market reality, it is accentuated by the ‘special product’ approach of (RED). The more sustainable solution is to explore how, throughout the supply chain, more value – including wealth, training and innovation – can be invested, empowering suppliers to compete in the global market. But if the products do sell, local investment is boosted and if global trade rules are kind, (RED) has the chance to make a real difference to the lives of those it sets out to help. Meanwhile it’s raising the bar on how companies use their skills and markets to drive change – that’s inspi(RED).

Michelle Dow is a consultant at The Corporate Citizenship Company and heads the New York office.