Corporate Social Responsibility in the global
fast fashion industry
Examining the effect of consumer awareness of CSR practices on
consumer purchasing behavior at H&M and Zara
Master thesis (repair)
By
Tamara Dvorak
MSc International Business and Management Student number: 3070042
E-mail: j.e.t.dvorak@student.rug.nl
Supervisor: Dr. R. W. de Vries Co-Assessor: Dr. D.H.M. Akkermans
Word count: 15.860 words
2 Abstract
Purpose – This study aims to contribute to existing literature about the effect of CSR on
consumer purchasing behavior by focusing on the fast fashion industry. The effect of consumer awareness of CSR activities on consumer purchasing behavior at H&M and Zara, as the two leading fast fashion retailers has been under investigation.
Design/ methodology/ approach – The empirical part of this study consists of an online
survey that was completed by 151 consumers of fast fashion. The survey measured consumer awareness of H&M’s and Zara’s CSR practices and their respective purchasing behavior. The obtained data has been analyzed by performing correlation and regression analyses in SPSS.
Findings – The findings reveal that consumer awareness of H&M’s CSR practices leads to a
higher purchasing behavior. This indicates that CSR can be regarded as one factor influencing the purchase decision at H&M. However, this significant positive relation is not found for Zara shoppers.
Research limitations/ implications – The sample size is rather small to generalize the
findings. The survey instrument does not include open questions that might provide more accurate information about consumer attitudes and purchasing behavior.
Practical implications – Practitioners should increase their communication of their CSR
activities in order to create more awareness among consumers which might result in higher purchasing behavior.
Originality/ value – This research provides insight into the purchasing behavior of H&M and
Zara consumers. In particular, the literature about H&M and its practices is fairly scarce.
Keywords Corporate Social Responsibility, fast fashion, consumer purchasing behavior,
3 Acknowledgements
In the first place, I would like to express my gratitude to my supervisor, Dr. R. W. de Vries, for the guidance, patience and the valuable feedback and advice throughout the entire process of this thesis.
I would also especially like to thank my whole family for their love, constant emotional support and their encouragement that I can overcome all hurdles with faith and stamina. Furthermore, I would like to thank the girls that made this Master program as enjoyable and pleasant as it was – Ines, Regina and Judith. Thank you for always being there for me, making me laugh in times of struggles and motivating me to bring out the best of me.
4 Table of Content Abstract………..2 Acknowledgements………3 1. Introduction………...5 2. Theoretical Background….……….……...7
2.1. The concept of fast fashion.………7
2.2. CSR and its practices……….….8
2.2.1. CSR in the fast fashion industry………...10
2.2.1.1. Ethical sourcing………11
2.2.1.2. Environmental programs………..11
2.3. Consumer purchasing behavior………..……..12
2.4. Consumer awareness………....13
2.5. Conceptual framework and hypotheses………...15
3. Methodology……….17
3.1. The selection of H&M and Zara………..17
3.1.1. H&M……….17
3.1.2. Zara………...19
3.1.3. Corporate Social Performance of H&M and Zara………....19
3.2. Data collection………...20
3.2.1. Sample selection………..22
3.2.2. Constructs and measurements……….22
3.3. Data analysis………25
4. Results………...27
5. Discussion………...33
5.1. Managerial implications…….………...35
5.2. Limitations and future research………...36
6. Conclusion………..…..38
References……….……...40
5 1. Introduction
According to the Institute for Global Labour and Human Rights, the collapse of the Rana Plaza building in Bangladesh is considered as one of the “deadliest disasters in the history of the garment industry worldwide”(Institute for global labour and human rights, 2014). 1,137 factory workers lost their life due to the collapse of the poorly constructed factory building. This disaster constitutes a good example that fortified the attention towards Corporate Social Responsibility (CSR). As today’s society became more aware and concerned about the environment, many companies shift their operations and activities towards more sustainable products. With enhanced media coverage, companies are making their social activities more visible and communicate their initiatives to the consumers (Matute-vallejo & Bravo, 2011). Companies include CSR practices such as ethical sourcing, corporate philanthropy, cause-related marketing, or socially responsible employment in order to sustain their legitimacy in the market (Schramm-klein, Zentes, Steinmann, Swoboda, & Morschett, 2016).
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retailers like H&M or Zara emerged helping to foster these rapidly changing demands through changed business models (Mehrjoo & Pasek, 2014). Due to its global supply chain and its complexity, the fashion industry is more susceptible to CSR issues. Hence, this industry appropriately suits the underlying research setting.
In the literature, CSR has primarily been treated from a corporate and managerial perspective (Öberseder, Schlegelmilch, & Murphy, 2013; Schramm-klein et al., 2016). There has been considerable research investigating the impact of CSR on a company’s financial performance and competitive advantage. Yet, management also needs to consider multiple stakeholders’ expectations of CSR, aside from the company and its investors. Consumers are fundamental stakeholders that play a vital role in marketing (Schramm-klein et al., 2016). Thus, this inquiry will adopt a consumer perspective on CSR.
This study seeks to enrich and extend prior research on the effectiveness of CSR practices by focusing on the consumers and their purchasing behavior. It will investigate the effect of CSR practices on consumer purchasing behavior in the fast fashion industry. There are several CSR practices in literature that companies integrate into their activities in order to achieve more sustainability. Yet, there has been little research if those CSR practices influence a customer’s buying decision. As a boundary of this research, the fashion industry has been selected for investigation based on the rise of fast fashion retailers. H&M and Zara as the pioneers of the fast fashion concept will be analyzed. Consumers in that industry are rapidly changing their demands and purchase products massively and rapidly. The question at hand is if those customers’ purchasing decision is influenced by CSR practices. The effect of consumer awareness of CSR practices on consumer purchasing behavior will be explored. Hence, the research question under investigation is:
Does consumer awareness of CSR activities influence consumer purchasing behavior at the fast fashion retailers H&M and Zara?
As literature on CSR practices in the global fast fashion industry is still at an early stage, this research will contribute by investigating if consumers that are aware of H&M’s and Zara’s CSR engagement will be more likely to purchase at those two fast fashion retailers. For practitioners in the fashion industry this research might add value as the consumer is one of the major stakeholders in the industry and hence, it is vital that businesses gain an
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increasingly invest in their CSR practices, insights about the relevance of those practices from a consumer perspective will be of added value.
The remainder of this thesis is organized as follows: Chapter 2 reviews existing literature regarding the field of research. The literature review involves the following subjects: the concept of fast fashion, CSR practices, consumer purchasing behavior and consumer awareness. This section ends with the presentation of the conceptual framework and the hypotheses of this study. In Chapter 3, the methodology including the data collection in form of an online survey and the data analysis is outlined. The results of the data analysis are elaborated in Chapter 4. In Chapter 5, the thesis concludes with a discussion, limitations and suggestions for future research.
