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Introduction

Retailing and the This paper addresses ethical aspects of the


Internet: a review of impact of the Internet on retail activities.
ethical issues Initially, examples of The Gap and Body
Shop are used to show how a retailer's ethical
status and reputation can increasingly be
Paul Whysall
influenced by various actors' activities on the
Internet, which leads to a discussion of the
use of the Internet by those who seek to
expose, criticise or influence retailers'
practices. Subsequently there is consideration
of the use of the Internet by retailers in ways
that may be seen as having ethical
implications, both positive and negative.
Specific ethical issues relating to Internet
The author retailing and e-commerce are briefly
identified, and the key issue of privacy and e-
Paul Whysall is Professor of Retailing at Nottingham
commerce examined in more depth.
Business School, Nottingham Trent University,
Nottingham, UK.

Keywords
Example 1: The Gap

Retailing, Ethics, Internet, Privacy The clothing retailer The Gap demonstrates
something of the range of Internet-related
Abstract problems that a retailer perceived as acting
unethically may come up against. The Clean
The Internet has important ethical connotations for
Clothes Campaign Web site has contained a
retailing. This paper briefly provides examples of retailers'
number of references critical of The Gap's
difficulties in this respect, before considering use of the
Internet for ethical scrutiny of retailers by a spectrum of
sourcing policy, including the text for a letter
activists and agencies. Positive use of the Internet to
of protest to be sent to the company's CEO,
publicise retailers' social responsibility contrasts with
and a sample of the response from the
questionable exploitation of the Web's anonymity. The
company. Similarly critical materials have
Net not only offers freedom of speech, but also widens appeared on the Corporate Watch, LaborNet
opportunities for irresponsible activity, with low barriers and Sweatshop Watch Web sites, as well as
to entry. Thus tensions exist between rights and more anarchic sites such as ``cynical.com''.
freedoms, on the one hand, and abuses of freedoms, The ``global exchange'' site has included a
provoking calls for regulation, on the other. Ethical issues review of The Gap's annual shareholder
relating to e-commerce are identified, and privacy is meeting which was seen as avoiding protests
highlighted both as central to the ethics of e-retailing and by being held in rural Tennessee, and also
as a critical factor in its development. While retail interest calls to demonstrate against The Gap in
in the Internet thus far has focused around e-commerce, Oakland, California over its alleged
impacts on retailer image ± both positive and negative ± exploitation of workers in Mexico and Saipan.
should also be recognised. More balanced evaluations of the company's
overall ethical performance also exist, such as
at the Students for Informed Career
Electronic access
Decisions (SIDC) site at Stanford University,
The current issue and full text archive of this journal is which both lists positive aspects of the
available at company and notes areas for improvement.
http://www.emerald-library.com Then there was a hoax chain e-mail ± which
came to take on several forms (http://
www.stiller.com/gap.htm) suggesting that
The Gap would give free clothing to everyone
receiving the e-mail in order to ``beta test'' an
International Journal of Retail & Distribution Management
Volume 28 . Number 11 . 2000 . pp. 481±489 e-mail tracking device. Users were to e-mail
# MCB University Press . ISSN 0959-0552 The Gap's PR rep to take up the offer. Copies
481
Retailing and the Internet: a review of ethical issues International Journal of Retail & Distribution Management
Paul Whysall Volume 28 . Number 11 . 2000 . 481±489

