Virtual Consumer May-Jun 2010

Is there an 'e' in ethical?

Virtual Consumer column from Ethical Consumer magazine May-Jun 2010

For someone who has been working with computers for as long as I have (let’s not go into the detail of exactly how long that is) one of the most astonishing things about the net is the power of Google. The breadth of information that you can search is impressive of course, although we were confidently predicting years ago that the contents of the British Museum Library would one day be available on line (it isn’t yet but there is an even greater quantity of information that is). What is truly awe inspiring however is the ability to search through that information for keywords and phrases in a fraction of a second.

Fast search has had a dramatic, and unforeseen influence on the development of e-commerce because of the ultra-competitive marketplace it creates. There is a nostrum in the on-line retailing world that says that only two offers can really succeed on the net: the cheapest, and the best. The thinking is: why would anyone pay more than the lowest price, unless it was to get a better product? This is an over simplification however. To the ‘cheapest’ and the ‘best’ you might add the ‘trustworthy’ and the ‘only’. It’s worth asking whether you could also add the ‘ethical’.

The success of ‘only’ was predicted by Chris Anderson in his much-quoted article “The Long Tail” (Wired Magazine, 2004). Anderson pointed out that the power of search and the reach of the net can make it worthwhile selling things on line that only appeal to a very small part of the population and would not justify shelf space in an ordinary high street store. A classic example is a book that only sells a few thousand copies worldwide but can nevertheless be stocked in an Amazon warehouse and sold profitably.

The success of ‘trustworthy’ is also demonstrated by Amazon, now the first place many people will look for a book or a CD because they trust Amazon to have it in stock and deliver on time, whether or not it is the cheapest source. Another example is John Lewis, which does not claim ‘never knowingly undersold’ for its on-line service but has become one of the most successful e-commerce operations in the UK. Again this is down to trust.

What about ‘ethical’? Is there a new opportunity for ethical products and services to do better on line than they have through conventional channels?

One reason why the answer could be yes is that buying ethically is about an informed choice. The net offers an opportunity for people to find out quickly just how ethical a product is, or to choose only ethical products from a wider range. In most cases however, the manufacturer or provider of an ethical product or service will be keen to label it as such.

Another possibility is where the ethical alternative is not widely known or available. An on-line source for fair trade coffee will end up competing on price with the big multiples that also sell fair trade coffee; but ultra-green PCs can succeed when sold online even though they are still very much a niche product.

A third opportunity is the one-stop shop for all things ethical: a site where you can get all your shopping done without having to complete multiple transactions and be confident that you have made the ethical choice. This is the idea behind Ethicalsuperstore.com. It will be interesting to see whether other on-line and ethical traders see a similar opportunity.