2. Theoretical Background
2.1. The concept of fast fashion
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identified as encouraging a throwaway mentality (Morgan & Birtwistle, 2009; Watson & Yan, 2013). In Watson & Yan’s (2013) study, the findings revealed that several participants dispose fashion items before its life cycle has even ended. And retailers offer fashion items that are designed to be worn less than 10 times (Mcneill & Moore, 2015).
2.2. CSR and its practices
The concept of corporate social responsibility (CSR) is a widely discussed phenomenon in literature (Lueg et al., 2015; Mann, Hyejeong, & Hoggle, 2014; Öberseder et al., 2013; Schramm-klein et al., 2016). Although scholars provide several definitions of CSR, there is yet no unified definition obtainable (Öberseder et al., 2013; Schramm-klein et al., 2016). Diddi & Niehm (2016) define CSR as “an organization’s responsibility for its decisions and actions that impact society and the environment” (Diddi & Niehm, 2016: 63). Another definition by Schuler & Cording (2006) points to the aspect of voluntariness by describing CSR as “a voluntary (i.e., not directly mandated by government regulation) business action that produces social (third-party) effects” (Schuler & Cording, 2006: 544). Despite the
existence of several definitions, it is noticeable that scientists predominantly relate CSR to the triple bottom line, including economic, social and environmental concerns, and meeting stakeholders’ expectations (Aguinis, 2011; Schramm-klein et al., 2016). Addressing the variety of definitions of CSR in the literature, Dahlsrad (2008) analyzed the 37 definitions and drew the conclusion that the construct of CSR is based on the following five dimensions: environmental, social, economic, stakeholder, and voluntariness (Dahlsrad, 2008).
This inquiry will adhere to the definition provided by Aguinis (2011) where CSR involves “context-specific organizational actions and policies that take into account stakeholders’ expectations and the triple bottom line of economic, social and environmental performance” (Aguinis, 2011: 855). As the focus of this research is on consumers as major stakeholders in the fashion industry and their consumer behavior, Aguinis definition best captures the research setting.
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Carroll & Shabana (2010) add cost and risk reduction and legitimacy as potential CSR benefits to firms.
Furthermore, existing literature discusses the different motivations of firms to incorporate CSR into their businesses. Aguilera et al. (2007) identify three major motives for companies to implement CSR practices, namely instrumental, relational and moral motives. Instrumental motives are driven by self-interest and constitute the most prominent reason. In contrast, relational motives are aimed at other stakeholders and moral motives refer to ethical goals the company wants to achieve (Aguilera, Rupp, Williams, & Ganapathi, 2007). Saiia et al. (2003) provide a different classification of CSR motives. They point to altruistic and strategic CSR as main motivational drivers of company engaging in CSR (Saiia, Carroll, & Buchholtz, 2003). Altruistic CSR is regarded as the “fulfillment of an organization’s philanthropic
responsibilities, going beyond preventing possible harm to helping alleviate public welfare deficiencies, regardless of whether or not this will benefit the business itself” (Lantos, 2002: 206). This motive derives from an organization’s internal motivation of doing something good. Altruism considers the unselfish concern for societal welfare (Saiia et al., 2003). In contrast, organizations integrating CSR practices that are strategic are driven by different motives. Here, “corporations contribute to their constituencies, not only because it is a kind and generous thing to do but also because they believe it to be in their best financial interests to do so, thereby fulfilling their fiduciary responsibilities to the stockholders” (Lantos, 2002: 207). Thus, strategic CSR initiatives are less voluntary and are predominantly driven by external pressure. This external pressure might come in form of regulatory pressures, consumer boycotts or from the market facing changing consumer demands (Muller & Kolk, 2000).
10 2.2.1. CSR in the fast fashion industry
In his study, Laudal (2010) states that certain industries have a higher CSR potential compared to others and by CSR potential he refers to the risks associated with corporate responsibility. His findings reveal that the global fashion industry is exposed to high CSR risks due to 6 specific features that characterize the industry. The first feature refers to labor-intensive production in the fashion industry which leads to an increased likelihood of poor labor conditions. Second, Laudal (2010) points to the low cost levels in the production countries that allows for a higher possibility of corruption owed to environmental and social standards that tend to be rather loose. Third, the fashion industry is a buyers’ market in which the retailers have a higher bargaining power and strong competition can result in a resource overexploitation among the producers. Fourth, the predominant features of short deadlines and low predictability might provoke an overuse of resources. Fifth, the low transparency in the supply chain can lead to unnoticed breaches of CSR standards. And the last feature that Laudal (2010) highlights is the communication barriers that might exist between
manufacturers and retailers. These six features can be seen as an indication for the high risk of corporate social responsibility in the fashion industry (Laudal, 2010). The emergence of the fast fashion concept emphasizing speed, quantity and size has even worsen the risk of
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and environmental programs as CSR practices address the most prevailing CSR issues in the fashion industry – labor and environmental issues.
2.2.1. 1. Ethical sourcing
Regardless of the global success of fast fashion, severe sustainability issues have emerged (Clark, 2008; Kim et al., 2013). The labor-intensive character of apparel manufacturing and the exposure of sweatshop issues on the media have shifted the sourcing practices of fashion retailers to consider ethical issues. Ethical sourcing include efforts to abandon labor abuses and ensure proper working conditions along the global supply chain (Mann et al., 2014). Addressing these issues is particularly crucial in the fashion industry as “frequent violations in workers’ rights in the apparel industry have received negative publicity from stakeholders and considerable scrutiny over the use of sweatshop labor “ (Mann et al., 2014: 601). As a result of outsourcing production to low-cost-labor countries, the fashion industry had to deal with accusations of child labor, abuses of human rights and failing to ensure minimum labor standards (Perry & Towers, 2013; Rudell, 2006). As a consequence, fashion retailers strive to make efforts to inhibit labor abuses and to assure acceptable working conditions. In order to address these issues, companies set supplier codes of conduct in which they specify working conditions. In those codes of conduct, companies can record conditions like no child labor, minimum wages and workplace standards that the supplier has to fulfill (Perry & Towers, 2013).
2.2.1.2. Environmental programs
Environmental issues are another key area for retailers to operate in a socially responsible way (Lee & Jackson, 2010). Especially in industries with a high environmental impact like the fashion industry, retailers attempt to minimize their environmental footprint. The
production process of the fast fashion industry, particularly the process of dyeing, drying and finishing, intensively includes chemical products and natural resources that affect the
environment (Caniato et al., 2012). Another major environmental concern in the fashion industry is the issue of waste. The reduced life-cycle of textiles and high production volumes lead to a heightened textile disposal. Yet, the majority of textile ends up as waste in landfills instead of using it for recycling purposes (Kim et al., 2013). Thus, fashion retailers
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hazardous emissions in communities in which they are located; (2) adoption of pollution prevention and clean manufacturing practices that prevent pollution before it occurs; (3) redesign of products and processes to achieve more beneficial environmental impacts for customers and communities; (4) materials reduction, recycling, and re-use; (5) resource conservation” (Rondinelli & Berry, 2000: 78). Caniato et al. (2012) add green certificates like the Global Organic Textile Standards or the Eco label as other environmental practices.
