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Selling Progressive

Ethical, right down to your American Apparel knickers

Some go kicking, some go screaming. Some go because they are told. And some go because it makes them feel good about themselves.

When it comes to shopping, so long as the store is right, Seth LeSnow finds himself feeling good.

"I love it," exclaims LeSnow, referring to the American Apparel boutique he and his girlfriend are about to leave. The store itself is at the threshold of two historic Montreal neighbourhoods, ethnically diverse, edgier Notre-Dame-de-Gr?ce and tony Westmount, a haven for the city's elite. There's a Starbucks next door, and a Second Cup across the street. The restaurants around here offer valet parking, and, on Saturday afternoons, you can spot silver-haired women walking corgis dressed in miniature tweed vests.

LeSnow's girlfriend, Leanne Bergman, is carrying the bag with the four T-shirts the couple has just bought. "Two each," she says smiling. LeSnow, 27, tells me that, between the two of them, they spend about $2,000 a year at various American Apparel outlets. It's the people who work there, the youthful atmosphere, even the music that keeps LeSnow coming back. He speaks with an enthusiasm that seems to embarrass his girlfriend.

"You get excited when you go?" I ask him.

"I do. I get excited when I go," admits LeSnow, without a trace of sheepishness.

The store, like the clothes they sell here, has a certain austere quality. It is brightly lit, the floor and walls are white, and the racks are at generous distances from each other. The walls are decorated with vintage covers of Life magazine: the Kent State shootings, Jackie Onassis, Gandhi-all looking down on shoppers, as they sift through the assortment of T-shirts, polos and hoodies.

American Apparel is the brainchild of Dov Charney, a Montreal native who, seven years ago, started a clothing company dedicated to making classic T-shirts. The T-shirt, according to American Apparel, was "once an icon of Western culture and freedom."

The company's central selling point is that their clothes are made in "downtown LA, sweatshop free." It's a claim emboldened by its conspicuous presence on storefront windows, in company literature, and indeed anywhere you might find the American Apparel logo.

LeSnow says the sweatshop-free aspect is a big part of why he enjoys shopping at American Apparel so much, and he is certainly not alone in being taken in by the company's image as the shit-disturbing corporation, the anti-brand brand. The company grew by 107 percent in 2003, its profits have increased fourfold in the last three years, while its sales were expected to top US$140 million in 2004.

American Apparel has become a feel-good business story. Company profiles have appeared in the New Yorker and on CBC News, in Jane magazine and the Globe and Mail. Common to them all is a fixation with the novelty of a profitable socially conscious retailer and the quirky business sense with which Charney guides the company. There is no mistaking the image this company wants to project. Progressive. And why not? Progressive sells.

If the eighties saw materialism run rampant, and the nineties saw a return to the self, the first decade of the twenty-first century is shaping up to be a time of social awareness, a time when caring has become cool again. The rumours of war bring millions to the streets, a tsunami hits and a global community responds like never before-in a world where information is the new global currency, injustice has a shorter lifespan. This is the connected generation.

It is the genius of capitalism to be able to be everything to everyone, and yet, to be different things at different times. When the Material Girl ruled, the markets obeyed, as they did when the "I" became king. Likewise, companies are now getting connected; businesses like American Apparel are popping up, ready to sell progressive to a new breed of socially aware consumers. These companies have radically different business models that are dedicated to meeting the demand for progressive products. And, to ensure this demand is sustained, these companies are turning to the next wave of identity marketing-branding ethics.

As a concept, identity marketing is not new. The idea that consumers are more interested in a brand than the products themselves dates back to the early nineties, but it wasn't until the publication of Naomi Klein's No Logo: Taking Aim at the Brand Bullies in 2000 that the general public really became aware of what the rise of the brand actually meant.

Advertisers, marketing executives and cool hunters realized consumers had stopped caring about which product works better and, instead, were forming emotional relationships with branded products. Consumers weren't distinguishing between products, but between brands. Shoppers weren't buying based on which drink tastes better, or what shoe is more comfortable, but on which brand they identified with the most. The great marketing coup of the nineties lay in companies understanding that when you shopped, you bought into a brand identity-a set of ideas and emotions that came with your purchase.

But the revelations in No Logo also skewered the image many corporations were trying to paint for their brands. The book brought attention to the working conditions in the sweatshops used by the suppliers of Wal-Mart, Nike and Adidas, among others. No Logo helped focus a microscope of media analysis on the social responsibility of business, and ultimately No Logo became only one book in a mini-industry of protest against corporate sway.

The surge in popularity of the anti-corporate globalization movement further intensified the pressure on corporations to behave, as thousands of people regularly took to the streets to demonstrate against the financial systems that allow such abuses to take place. But, following the collapse of corporate giants like Enron and Nortel, it wasn't just dreadlocked activists that were leery of corporations: so was your mom, your high-school economics teacher and your great-uncle who had just watched his nest egg melt away. If the first axiom of identity marketing is "you are what you buy," then you better buy ethical.