of the hoax e-mail are still to be found across Body Shop in need of repair''), conference
the Internet, even if often now intended to papers (Quinn and Petrick, 1996) and
expose the hoax. However, the initial hoax academic journal articles (Russo and Fouts,
was obviously intended to embarrass and 1997). And, perhaps inevitably, the Body
``punish'' the company. Shop was forced to reply through similar Web
And do such campaigns work? Well, The media (``A matter of faith''). Appropriately,
Gap's own Web pages contain a lot of Kirk Hanson's social evaluation of the Body
information about the company's social Shop, which represents the company's
responsibility, including information about its response to criticisms through an
environmental policies, its community independent external audit, is also accessible
relations programme in such areas as AIDS on the Web.
prevention, substance abuse, and Another major area of related activity was
homelessness, as well as the Gap Foundation, on e-mail discussion lists, where Entine's
its charitable arm. It also hosts a page on contributions sparked heated debate over an
stopping sweatshops. The significance of invitation to Anita Roddick (founder and then
these public statements is, however, perhaps CEO of Body Shop) to address the Academy
likely to be a matter of individual opinion. of Management Conference. In discussion
groups such as the BUSETH-L list and the
Socially Responsible Business Mailing List,
Example 2: Jon Entine and The Body Entine's criticisms reverberated. On the
Shop Organizations and the Natural Environment
(ONE-L) list interventions by Entine and
In 1994, the investigative journalist Jon others resulted in new citations of ``Body
Entine published an article which made many Shop'' peaking several times such as in May/
criticisms of The Body Shop in a relatively June 1995 (106 mentions) and November
obscure American journal (Entine, 1994). 1995 (77 mentions). That the Body Shop
Attempts were made by the company to came under widespread ethical scrutiny and
prevent the accusations being published in the criticism was substantially a result of
UK, although several newspaper articles exploitation of the Internet's capabilities to
subsequently appeared which summarised transcend boundaries with low barriers to
many of Entine's main criticisms (Whysall, entry.
1998).
However, legal attempts to prevent Entine's
criticisms spreading across conventional print Ethical scrutiny via the Internet
media were soon outflanked by developments
on the World Wide Web, as a Web search for Badaracco and Useem (1997) introduced the
``Entine'' is still likely to reveal. Entine himself concept of ``Internet vigilantes'' in an analysis
was a major contributor here, with variations of Intel and the Pentium chip, and that idea is
on his criticisms appearing on sites such as the mirrored in growing ethical scrutiny of
Utne reader (``Green Washing''), Brazzil retailers via the medium of the Net. A major
(``The Queen of Bubble Bath''), BWZine change has occurred in the ways in which
(``The Messy Reality of Socially Responsible ethical standards and performance of retailers
Business''), and the Electronic Journal of can be scrutinised and publicised as a result of
Radical Organization Theory (``The Curse of the Internet. Increased access to global
Good Intentions''). Entine's claims also audiences through the World Wide Web
generated widespread comment which again means that widespread exposure for criticisms
spread quickly across the Web, including of corporate performance is achievable using
articles carrying titles such as ``Body Shop relatively modest computing resources. In the
scrutinized'', ``What's wrong with the Body area of retailing, this has increased
Shop?'', and ``Can the Body Shop shape up?'' significance, given that it also coincides with
Entine's criticisms further provided inputs for an era in which it is widely argued that there
Web-published papers on, for example, has been a shift of power to consumers. The
corporate governance (``Taming the combination of ethically aware consumers,
corporate beast'') and animal rights with increased power to influence retailers,
(``Controversial remarks by AR Journalist'') as and the Internet's capability and traditions for
well as Web-published student essays (``The global campaigning represents a major threat
482
Retailing and the Internet: a review of ethical issues International Journal of Retail & Distribution Management
Paul Whysall Volume 28 . Number 11 . 2000 . 481±489