2.3. Consumer purchasing behavior
Consumer behavior can be identified as the “totality of consumers’ decisions with respect to the acquisition, consumption, and disposition of goods, services, time, and ideas by human decision making units” (Brown & Dant, 2009: 239). As the definition illustrates, the concept of consumer behavior provides a wide scope for human behavior.
In literature, researchers outline several components that influence consumer behavior (Diddi & Niehm, 2016; Fishbein & Ajzen, 1977). Attitudes towards behavior is one of these
components that constitutes an essential part of the consumer behavior literature (Bray et al., 2011; Carrigan & Attalla, 2001; Diddi & Niehm, 2016; Mcneill & Moore, 2015; Öberseder et al., 2013). Diddi and Niehm (2016) argue that the “attitude towards behavior is determined by two types of information: salient beliefs about the behavior and evaluation of expected
outcomes associated with behavior. When individuals associate desirable consequences with specific behaviors, they form a positive attitude toward the behavior” (Diddi & Niehm, 2016: 64). Furthermore, Fishbein and Ajzen (1977) point to intentions and beliefs as additional vital elements determining consumer behavior next to attitudes. They reason that attitudes, beliefs and intentions equally influence the creation of consumers’ views. Culture is another element that has been identified as determining consumer behavior (Abdulrazak, Ahmad, & Quoquab, 2016; Muncy & Vitell, 1992). Culture forms the basis of consumers’ attitudes, values and ideologies. This implies that consumer’s purchasing decision is culturally dependent. Thus, consumer purchasing behavior varies across different cultural settings. Abdulrazak et al. (2016) state that consumers make their consumption decisions based on the cultural meaning that they obtain from the product.
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Carrigan, 2000; Bray et al., 2011; Carrigan & Attalla, 2001; Lee & Jackson, 2010; Mcneill & Moore, 2015). Some studies have identified a significant gap between what consumers state to care about and the decisions these consumers actually make (Carrigan & Attalla, 2001; Lee & Jackson, 2010). Roberts (1996) verifies the difference between what people claim regarding their purchase behavior and how they truly behave. This attitude-behavior gap is especially apparent in the ethical consumerism literature. Consumers are increasingly concerned about the impact of companies’ operations on the environment and society and increasingly care about companies’ behavior. However, this attitude does not always results in the subsequent behavior (Boulstridge & Carrigan, 2000; Bray et al., 2011; Roberts, 1996). In other words, consumers might express a concern about firm’s activities, however they might still consume products of the company.
2.4. Consumer awareness
There is considerable theoretical literature proposing that CSR practices can increase a firm’s profitability and value (Servaes & Tamayo, 2013). This positive effect can be mainly
attributed to consumers’ enhanced willingness to purchase at socially responsible companies (Maignan & Ferrell, 2004). Today, consumers are more sophisticated and show an increased concern of social and environmental well being (Mcneill & Moore, 2015). Furthermore, consumers are becoming more knowledgeable about companies and their activities due to facilitated access to information. However, consumer awareness towards CSR practices has been outlined as a possible barrier for firms to obtain the benefits of their CSR engagement (Du, Bhattacharya, & Sen, 2010; Pomering & Dolnicar, 2009). McWilliams & Siegel (2001) argue that customers should be fully aware of firm’s CSR initiatives in order for organizations to be successful. In their study, they forecast a positive relationship between advertising intensity and CSR practices (McWilliams & Siegel, 2001). Diddi and Niehm (2016) also highlight communication of CSR practices in the context of consumer awareness.
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Following the relevance of CSR communication, existing research investigated how
consumers desire to be communicated on CSR. In their study, Pomering and Dolnicar (2009) investigated CSR communication in the Australian banking sector. The results revealed that despite consumer’s predominant interest for core information about product, service or brand, an interest for CSR-related issues is also existent. Yet, consumers seem to be not satisfied with the information about CSR initiatives provided by organizations (Pomering & Dolnicar, 2009). Mohr et al. ( 2001) also point to the lean availability of CSR information. Today’s businesses increasingly fail to recognize consumers’ wishes to learn about the companies’ CSR engagements. Consequently, consumers might interpret this lean information availability as a lack of commitment towards the environment and society (Pomering & Dolnicar, 2009). Supporting consumers’ CSR interest, Dawkins (2004) revealed that three out of four
consumers predicated that having more CSR information about organizations available would affect their purchasing behavior. In addition, she argues that the majority of consumers would like organizations to invest more in CSR communication. Effective CSR communication can positively influence consumers’ decision making (Dawkins, 2004).
Bhattacharya & Sen (2004) investigated the levels of consumer CSR awareness and found a notable variation. There are only a few consumers that actively follow organizations’ CSR engagements. The majority of the consumers is identified as being fairly unaware of the general CSR efforts of companies (Bhattacharya & Sen, 2004; Dawkins, 2004). Most consumers do not know that organizations carry out CSR initiatives. In Dawkins (2004) study, two-thirds of the interviewed consumers were incapable of identifying a company that supports the society and simply one-third of the consumers were able to mention a company that they perceive as specifically environmentally, ethically, or socially responsible.
Furthermore, many consumers in the study of Bhattacharya & Sen (2004) only identify
companies regarding their CSR practices when the brand was communicated as being socially responsible. Hence, as the majority of the consumers do not proactively search for
information, Dawkins (2004) stresses that it is vital that companies enhance their CSR communication in order to attract more consumers.
15 2.5. Conceptual framework and Hypotheses
Relationship between consumer awareness of CSR practices and consumer purchasing behavior
As mentioned previously, this research will investigate the effect of consumer awareness on consumer purchasing behavior. Lii et al. (2013) stated that introducing CSR practices “will bring value to the corporation, specifically through consumers’ positive attitudes toward the brand and enhanced perceptions of credibility towards the CSR campaign”(Lii et al., 2013: 17). Several researchers have found a positive relationship between a company’s CSR practices and consumers’ attitudes towards the company resulting in enhanced consumer purchasing behavior (Bhattacharya & Sen, 2004; Caniato et al., 2012; Folkes & Kamins, 1999; Lii et al., 2013; Mohr et al., 2001; Öberseder et al., 2013; Schramm-klein et al., 2016). “Intangible aspects of corporate strategy, such as CSR or social marketing initiatives, have been shown to lead to an increase in brand equity, purchases, customer loyalty, word-of-mouth advocacy, and positive purchase-related outcomes” (Diddi & Niehm, 2016: 66). CSR practices are expected to have a positive effect on consumer purchasing behavior as
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higher level of awareness will result in a more positive attitude towards a company and a more positive behavioral response (Bronn & Vrioni, 2001). Given the industry-specific
perspective of this study, the fast fashion industry constitutes an example of an industry that is under scrutiny due to incidents like the Rana Plaza collapse and its fast responsiveness
character in general. In such an industry, creating enhanced awareness of fast fashion retailer’s CSR practices among consumers can benefit the retailers. Thus, this study will particularly focus on H&M and Zara as these two global players are considered as the embodiment of fast fashion (Caro & Martinez-de-Albeniz, 2015; Taplin, 2014). Based on current literature on CSR and consumer purchasing behavior, this research expects that consumer awareness of H&M’s and Zara’s CSR activities will positively influence consumer purchasing behavior at those retailers. Consumers of H&M and Zara will be regarded
separately. Hence, the following hypotheses will be under investigation:
Hypothesis 1: Higher consumer awareness of H&M’s CSR activities will lead to higher consumer purchasing behaviour at H&M.
