What Can Help a Fashion Retailer: Disclosing Supplier Names or Supplier Sustainability Conditions?

Abstract

This paper investigates the relationship between different types of transparency information (supplier versus sustainability) and its effect on consumers’ online purchasing behavior for clothing (willingness to pay and likelihood to provide a firm with additional business). In our research, supplier transparency consists of the disclosure of a supplier’s name, location, and number of workers whereas sustainability transparency consists of the disclosure of a supplier’s payment of factory wages, use of sustainable materials, and reduction in energy usage. Results from online experiments show that, when a product’s quality is known to be high, supplier and sustainability transparency information have no significant difference in terms of their impact on consumer purchasing behavior. In fact, either type of information could be used to increase consumers’ likelihood to provide a firm with additional business, but neither type of information is effective in increasing consumers’ willingness to pay. However, if a product’s quality is unknown, only sustainability transparency information will impact consumer purchasing behavior. In fact, in this scenario, sustainability transparency information will both increase consumers’ willingness to pay and their likelihood to provide a firm with additional business. Overall, this research contributes to the growing interest in sustainable operations and marketing literatures on how the type and nature of information presented to consumers can affect their perceptions and behavior.

Keywords: sustainability transparency, supply chain transparency, consumer behavior