to any retailer perceived to be acting themes include those of Co-op America and
unethically. Sweatshop Watch.
Another focus for campaigning sites on the
Internet is the fair trade movement, which
Internet campaigns against retailers' broadly aims to generate more equitable
ethical performance returns to producers in the developing world.
This area of activity on the Internet manifests
While Entine perhaps represents an example itself in several forms, such as promoting
of an individual campaigning against what he ``ethical'' retail outlets selling fair traded
sees as corporate misbehaviour, other produce (e.g. Out of this World) and using
campaigns against retailers on the Internet the Internet to sell fair traded products (e.g.
have been group activities. An example of co- Traidcraft), as well as promoting the wider
ordinated Internet activity focused around the issues of fair trade (e.g. IFAT, TransFair
McDonald's trial ± frequently termed the USA). A similar area of activity is that of the
``McLibel'' trial. The McSpotlight page Green movement. Environmental themes are
fronted a well-organised network of sites. raised on the Internet by many activist groups
Internet magazines (e.g. Albion Monitor) made (e.g. Envirolink), while the London Animal
further materials available, while the Action Group's pages have attacked The
Envirolink site offered some 300 press Boots Company for involvement in animal
cuttings relating to McDonald's activities testing (which may or may not be interpreted
from around the world (Whysall, 1997). as a Green issue, of course). Major retailers
Nor is it only individual activists that have have also come under co-ordinated attack
realised this potential of the Internet. Oxfam, across a number of issues, such as Wal*Mart,
the leading charity and also a retailer in its criticised inter alia for its effects on traditional
own right, also developed an impressive Web retail locations, environmental impacts,
resource focusing attention on its ``Clothes employment practices and overseas sourcing.
Code Campaign'' which aimed to raise
awareness of the production conditions, often
in the Developing World, in which garments A spectrum of Internet vigilantes?
being sold on the high street are frequently
produced. In fact this is but one of a number What seems to emerge from the examples
of similar campaigns which have had a above is a spectrum of attempts to publicise
presence on the Web, including a site retailers' perceived ethical lapses, by targeting
sponsored by Christian Aid attacking UK them, their customers and other stakeholders
supermarkets' Third World sourcing policies. and policy makers through Internet
The Netherlands-based ``Clean Clothes campaigns. The spectrum stretches from
Campaign'' is a particularly interesting case. ``lone voices'', to co-ordinated campaigns, to
CCC has developed pan-European activities, new initiatives by well-established groups:
specifically targeting major clothing . First, there are individuals using the
manufacturers and retailers through the Internet to expose perceived
Internet. That there may be dangers or shortcomings of retailers. Jon Entine's
difficulties here has been recognised on the widely reported criticisms of The Body
Campaign's own pages, where this reflection Shop, Ben & Jerry's and others are good
on an earlier campaign which targeted C&A examples here. However, Entine's
in The Netherlands has appeared: background in investigative journalism
Though we succeeded in showing the public the contrasts with some other individuals
way the garment industry is organised by using whose motives in attacking retailers may
C&A as an example, the public seemed to think be more personal and even vindictive.
that C&A was the only ``wrong'' garment retailer . Campaigns with a specific Internet-focus,
in Holland.
such as the ``Clean Clothes Campaign'',
Nevertheless, the CCC Web site has have developed in recent years.
continued to target both manufacturers (e.g. . Then there is use of the Net as a co-
Nike) and retailers, particularly through ordinative forum, as with the ``McLibel''
challenging the claims of such as Esprit, The case in the UK or anti-Wal*Mart
Gap and Levi Strauss to be ``socially campaigns in the USA. The Corpwatch
responsible''. Other sites addressing related site fulfils a similar role. The Sprawl
483
Retailing and the Internet: a review of ethical issues International Journal of Retail & Distribution Management
Paul Whysall Volume 28 . Number 11 . 2000 . 481±489