Hypothesis 2: Higher consumer awareness of Zara’s CSR activities will lead to higher consumer purchasing behaviour at Zara.
17 Figure 1: Conceptual model
3. Methodology
3.1. The selection of H&M and Zara
In literature about fast fashion, H&M and Zara are outlined as the pioneers and the
embodiment of the concept of fast fashion (Caro & Martinez-de-Albeniz, 2015; Kim et al., 2013; Mehrjoo & Pasek, 2014). The two multinational companies are widely recognized as the major players in the industry. In particular, Zara has been oftentimes used as an example in research. However, research about Zara was mostly done in the context of supply chain management (Caro & Martinez-de-Albeniz, 2015; Lewis, Machuca, & Ferdows, 2004; Tokatli, 2008). In contrast, H&M has barely been studied in particular. As these two companies are acknowledged as the exemplary representation of fast fashion, this study focuses on consumers of H&M and Zara and their purchasing behaviour regarding
sustainability. In the following, H&M and Zara will be introduced separately, as well as their corporate social performance.
3.1.1. H&M
H&M Group belongs to one of the world’s leading fashion companies. It is a Swedish fashion organization that includes 6 brands – H&M, COS, Monki, & other stories, Weekday and
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Cheap Monday. The group is strongly established on the global market with currently having more than 4200 stores in 64 markets (H&M Group, 2016).
Sustainability constitutes the core of H&M’s business strategy. In their mission statement, the group states that they “want to make sustainability fashion choices available, attractive and affordable to as many people as possible” (H&M Group, 2016). Accordingly, in the
sustainability commitment for H&M business partners, healthy workplaces, healthy ecosystems and animal welfare form the fundamentals for ensuring sustainability. Healthy workplaces predominantly address the working conditions of employees at factories including amongst other factors like health and safety, fair living wage, benefits and working hours and child labor. Furthermore, H&M acknowledges the importance of healthy ecosystems by considering the use of chemicals, waste and recycling. Animal welfare is another issue
covered by the sustainability commitment of H&M. This issue involves animal husbandry and animal testing. Supplier’s compliance to these issues stated in the sustainability commitment is monitored by H&M (H&M Group, 2015). The group places strict demands on their
suppliers that are formulated in the codes of conducts. H&M’s commitment to CSR is further emphasized by its recently changed policy regarding plastic bags. The reduction of plastic bags contributes to the company’s willingness to minimize its ecological footprint. Supporting this willingness, H&M also introduced a recycling box in their stores in which customers can return old fashion items that they will not wear anymore. In 2010, H&M introduced an entire fashion collection that was made from sustainable materials, like organic cotton (H&M Group, 2016).
On their company website, the H&M group provides information about the positive outcomes of their sustainable engagement so far, which include:
- 78% of the electricity they used in 2015 derived from renewable sources - reduction of greenhouse gas emissions by 56% in 2015
- created about 1.6 million jobs for employees at supplier factories
19 3.1.2. Zara
Zara is a Spanish fashion retailer that belongs to the holding company Inditex. Inditex is considered as one of the world’s largest fashion retail groups. The group unites eight different brands – Zara, Pull&Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home and Uterque. Those brands share the same sales and management approach focused on customer service (Inditex, 2016). The group is a global player with 7,000 stores in 91 markets.
In their business strategy, the Inditex group places great emphasis on sustainability. “Inditex’s goal is to offer products of the highest quality to all its customers at the same time as striving to develop a business that is sustainable” (Inditex, 2016). The group’s environmental and sustainable strategy builds on three foundations: Clear to Wear and Safe to Wear, Tested to Wear and Green to Wear. The ‘Clear to Wear and Safe to Wear’ foundation relates to the customer by developing strict product health and safety standards. ‘Tested to Wear’ focuses on labor standards that are set in the Code of Conduct for manufacturers and suppliers. And ‘Green to Wear’ addresses environmental sustainability standards (Inditex, 2016). All of the mentioned standards are closely incorporated in the organization’s goal to make products that are ‘Right to Wear’.
3.1.3. Corporate Social Performance of H&M and Zara
The two fast fashion retailer, Zara and H&M do not reveal financial data about their CSR effort that can be publicly accessed through for instance their annual reports or sustainability reports. This financial data could exemplary be the percentage of turnover of the company’s spending on CSR. However, an alternative to gain insight about the companies CSR
engagement is their Corporate Social Performance (CSP). To provide information about the CSP of H&M and Zara, I will make use of the Asset4 ESG scores. The Asset4 ESG
framework rates organizations against 10 categories classified into 3 pillars. The social pillar is the first one and considers practices that address labor and human rights, as well as
community and product responsibility. Another pillar is corporate governance which regards CSR strategy, shareholders and management. The last pillar considers the environmental dimension by including usage of resources, emissions and innovation. The scores are a result of equally weighting the data points and comparing them with the other organizations. Thus, the scores are percentage measures of performance. It has to be noted that the latest scores are based on the year 2015. As outlined in the literature review previously, social and
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look at the ratings for the social and environmental pillar for both H&M and Zara. I used the environmental and social scores of H&M and Inditex (representing Zara) and computed an average score. H&M has a average rating of 89.51 and Inditex a rating of 93.86. It can be seen that both companies have a rather high rating on their corporate social performance regarding the environmental and social dimensions. However, Inditex has a slightly higher rating which might be an indication for a higher CSR effort.
3.2. Data collection
Regarding the methodology of this empirical research, this research uses a quantitative
research method in order to examine the previously formulated hypotheses. As this study aims to investigate consumer’s awareness of CSR practices and the influence on consumer
purchasing behavior in the fast fashion industry, a quantitative research method is more suitable than a qualitative approach. Given the underlying research setting, conclusions can best be drawn based on statistical measurements and comparison of data.
Due to the exploratory nature of this research, primary data has been obtained by the use of an online survey. This selection can be attributed to the several advantages of online surveys that benefit the given research objective. One major advantage of online surveys is the elimination of geographical boundaries (Katsirikou & Skiadas, 2009). As the survey is distributed online, researchers can more easily reach geographically dispersed respondents. In international settings, as is the case in this study, a broader diversity in terms of nationality among the respondents can be obtained. This study benefits from a sample consisting of various nationalities in order to further assess if nationality also has an influence on consumer purchasing behavior. Furthermore, by using online surveys, a large amount of data can be collected in a relatively short period of time. The focus on consumers in the fast fashion industry also influenced the selection of survey research as consumers can be easily reached by an online survey.
