The retailer's role in the reconstruction of areas affected by the Great East Japan Earthquake: how can retailers make their social contribution coexist with their pursuit of profit?

Abstract

Although national and local government played a major role in supplying relief goods to victims immediately after the Great East Japan Earthquake, private companies, such as manufacturers, retailers, transportation traders, etc., also played important roles. Especially for retailers – though they were also victims of the disaster – offering refuge and supplying food, water, and a stable supply of necessary goods to affected people was an important part of the recovery process in affected areas. In spite of these important roles played by retailers, there is little research that analyzes these activities from the position of distribution and marketing.This paper seeks to clarify three particular questions. First of all, what damage did retailers suffer due to the earthquake and how did they restart their businesses? The speed of recovery depended on the damage suffered and the recovery of shopping streets composed of small retail stores was delayed compared with that of national chain stores such as convenience stores.After the disaster many retailers recognized their social responsibility to support affected residents, as well as stricken producers. However, when retailers prefer their own profit, it is likely to negatively affect the recovery of stricken producers, as it is easier for retailers to switch suppliers. In fact, major CVS companies tried to secure alternative suppliers. The second question is: why did some retailers endeavor to support the recovery of stricken producers? From the transaction cost approach, it can be inferred that the more reliable the relationship which has been established, the more difficult it is for the retailers to quit the relationship. In this case, it is beneficial for retailers to support stricken producers because the retailers' actions will provide gains. However, in a situation where no benefits are expected from their support, is it a genuine altruistic social contribution? Even in this case, the retailers can expect that consumers will evaluate their social contribution and thus enhance store loyalty and hopefully increase their product sales. When we analyze the continuation of the relationship in terms of cost-benefit derived from the transaction, social consideration should be incorporated into the framework.We call these actions “ethical marketing” in this paper and emphasize its effects during the period as consumers changed their attitudes toward the social role of companies, including retailers, after the earthquake. The final question addressed is what kind of mechanism is at work in the interaction between retailers'contribution to society and ethical consumers' response. Some business models are explained which will enable retailers to try and achieve coexistence between social contribution and profit pursuit.