Busters page co-ordinates contributions reinforce the view that responsible activity is
around a particular issue of concern. to be demanded, and if that is not perceived
. Other established areas of political then there are likely to be calls for regulation
activism have seen campaigners quick to and intervention. Clearly, though, many
add the Internet to their avenues for retailers see the Net as a medium for the
harassing prominent retail companies on promotion of a socially responsible image. In
issues like animal rights or the earlier example, it was seen that The Gap
environmentalism. also engages in such activity, but in that case
. Extension to the Internet of the activities perhaps it is partly at least as a response to
of established campaigning groups such Internet attacks and criticisms.
as major charities (e.g. Oxfam) and Conversely, for some businesses, the
religious organisations (e.g. Christian placeless nature of a virtual mall may offer
Aid) represents a welding of new advantages of anonymity, and amidst the 41
technology to well established practices in outlets in iMALL's clothing pavilion in 1997
the mainstream of social concern. were five selling ``exotic'' items such as
lingerie and leatherwear. Other pavilions were
The Internet offers greatly increased potential
less like mainstream retail locations, such as
for ethical scrutiny of retailers, and for that
the Home and Personal Security area where
scrutiny increasingly to be communicated to
alongside more typical security products (e.g.
articulate and informed consumer segments.
fire precautions, safes, home security)
However, it also has a potential for customers could also buy bullets, stun guns,
irresponsible use and, should that be seen to and pepper blasters (Whysall, 1997). The
be occurring, then calls for tighter regulation scale of activity of pornographic businesses on
and legal intervention are likely to increase. the Web is generally accepted as proven and
problematical, although attempts to control
have, as yet, proven ineffectual (McLeod,
Retailing on the Internet 1995; Orlowski, 1996; Studeman, 1996).
Nonetheless, the reach, scope, and user-
For retailers, the Internet presents new, profile of the Internet, together with the
widely debated ± and perhaps even anonymity of retail cyberspace, create ethical
over-hyped ± opportunities (Rowley, 1996; challenges and attract activities that are likely
Doherty et al., 1999). For some, it threatens to continue to promote calls to restrict and
fundamental changes in retailing's role regulate its content and activity.
(Alsop, 1999); for others, implications extend Several issues of an ethical nature continue
far beyond the Web itself (Gurley, 1999). to cast a shadow across the development of
This next part of this paper addresses ethical e-commerce, issues which may take on an
considerations of retailers' use of the Internet. enhanced significance if, as has been
Several examples of major retailers suggested (Donthu and Garcia, 1999),
publicising their ``good works'' and ``good Internet shoppers are less risk averse than
intentions'' through Web sites were identified non-Internet shoppers. Among these,
in 1997 (Whysall, 1997). Corporate mention may be made of:
environmental awareness has been publicised . Continuing consumer concerns about the
on the Internet by major retail companies security of Internet transactions (Fram
(e.g. McDonald's, Wal*Mart). Then there and Grady, 1997; Industry Canada,
were retailers specifically providing 1998; Rowley, 1998).
employment for disadvantaged groups (e.g. . Conversely, companies need to protect
Goodwill Industries International). themselves in areas of data integrity,
J C Penney's pages highlighted that confidentiality, and authenticity of data
company's ``partnership program'' which (Forcht and Wex, 1996).
develops links with suppliers in order to . Concerns for the apparent lack of a
increase opportunities for minority- and legal framework for e-commerce
women-owned businesses. A feature of (Richards, 1997), especially in an
several retailer sites was a focus on children international perspective. Thus the idea
and young people and educational themes. of pan-European Internet-based retailing,
While this is a reasonable reflection of which might seem highly compatible with
Internet users, perhaps, for some it may the idea of a single European market,
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Retailing and the Internet: a review of ethical issues International Journal of Retail & Distribution Management
Paul Whysall Volume 28 . Number 11 . 2000 . 481±489