In particular, a completion questionnaire was developed. Contrary to interviews, self-completion questionnaires are considered as a relatively cheap survey tool that enable the researcher to reach a wider population (Thomas, 2004). Yet, considering the fact that those questionnaires are predominantly distributed online, researchers are unable to react if
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questions were understandable and clear to the respondents, I applied a pilot test before the final distribution of the survey. As stated by Thomas (2004), pilot testing is essential in research. In this study, a total of 5 respondents participated in the pilot test and filled out the online questionnaire. These respondents provided comments regarding clarity of the survey, length and further improvements. The questionnaire was then modified according to the comments. The result of the pilot test involved only minor errors as for instance a
misunderstanding or ambiguity of the education level. Thus, the question about the education level has been more specified by explaining that the answer refers to the lastly completed education level. After the modification of the survey, it was designed and hosted online using Qualtrics online software. The access of the survey was made available online through a web link. The online survey was distributed via social media platforms. Particularly, the social network sites Facebook and Twitter have been chosen for the distribution. The sample selection followed an online snowball method. The snowball sampling describes the survey distribution as a cycle in which the survey is distributed to one respondent and will be forwarded to another respondent who in turn will also spread the survey, and so forth (Baltar & Brunet, 2012). This survey was distributed to my acquaintances that spread the link via Facebook or e-mail. Yet, the snowball sampling method is not without its disadvantages. The method might leave a sampling bias, since respondents forwarded the survey to people within their social network that will most likely share similar traits and characteristics (Baltar & Brunet, 2012). It is possible that the sample is only a small section of the entire population. Hence, the sampling method can limit the representativeness of the sample and makes it hard to generalize the results. Nevertheless, given the limited time and costs of this research, the snowball sampling represents a fast and efficient method to address a high number of
respondents in a short-time period. In order to circumvent any ethical issues, respondents have been notified that their responses will be entirely anonymous.
22 3.2.1. Sample
In total, the sample consists of 151respondents, of which the majority are female (56.3%). The nationality distribution of the sample illustrates that most of the respondents were Germans (47.0%), African (21.2%), Dutch (8.6%) and from other European countries (11.9%). The average age was 25 years. Furthermore, the majority of the respondents had a Bachelor’s degree (55.6%) and an annual income level that is less than 25.000€ (75.5%). A table displaying the sample characteristics can be found in Appendix II.
This sample has been divided into H&M shoppers and Zara shoppers. The sample of H&M shoppers consists of 76. The majority was also female (72.4%) and mostly German (59.2%). The H&M shoppers that fill out the survey mainly has a Bachelor’s degree as the highest level of education (44.7%) and predominantly an income less than 25.000€ (78.9%). The Zara shoppers that participated in this research make up a sample of 68 respondents that also were mainly female (70.6%). The prevailing nationality among the respondents was also German (58.8%). The sample can be further described as mainly having a Bachelor’s degree (42.6%) and an annual income of less than 25.000€ (77.9%). The tables illustrating the demographic characteristics of H&M shoppers and Zara shoppers can be seen in Appendix II.
3.2.2. Constructs and Measurements
23 Table 1: Sources of survey items
Sources
Consumer purchase behavior Pomering & Dolnicar (2008); McNeill & Moore (2015); Schramm-Klein et al. (2013)
Consumer awareness Schramm-Klein et al (2013); H&M; Zara
Independent variable
The independent variable in this research is consumer awareness of CSR practices. This variable is intended to measure to what extent H&M and Zara consumers are aware of their CSR activities. The questions addressing consumer awareness in the survey are based on Schramm-Klein et al.’s (2013) study. In their research, Schramm-Klein et al. (2013) examine consumer’s perception of 12 items regarding CSR activities. However, I only selected 4 items as the rest did not seem appropriate to the specific cases of H&M and Zara. I compared those chosen items with H&M and Zara’s information about their CSR practices that is revealed on their websites. Another selection criteria was to only select those CSR activities that address environmental and ethical issues as those two issues have been identified as the most
prevailing problems of the fast fashion industry. The four items I selected included: support of humanitarian projects in developing countries, offer of re-usable bags, warranty of working conditions when choosing their suppliers and environmentally friendly production of their products. The customer’s awareness of the company’s engagement in those four activities has been measured on a 5-point Likert scale ranging from 1 (not at all) to 5 (very high).
Furthermore, respondents have been asked if they consider the particular company as ethical and environmentally friendly which was measure on a 5-point Likert scale ranging from 1 (strongly disagree) to 5 (strongly agree). These questions will be asked about H&M and Zara separately for the particular shoppers.
Dependent variable
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socially responsible company; (2) I consider the ethical reputation of businesses when I shop; (3) I avoid buying products from companies that have engaged in immoral action; (4) I would pay more to buy the products of a company that shows caring for the wellbeing of our society; and (5) If the price and quality of two products are the same, I would buy from the firm that has a socially responsible reputation” (Pomering & Dolnicar, 2009: 291). Furthermore, respondents have been asked about their consideration of sustainability and ethics when buying fashion clothing on a 4-point Likert scale ranging from ‘never’ to ‘always’ (Mcneill & Moore, 2015). The purchasing behavior has been also addressed by asking respondents about how frequently they shop at H&M or Zara on a 5-point Likert scale ranging from ‘very rarely’ to ‘very often’ (Schramm-klein et al., 2016).
Control variable
This research will also control for other variables that might have an effect on the dependent variable, consumer purchasing behavior. Five control variables will be considered – gender, nationality, age, education level and annual income level. Gender has been outlined as having an effect on consumer behavior (Chung & Monroe, 2003; Mainieri, Barnett, Valdero, Unipan, & Oskamp, 1997). “The gender factor has high impact on lifestyle attributes because females and males have different expectations of fashion products” (Rocha, Hammond, & Hawkins, 2005: 385). Fashion consumption has a more central position in the lives of females than it has for males. Further, it has been found that women score higher on ‘green buying’ than men (Mainieri et al., 1997). Therefore, gender constitutes an interesting variable to control for in this research setting. Nationality might also affect the dependent variable. Different
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ethically and responsible (Kelley, Ferrell, & Skinner, 1990). Thus, it is expected that the education level might also have an influence on purchasing behavior of fashion products. Related to the education level of the consumer, income has been outlined as another factor determining purchasing behavior (Ma, Shi, Chen, & Luo, 2012). Different income levels of consumers may lead to a difference in consumer responses (Alderman, 1986). Hence, I will also control for the annual income level of consumers. The data for these control variables were collected with the demographical questions that were asked in the beginning of the survey.
3.3. Data analysis
After the survey distribution, the collected data was imported into the IBM SPSS software. In SPSS, the gathered data was cleaned. In total, 165 responses were collected. However, 14 questionnaires have been identified as incomplete and were thus discarded and not considered in the analysis. Therefore, the final sample consists of 151 respondents.
