ICA: Marketing Ethics: Supplier Safety

Fast-fashion retailers such as Zara, H&M, and others demand short lead times and quick changes from suppliers to feed consumers’ demand for changing fashions. Retailers used to place orders almost a year in advance and suppliers produced high volumes cheaply. But fast-fashion retailers now offer new inventory in their stores almost weekly to get customers coming back. Additionally, many retailers are placing small initial orders, and if styles take off with consumers, they quickly re-order—a tactic known as “chasing.” Appropriate inventory levels in the apparel industry have always been difficult to predict, but it appears that retailers are pushing this worry back onto suppliers. Bangladesh is the second largest apparel producer for North American and European brands and retailers. However, recent fires and building collapses due to lax safety concerns are killing thousands of workers and even some of the factory executives. Unlike in more developed countries, the industry in Bangladesh is loosely regulated. That, coupled with the demands to feed the fast-fashion industry, is alleged to be the cause of these tragedies. As a result, U.S. and European brands and retailers are coming under greater scrutiny concerning supplier issues. IndustriALL, a Geneva-based international union, organized a proposal to enhance supplier safety in Bangladesh that many, but not all, Western retailers/brands accepted.

Write a brief report on the Bangladesh Accord on Fire and Building Safety proposed by IndustriALL. Which retailers signed onto the agreement and why have some U.S. retailers refused to sign the pact?

Should retailers be responsible for safety conditions in garment factories in other countries?