requires reconciliation between . The need for clear distinctions on Web


consumers' rights to seek legal redress pages between ``editorial'' content and
within their own country regardless of the advertising content (Berry, 1997).
geographical base of the vending . Concerns that some segments of
company, on the one hand, and fears that consumers may be disadvantaged by
such a provision would imply heavy costs relatively lower levels of Net access; an
for e-traders, especially smaller example of concern of this type has been
businesses, and thus act to deter the the suggestion that consumers in rural
growth of electronic retailing, on the areas of the USA may suffer from a lack
other. Then there is the question of of affordable access to high-speed, or
whether a company launching a broadband, networks (Lerner, 2000).
pan-European Web site should need to . Particular sectoral concerns, for example,
comply with defamation, advertising, and in relation to pharmacy retailing on the
competition laws in each member Internet (Gallanis, 1999), or traditional
country, with potential threats such stores generally (Grande, 1999).
that any EU-based site accessible in . Worries that apparently unbiased Net
Germany could not offer lifetime searches may in fact be dominated by
guarantees on products or make paid advertisers (Wolffe, 1999).
two-for-the price-of-one style offers . Matters of intellectual copyright,
(Hargreaves, 1999a, 1999b). Similar including the use of ``pirated'' names of
concerns about compatibility with laws in well-known brands and companies (e.g.
other countries have been expressed in McDonald's, Levi's), misspellings of
North America, where it has been leading brands, and registration of names
suggested that transactions need not have in foreign domains (Abel, 1998).
a monetary element to raise such
. The view that the speed of change in
concerns, and merely information fields like e-commerce is such that moral
collection exercises may represent reflection is unlikely, and thus standards
material concerns (Chain Store Age, of corporate morality may be allowed to
1999). slip (Useem, 2000).
. The use of Internet cookies, whereby
. The existence of fraudulent ``Internet-
visitors to a site have electronic data offered scams aimed at consumers''
placed on their computers which record (Bowe, 2000).
the user's e-mail address, which parts of a However, it is probably on aspects of privacy
site were visited, and so forth. While that most concern has been focused.
companies may argue that this assists
them to understand their customers
better, and is thus a step towards better Privacy Issues in Internet retailing
service, for others it represents a threat to
individual privacy (McCune, 1999). A Privacy issues pertaining to retailing on the
major controversy developed after it was Internet mirror many wider concerns
revealed that Doubleclick, a leading surrounding the ethics of marketing with new
Internet advertising network, launched a technologies (Foxman and Kilcoyne, 1993;
service to trace individuals across some Bloom et al., 1994; Pearce, 1997; Schwartz,
11,500 Web sites (Kehoe, 2000). 1998). To Pitt et al. (1999), the ability to
. Worries that the ease by which a user may undertake ``electronic eavesdropping on
``subscribe'' to an offer on the Internet customers' conversations'' allowed positive
may make it easier for personal details to benefits to service marketing on the World
be collected, and potentially exploited in Wide Web, and undoubtedly there are such
unwelcome and intrusive ways (Warner, benefits to be gleaned. However, to others
1999). Linked to this may be cost this also represents a potential threat. It is
reductions arising from Internet nearly a decade since Jones (1991) warned of
communications, and the potential to use challenges to privacy and discussed
database information for purposes other implications of calls for regulation as a result
than its intended application (Morris- of the growth of information-based
Lee, 1996). businesses, and clearly many of the assumed
485
Retailing and the Internet: a review of ethical issues International Journal of Retail & Distribution Management
Paul Whysall Volume 28 . Number 11 . 2000 . 481±489

benefits of the Internet derive from its of bringing a regulatory framework to an


efficient use of, and access to, information. anarchic situation, at the same time seeking a
Yet, with perceived benefits of reduced costs, framework that will maximise the possibilities
better access to consumers, and better of innovation and creativity''.
consumer information also come challenges. Lawrence Lessig, Professor of Law at
Traders have well established means to Harvard University, has emerged as a leading
``track'' consumer transaction information, authority in the area of government regulation
through scanner data, financial data, and the and cyberspace. Lessig (1999) argues against
like, but Internet tracking for some raises new the view that cyberspace defies regulation,
challenges of personal privacy rights: and to the contrary posits that the libertarian
We need to balance the free flow of information nature of cyberspace is under threat from the
appropriately with individuals' right to privacy in combination of commerce and government,
ways that do not sacrifice the benefits electronic as well as the invisible hand of technology.
commerce promises (Wellbery and Wolfe, 1998,
Apathy or inaction will, in Lessig's view,
p. 13).
result in these special interests shaping the
The ability to link computerised databases emergent medium, and thus he argues that
from such as loyalty cards to Internet the architecture of cyberspace needs to be
technologies adds further to the privacy appropriately ``coded'' to address key issues
concerns of some commentators (Evans, concerning freedom of speech, intellectual
1999; Janoff, 2000). property, and privacy.
Reda (1998) suggests that the answer to There are practical, commercial
persistent consumer concerns about Internet considerations here, also. Alba et al. (1997)
privacy lies in ``being up front with shoppers'' see the collection of detailed information
about information capture and use, giving about consumers' needs and behaviour as
consumers a reason to share personal data, central to the development of interactive
and having established and publicised privacy home shopping, but point out that it remains
policies. Miyazaki and Fernandez (2000) questionable to what extent consumers will be
demonstrated a positive relationship between willing to make such data available and thus
the percentage of privacy- and security- see a need for e-retailers to explore strategies
related statements on Web pages and to assure potential customers that personal
consumers' likelihood to purchase across data will not be misused.
several shopping categories. However, a In ethical terms, it seems that a trade-off is
Federal Trade Commission survey in 1999 developing between a utilitarian vision of a
found that, while 87 per cent of retail sites on secure, but ``information efficient'', electronic
the Internet collect personal information on marketplace, and the individual rights and
consumers, only 13 per cent of the retailers freedoms which characterise the perceived
actually disclosed the practice (Chain Store traditions of free, open, and possibly anarchic
Age, 1999). cyberspace. The former may bring trading
There exists a crucial tension in respect of benefits to both e-retailers and Net shoppers,
two contrasting aspects of the Internet. but the rights to privacy of the latter ± as well
Waldmeir (2000) paraphrases the view of as their need for actual and perceived security
``Internet pioneer'' Dave Farber thus: ± should not be ignored either on ethical or on
But anarchy and maturity seldom co-exist for commercial grounds.
long, and anarchy and commerce make worse
companions.
So, as the Internet grows, its anarchist origins
come under threat. Concluding comments