In order to analyze the data, correlations and regression analysis have been performed for the H&M and Zara sample. To check that multicollinearity does not reduce the consistency of the results, the correlation coefficients and the variance inflation factors (VIF) have been
inspected . Hoerl & Snee (2012) state that multicollinearity occurs if the VIF values are higher than 5. And VIF values higher than 10 are problematic. Furthermore, correlation coefficients that are higher than 0.7 could be an indicator for multicollinearity. In this study, the explanatory variables do not suffer from the issue of multicollinearity. The VIF values will be presented in the following regression analysis. However, as a first step the constructs will be assessed in terms of reliability and internal consistency, normal distribution and heteroscedasticity.
Reliability
The reliability and internal consistency of items measuring the 2 constructs under
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The measure for Zara can be regarded as acceptably reliable. However, the measure for the H&M shoppers is smaller than .7, thus it is questionable. Despite the slightly questionable measure, this research will still incorporate the construct. Consumer purchasing behavior as the dependent variable is measured by six items on a 5-point Likert scale. The Cronbach’s alpha of the consumer purchasing behavior of Zara shoppers is .748 and for H&M shoppers .731. Thus, it can be concluded that the items measuring purchasing behavior show acceptable reliability and internal consistency.
Normal distribution
In this study, the data are cross-sectional as the underlying subjects have been observed at a certain point of time as opposed to a time-series. In order to perform a multiple regression, one assumption that has to be investigated is a normal distribution. Hence, I will check for skewness and kurtosis. According to Gravetter & Wallnau (2014), the values of skewness and kurtosis are supposed to be between the threshold of – and +2. The following tables (table 2 and 3) display the values for skewness and kurtosis for H&M and Zara shoppers. As can be seen in both tables, the majority of the values lays within the previously stated threshold, except for the control variables age and income level. In particular, the variable age provides very high values for skewness and kurtosis. Consequently, the control variables age and income level will be discarded from the regression analysis due to their high values.
Table 2: Skewness and Kurtosis for H&M shoppers
Variable Skewness Kurtosis
Purchasing behavior -0.784 0.271 Consumer awareness -0.122 -0.006 Gender 1.021 -0.985 Nationality 1.337 0.667 Age 5.872 42.167 Education level 0.337 -0.987 Income level 2.372 4.835
Table 3: Skewness and Kurtosis for Zara shoppers
Variable Skewness Kurtosis
Purchasing behavior -0.905 0.531 Consumer awareness -0.350 -0.444
Gender 0.924 -1.181
Nationality 1.253 0.354
27 Education level 0.125 -1.235
Income level 2.140 3.404
Additionally, I conducted a Shapiro-Wilk test to further assess the normal distribution of the gathered data. The Shapiro-Wilk test is a well-known test for normality and is more
appropriate for small sample sizes as is the case in this study (Shapiro & Wilk, 1965). The underlying null hypothesis (H0) implies that the values are not statistically different to a
normal distribution. If the significance value of the test is greater than 0.05, then the data is normally distributed. For H&M shoppers, the Shapiro-Wilk test indicates a p-value of 0.377 and a statistic of 0.894. The p-value of the test for Zara shoppers is 0.295 and the statistic value measures 0.912. For both samples, the p-value is greater than 0.05. Thus, H0 cannot be
rejected and the distribution of the dependent and independent variable in this study is normal.
Heteroscedasticity
Another assumption for a multiple regression analysis deals with heteroscedasticity. If the values that a dependent variable take are inhomogeneous across the range of values of its predictors, researchers talk about issues of heteroscedasticity (Engle, 1984). In this study, a Likelihood Ratio test has been conducted in order to assess the heteroscedasticity. Based on the results that are presented in appendix III, Prob>ch2 is significant with p<0.05 and the null hypothesis can be rejected. Consequently, this study does not provide a problem of
heteroscedasticity.
4. Results
The following section will report the results of the correlation and regression analysis in order to examine the assumed relationship between consumer awareness and consumer purchasing behavior at H&M and Zara.
Tables 4 and 5 display the descriptive statistics in terms of the mean and standard deviation and the correlations for the dependent and independent variable, as well as the control
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and nationality are reported in the table with their correlation coefficients. As has been already described the mean age for both sample groups is 25 years and the majority of respondents were female. The average education level of both groups is relatively high as most respondents have completed a Bachelor’s degree (mean = 1.79 and 1.93 with High school degree = 1, Bachelor’s degree = 2, Master’s degree = 3 and Phd = 4). Thus, it can be assumed that the sample mostly consists of students and young professionals. The average annual income level confirms this assumption. In both samples, the respondents
Table 4: Means, standard deviations and Spearman correlation coefficients (H&M)
Mean S.D. 1. 2. 3. 4. 5. 6. 1. Consumer awareness 2.6864 .59065
2. Consumer purchasing behavior 3.4342 .66281 .252*
3. Gender / / -.017 -.117
4. Nationality / / .090 -.081 .022
5. Age 25.0526 7.11223 .198 .014 .303** .077
6. Education level 1.79 .718 .260* .007 .060 .403** .301**
7. Income level 1.36 .795 .132 -.001 .309** -.042 .323** .198
** Correlation is significant at the 0.01 level (2-tailed) * Correlation is significant at the 0.05 level (2-tailed) N=76
Table 5: Means, standard deviations and Spearman correlation coefficients (Zara)
Mean S.D. 1. 2. 3. 4. 5. 6. 1. Consumer awareness 2.8015 .56004
2. Consumer purchasing behavior 3.5466 .66967 .045
3. Gender / / .031 .002
4. Nationality / / -.023 .033 .270*
5. Age 25.1324 7.39686 .145 .101 .334** .148
6. Education level 1.93 .759 .031 .059 .232 .358** .420**
7. Income level 1.41 .885 .113 -.065 .168 -.244* .306* .193
illustrated in the same tables, interestingly, a significant positive correlation between the independent and the dependent variable of this study can be identified. However, this result is only found in the H&M sample (r = 0.252 at the 0.05 level). This correlation indicates that an increase in the value of consumer awareness of CSR activities of H&M does result in an increase of the value for consumer purchasing behavior. Moreover, the results of the H&M sample show that age has a significant positive correlation with gender (r = 0.303 at the 0.01 level). The educational level has been identified as being positively related to consumer awareness (r = 0.260 at the 0.05 level), nationality (r = 0.403 at the 0.01 level) and age (r = 0.301 at the 0.01 level). Further, the income level of HM shoppers positively correlates with gender (r = 0.309 at the 0.01 level) and age (r = 0.325 at the 0.01 level). For the Zara
consumers, table 3displays no significant positive correlation between consumer awareness and consumer purchasing behavior as opposed to H&M. Within that sample, significant positive correlations can be found for nationality and gender (r = 0.270 at the 0.05 level) and for age and gender as well (r = 0.334 at the 0.01 level). The education level of Zara shoppers is positively correlated with nationality (r = 0.358 at the 0.01 level) and age (r = 0.420 at the 0.01 level). Furthermore, income level shows a significant negative correlation with
nationality (r = -0.244 at the 0.05 level) and a positive correlation with age (r = 0.306 at the 0.05 level). Overall, the correlation coefficients are not very high. As can be seen in table 4 and 5 no coefficient is higher than 0.7. Hence, it can be concluded that multicollinearity is not a problem.
