Retailing Giant Makes Big Move with Love, Earth Jewelry Line

Ability to trace origin of material and labor used in goods will be replicated in other Wal-Mart products.

By Laura Kennedy, Researcher-Reporter, the Kiplinger letters

October 6, 2008

Wal-Mart's newest foray into sustainability will raise the bar again for rivals on environmental standards and consumer interaction.

The retail giant's Love, Earth jewelry line is blazing a trail on socially responsible consumer goods. Consumers who buy items in the Love, Earth line can trace the origins of the materials and labor used. Suppliers of the metals and gemstones must meet sustainability criteria on health and safety performance, pollution, protection of ecosystems, employee rights and more.

Consumer involvement sets the program apart: each piece of jewelry comes with a batch number, allowing shoppers to track their purchases' path by typing the batch number into an online portal.

Later down the road, expect the retailer to extend the concept to other products in its stores. Good bets include cotton clothing, coffee, furniture, toys and foods of all sorts.

Competing retailers as well as brand-name manufacturers will follow suit. Similar programs will help retailers foster better relationships with their customers who are increasingly drawn to retailers and brands that can tout their social and environmental responsibility.

The expanded traceability movement creates openings for manufacturers that set standards regarding sustainability and social awareness. Wal-Mart has announced partnerships with two mining companies and a jeweler for Love, Earth and plans to expand that list.

Supply chain system managers will also benefit. Wal-Mart is using a software service called String, developed by the U.K.-based firm Historic Futures Ltd., to make the Love, Earth pieces traceable. More forays into sustainability and traceability will also generate business for social auditors that take stock of a company's responsible business practices.

Consumers also can trace the supply chain for a few other products. For example, for a fee, shoppers who buy diamonds certified by the Canadian Diamond Code of Conduct can authenticate by phone or email that their diamond came to them through an environmentally and socially approved supply chain. In the U.S., the South Dakota Certified Beef program will soon include a verification number on its beef labels that allows consumers to trace the beef they bought back to its farm of origin.

Shopper trust in retailers and suppliers has been eroding amid product safety worries. But these efforts will help retailers and their suppliers reestablish credibility with consumers and open up new lines of communication.

In the long run, open traceability will also allow companies to keep better track of their carbon footprints, water use and other environmental impacts of their business practices.

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