Venkatesh (1998) identifies a similar duality The opportunities that the Internet presents
in the extension of commerce to cyberspace, to those seeking to scrutinise and criticise
contrasting the marketing/profit seeking firms' ethical performance are a valuable asset
perspective of cyberspace with the view of for all with a concern for high standards of
cyberspace as a place to exercise freedoms ethical behaviour in business. The low
and establish identity. To Duquenoy et al. barriers to entry which typify Internet
(1999), who like Venkatesh develop a view publication similarly can be seen as favouring
derived from Habermas' theory of discourse wider access and enhanced freedom of
ethics, ``Modern society is also in the process speech. However, the positive benefits
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Retailing and the Internet: a review of ethical issues International Journal of Retail & Distribution Management
Paul Whysall Volume 28 . Number 11 . 2000 . 481±489

portrayed here can also have a negative side. many of the conclusions have far wider
The freedom created for those who wish to implications for business ethics and the
exercise ethical scrutiny is also available to Internet. The critical, liberal and open
less principled agents, whom some authors traditions of the Internet are one of its
see as prominent members of Web strengths, but only through responsible use
communities and against whom companies will those traditions escape calls for greater
are often ill prepared (Reed, 1999). It is regulation or more intervention.
probably no coincidence that, when in 1997
three retailer sites were identified as having
significant legal elements pertaining to
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Retailing and the Internet: a review of ethical issues International Journal of Retail & Distribution Management
Paul Whysall Volume 28 . Number 11 . 2000 . 481±489

Hanson on The Body Shop: Sweatshop watch: http://www.sweatshopwatch.org/


http://www.the-body-shop.com/aboutus/ swatch/index.html
values.html ``Taming the corporate beast'':
http://www.labornet.org/alerts http://www.utne.com/lens98/society/
http://www.mcspotlight.org/media/press/
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msc2of2_16mar98.html
``The Body Shop in need of repair'':
http://www.stanford.edu/group/SICD/IFAT: http://
www.ifat.org/ http://www.abo.fi/fak/esf/nat/hem/enveco/papers/
London Animal Action: http://arrs.envirolink.org/LAA/ nghi2.html
boots.html ``The curse of good intentions'':
``McSpotlight'': http://www.mcspotlight.org/home.html http://www.mngt.waikato.ac.nz/depts/sml/
Out of this World: http://www.ootw.ndirect.co.uk/ journal.entine2.htm
Oxfam Clothes: http://www.oneworld.org/oxfam/ ``The messy reality of socially responsible business'':
campaigns.html http://www.betterworld.com/BWZ/9512/cover2.htm
People for Fair Trade: http://vic.uca.org.au/people/fairtrad/ ``The queen of bubble bath'':
links.html http://www.web.apc.org/~bthomson/other/
Quinn and Petrick's paper:
fair8161.html
http://www.sbaer.uca.edu/docs/proceedings/
Traidcraft: http://www.traidcraft.co.uk/
96usa087.txt
TransFairUSA: http://www.transfairusa.org/why/
Russo and Fouts' paper:
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Sprawl Busters: http://www.connix.com/~fndssayb/ http://ursus.jun.alaska.edu/archives/buseth/
sprwlbst.htm msg00060.html

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