31 Table 6: Multiple Regression Analysis (H&M)
(Dependent variable: Consumer purchasing behaviour)
Model 1 Model 2 B SE B SE Intercept 3.590 .213 3.061 .370 Control Variables: Gender -.167 .170 -.167 .168 Nationality -.083 .059 -.080 .059 Education level .028 .113 -.025 .116 Main Effect: Consumer awareness .231* .133 R Square .042 .081 R Square Change F value .042 1.051 .039 1.566 * p<0.05
In Table 6 (H&M shoppers),it can be noted that, in model 1, gender (-0.167) and nationality (-0.083) have negative regression coefficients. This implies that an increase in the value of gender and nationality will lead to a decrease in consumer purchasing behavior. However, the control variables are not statistically significant for purchasing behavior. The tolerance
statistics reveal overall favorable values. In model 1, the highest VIF value is 1.25. In model 2 of the regression analysis, the effect of consumer awareness as a predictor is added. The regression coefficient of consumer awareness is 0.231 and is statistically significant (at the 0.05 level). This result supports H1, meaning that consumer awareness of H&M’s CSR activities lead to higher purchasing behavior. Yet, the R square value that indicates how much variance of the outcome is explained by the predictor variables is rather low (0.081). This means that only 8.1% of the variance of consumer purchasing behavior is explained by consumer awareness. Thus, the significant effect of the predictor variable on the dependent variable has to be reported as a relatively weak one. Comparing the R square of the 2 models for the H&M sample, a slight increase can be seen. Model 1 only explains the variation of the outcome variable with 4.2%, whereas model 2 with 8.1%. Regarding the tolerance statistics in model 2, the highest VIF measures 1.354. Thus, these low VIF scores provide no indication for multicollinearity.
32 Table 7: Multiple Regression Analysis (Zara)
(Dependent variable: Consumer purchasing behaviour)
Model 1 Model 2 B SE B SE Intercept 3.525 .233 3.264 .477 Control Variables: Gender -.052 .195 -.057 .196 Nationality .003 .065 .006 .065 Education level .016 .118 0.12 .119 Main Effect: Consumer awareness .095 .151 R Square .001 .007 R Square Change F value .001 .026 .006 .119
Regarding the model 1 of the regression analysis that includes the effect of the three control variables, gender is found to have a negative regression coefficient (-0.052). This result indicates that an increase in gender can lead to a decrease in consumer purchasing behavior. But, this negative effect is not significant. Similarly, all the other control variables are found to have no statistically significant effect on the purchasing behavior of Zara shoppers. Concerning the collinearity statistics, the highest VIF is 1.393. Model 2 includes the independent variable underlying this research. As can be seen in the table, the regression coefficient is positive (0.095). However, the effect of consumer awareness of Zara’ CSR activities does not significantly affect consumer purchasing behavior. Concerning the R square of this analysis, a slight improvement of the two models can also be noted. However, it is striking that the R square values are vastly low. Model 1 only explains the variation of consumer behavior by 0.1% and model 2 by 0.7%. In model 2, the highest VIF amounts to 1.395 which is not a problematic value.
To sum up, after reporting the results, support for H1 has been found, while H2 was unsupported.
Robustness checks
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misspecifications in the estimation model. In this study, to check the robustness of the model, I will add and remove different control variables to the estimation model. The results of the robustness check are presented in appendix IV.
Gender can be argued to have an effect on consumer purchasing behavior. Thus, I remove gender as a control variable and test the regression again. The results of the H&M sample reveal that the independent variable has no significant effect on the dependent variable anymore. Thus, it can be argued that the results on H1 are non-robust to gender. With gender removed, consumer awareness has no significant influence on consumer purchasing behavior in model 2. This finding contradicts the original results and reveals no support for H1. When further analyzing the results, no major changes in the regression coefficients can be noticed. Gender has a negative and not significant influence on consumer behavior. For Zara shoppers, the results show no significant change in the original model. These results prove that H2 is robust to gender.
Nationality and educational level can also be considered as influential on the consumer purchasing behavior. Therefore, I removed the control variable nationality and educational level and ran the regression again, respectively. The results showed a similar outcome. The regression coefficients do not display major alterations. However, it can be noted that consumer awareness has no significant influence on consumer purchasing behavior in the H&M sample. Thus, the results for H1 are not robust to nationality and educational level as well. A robustness of the results for H2 can be found for the two control variables.
As a final test, I also checked the robustness of the model with all control variables being removed. The results aim to the same direction as for the previous test of the control variables. The results related to H1 again contradict the original model. With all control variables being removed, consumer awareness of H&M shoppers does not significantly influence the purchasing behavior. Hence, H1 can be regarded as non-robust to the control variables – gender, nationality and education level. The results on H2 reveal robustness to the control variables.
5. Discussion
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CSR practices and consumer purchasing behavior. H&M and Zara have been identified as the major players in the industry and the collected sample of this study was separated into Zara and H&M shoppers. Considering the theoretical background, this study contributes to
literature in terms of an understanding of the relevance of consumer awareness of fast fashion retailer’s CSR activities to the actual consumer behavior. Pomering & Dolnicar (2008)
pointed to the importance of consumer awareness by finding that consumer purchase
intentions are influenced by CSR activities if consumers are aware of those activities. These findings are to some extent confirmed by the results of this research. For H&M shoppers, consumer awareness has been found to significantly influence consumer purchasing behavior. Hypothesis 1 has been supported, meaning that a higher consumer awareness of H&M’s CSR practices will result in higher purchasing behavior. This indicates that when consumers are aware of H&M’s CSR practices, they will be more likely to purchase at H&M. Thus, it can be generally noted that the sustainability engagement of H&M can be identified as a factor in the consumer’s decision-making while shopping. This result is further in line with existing
studies that state that consumers are gradually becoming more concerned about CSR practices and are purchasing products considering a company’s socially responsible engagement
(Carrigan & Attalla, 2001; D’Astous & Legendre, 2009; Forte & Lamont, 1998; Maignan, 2001).
The underlying findings further show that no significant interaction between consumer awareness and consumer purchasing behavior can be reported for Zara. Thus, hypothesis 2 has been rejected. A higher consumer awareness of Zara’s CSR activities does not lead to higher purchasing behavior. This might indicate that for Zara shoppers CSR does not play a role while shopping. This result is in line with Joergens (2006) study that suggests that regarding fashion purchases, the majority of consumers are more influenced by their own personal fashion needs than by the needs of other people involved in the supply chain. His research further showed that consumers were aware about ethical issues which have however not influenced their purchase decisions.
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Although the findings of this study show a positive significant influence of consumer awareness on purchasing behavior for H&M shoppers, it is important to further discuss that this effect is rather weak. Consumer awareness only slightly explains the variation in consumer behavior. This finding might indicate that other factors are more important to consumers of H&M. Despite the general positive interaction effect of CSR on purchasing behavior in literature, the fast fashion retail industry constitutes a specific setting. As earlier outlined, the fast fashion industry is predominantly characterized by price-sensitive
consumers, high volatility, large volumes and speed (Mehrjoo & Pasek, 2014). And it has been under constant scrutiny due to scandals showing irresponsible behavior of retailers in that industry. Thus, it is debatable if consumers within that industry are concerned and conscious about sustainability. The sample of this study mainly consists of students or young professionals that don’t have a high disposal income which matches the consumer
characteristics of the majority of H&M and Zara shoppers. Thus, these consumers might be more prone to consider other factors as more important than sustainability in their purchasing decision-making. According to Joergens (2006), consumers are more driven by personal needs like style or price than by ethical issues when it comes to purchasing fashion. However, this is just a possible indication of explanation for the finding and requires further in-depth research.
5.1. Managerial implications
This research offers some managerial implications that need to be addressed. The findings of the present study demonstrate the need for companies to create higher awareness of their CSR engagement among their customers.
First of all, it is vital that consumers should not be ignored by companies in terms of their CSR activities. Consumers are important stakeholders for companies that have a high
influence on the company’s overall success. Thus, managers need to consider the purchasing behavior of their customers. CSR might be one factor that can be considered as influencing a consumer’s purchase decision amongst other factors. The findings of this study indicate that at least for H&M, the CSR engagement of the company can indeed have an influence on the purchasing behavior of the consumers. Therefore, companies that effectively create consumer awareness of their CSR practices might benefit from enhanced purchasing behavior.
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strong positive effect on consumer purchasing behavior at the fast fashion retailers H&M and Zara. For H&M consumers, the findings indeed revealed a significant positive effect; yet it was reported as rather weak. This result does not mean that CSR should be paid less attention to by practitioners. In contrast, CSR continues to be an important part of business operations. Particularly in the fashion industry, Mohr et al. (2001) outlined that consumers are more likely to penalize socially irresponsible firms than to reward responsible one. Thus, it is vital that although the findings did not find a high significance for the effect of consumer
awareness of CSR activities on purchasing behavior companies still incorporate sustainability into their business strategy. As the industry is under scrutiny due to the many scandals,
companies should nevertheless engage in CSR in order to avoid any suspicion of irresponsible behavior which could harm the company’s success.
From a marketing viewpoint, this study’s findings indicate the need to integrate CSR into strategic marketing and corporate communication decisions. Literature pointed to the changing consumer dynamics that include more ethically aware and socially responsible consumers (Diddi & Niehm, 2016). The findings of this research support this ongoing change for the H&M consumers. CSR seems to be a factor in the purchasing decisions of H&M consumers as higher awareness of CSR activities has been found to lead to higher purchasing behavior. Therefore, in order to create awareness among consumers, companies need to educate them about the companies’ CSR activities. In order to educate their consumers about their CSR effort, managers should focus on effective communication of their activities. In-store advertising as well as branding that are including the CSR initiatives of companies might be effective ways to create awareness among their consumers. Taken the example of H&M, the company is advertising their recycling effort in their stores by giving customers the opportunity to drop their clothes that they sorted out off in one of the recycling boxes in the store.
5.2. Limitations and future research
This research has several limitations that need to be acknowledged. The rather limited
sampling approach constitutes one major limitation to this study. The relatively small number of respondents decreases the validity of this study and limits the generalization of the
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and might not represent the entire population. Thus, future research could conduct this study again with a larger sample size which would increase the validity and reliability and might also lead to different or more significant results. Furthermore, a different sampling method would increase the representativeness of the results.
Another limitation of this study is the nationality distribution of the sample. The majority of the respondents were German and from other European countries. These countries are
considered to have a rather low cultural distance and respondents might be similar in terms of their values, attitudes and also behavior. However, the fast fashion retailers that form the foundation of this study are global players. Consequently, the consumer awareness and purchasing behavior in this study might not be representative for H&M and Zara consumers. A more geographically-dispersed sample might show different results as consumer behavior might differ in other countries that are embedded in different cultures and norms. Future research can investigate the influence of culture on sustainable consumer behavior in the fast fashion industry and analyze if attitudes and behavior towards sustainability differ with respect to different cultures. Culture can perhaps also represent a possible moderator for the model that has been established for this thesis.
The selection of a survey as the research instrument is another limitation. The disadvantage of the survey design was that only closed-ended questions were asked which leaves no
opportunities for any further comments or explanations of the respondents. In order to more accurately and effectively measure consumer behavior that is a construct affected by several factors like the attitude of consumers, a focus group or interviews could be more informative research designs. These research designs provide the researcher with more valuable and in-depth information of consumer attitudes and their behavior.
Another limitation is that the survey responses, particularly the one measuring consumer purchasing behavior might be subject to the social desirability bias. Respondents could have said to take sustainability into account in their shopping behavior because it is regarded as the right behavior but they might not always act accordingly (Zikmund, 1997). This bias refers to the attitude-behavior gap that has been identified in the literature review.
Furthermore, another limitation constitutes the selection of H&M and Zara as the main focus of analysis. Due to the small sample size of respondents that shop at both stores (40
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investigated separately. Further research can strive to gather a bigger sample that shops at both stores. In addition, a difference between H&M and Zara and consumer purchasing behavior can be investigated in another research. In terms of their CSP scores, these two companies are quite similar in their CSR effort. It has been described that although both companies engage in different CSR activities, their overall sustainable performance scores quite similar. The Asset4 ESG ratings have been used to assess the company’s CSP. However, future research could try to get access to other measures that might be more reliable as for instance financial measures like the company’s CSR spending.
This study can be regarded as a starting point to explore the consumer purchasing behavior at the two major fast fashion retailers. Future research can build on and extend this study by investigating the effect of different communication channels. As the findings for H&M shoppers have revealed that consumer awareness can be seen as a weak predictor of
purchasing behavior, future research can analyze how to create consumer awareness of CSR activities and which communication tools are most effective. Moreover, this study only regards consumer awareness of CSR as a possible factor influencing the purchase decision and neglects all the other factors that might have an influence. Thus, further research can explore which other factors affect consumer’s purchasing behavior in the fast fashion industry and which one is the most decisive. Furthermore, it would be interesting to conduct interviews with consumers of both retailers and analyze their perceived difference between the two retailers and which factors drive their decision for purchasing at one or the other.
6. Conclusion
In the last decade, CSR has emerged as an essential business practices that has been
investigated by many scholars. Engaging in CSR practices is widely associated with positive outcomes for organizations as for instance better reputation, legitimacy or enhanced sales. This study investigated the effect of CSR activities on consumer purchasing behavior, in particular the influence of consumer awareness of CSR activities. This study is based on research that generally suggested a positive interaction between the socially responsible behavior of companies on company performance, particularly in affecting consumer
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