Ethos Water is perhaps the company that subscribes most faithfully to this new marketing credo. Ethos is a high-end bottled water company based in Santa Monica, California. The company has been in operation for just over two years, and has already found its way onto the shelves of health-food stores across the US, with plans to expand into Canada by the end of 2006. The company maintains it doesn't just provide another choice on a rack already cluttered with Evians and Dasanis, but an opportunity to perform a good deed. "Ethos enables consumers to help children around the world through the simple act of quenching their own thirst," reads the company website.

Consumers are promised on each bottle that 50 percent of the company's profits, after taxes, is donated to helping children in the developing world get access to potable water. So far Ethos has donated about $50,000 to various water projects.

Ethos Water is a for-profit corporation, but the company has structured itself in such a way that it can donate generously, while limiting the financial liability to its enterprise. Ethos Water is actually a subsidiary of Ethos Brands LLC, and, in order to fulfill its promise, the parent company has also set up Ethos International, a non-profit organization that receives donations from Ethos Water, among others, and then, in turn, donates this money to various NGOs involved in water projects around the developing world.

Ethos International is listed as a 501(c)(3) charitable organization, which, according to the US Internal Revenue Service, allows it to receive tax-deductible donations. In other words, the profits that Ethos donates to its own charity organization are tax-deductible. Ethos International in turn donates its money to organizations like WaterPartners International, an NGO dedicated to providing clean water to communities in the developing world. Donations made to WaterPartners are also tax-deductible.

The WaterPartners board of directors includes past marketing executives for Coca-Cola and the pharmaceutical industry. The NGO solicits corporate donations by stressing the publicity value of philanthropy: "Depending on your level of support, we can establish you as the exclusive WaterPartners donor for the community."

For donations of $10,000 and up, corporations are promised, among other things, a full-page ad to promote their company's good deeds, an exclusive page on the WaterPartners website, and "audio and visual recognition" at a WaterPartners event, complete with gift presentation.

WaterPartners is selling the chance to be a progressive company. It's an advertising opportunity, where you pay others to do the good for you and still get a chance to be in the photo op.

In the nineties, brands discovered they could become cool by association, attach themselves to a celebrity and watch their sales soar. Brands sold the same notion to consumers: buy our products and you buy into cool.

However, somewhere along the way, wearing shoes made by impoverished Asian children under sinister working conditions became uncool. The kid wearing the "Child Labour" T-shirt may have been a self-righteous prick, but his accusations were clear. Sport those Reebok pumps and you have the integrity of a nineteenth-century industrialist. The advertising logic that had made brand names cool in the first place-the "Be like Mike" imperative-was turned on its head.

Young, progressive brands like Ethos and American Apparel have taken note. They're not questioning this logic, but they are changing the terms. They're not selling cool by association, they're selling good by association; to sell good, they need to craft the right brand identity, to align their brand behind the right cause. In American Apparel's case, it's workers' rights-brilliant, when you consider the sweatshop backlash against Nike and other leading apparel retailers. For Ethos, it's water projects in the developing world. These new brands aren't looking for celebrity endorsement; they're looking for the right charity.

Ultimately, it may only be a matter of demographics. The so-called tween set, the youth market, is the holy grail of brand marketers. Kids, all the way to university age, represent a lucrative target market, due mainly to their high disposable income-Mommy and Daddy's, that is. Yet the mystery remains: how do you tap into this mass of angst, puberty and hyper self-consciousness?

"It's the market which tends to be the most socially conscious. They're very idealistic, they want to do the right thing," says Lea Katsanis, a professor at Concordia University's John Molson School of Business, who is also the deputy editor of the Journal of Product and Brand Management. "As that target market continues to grow, you're going to see more of the 'feel good about yourself, you're doing the right thing' as being a part of the brand's identity."

Like Ethos, American Apparel has also worked ethical branding into its business model-its image as the rebel corporation is carefully forged. Unlike most other retailers, you won't find American Apparel outlets in suburban malls, but rather in trendy downtown neighbourhoods. Company senior partner Dov Charney says that's because American Apparel is looking for that urban connection, the company wants to be where hip young people live. "We're participating in urban revitalization," says Charney over the phone from LA one Sunday morning, "we're rediscovering neighbourhoods."

An American Apparel outlet is not even referred to simply as a store. Rather, it's a "community store and gallery," as if it were some place where commerce was incidental. Once inside, shoppers are able to peruse albums filled with pictures and testimonials from workers in the downtown LA factory where the clothes are designed, marketed and manufactured. Shoppers can also help themselves to a brief manifesto of sorts entitled "Why American Apparel?" Reason number one: "We are challenging the corporate establishment and rejecting institutional norms while remaining committed to making the best T-shirts in the world."

"American Apparel operates not in a mechanistic way; we're a community of almost 4,000 people," says Charney. "We're challenging the corporate philosophy: most clothing retailers outsource their work, we're challenging the whole concept of outsourcing," he continues. When I ask him if it's all just a marketing gimmick, he answers, "We have a US$170 million payroll. That's a pretty expensive marketing gimmick." He adds that his company, despite offering the highest wages in the apparel industry, is more profitable (on a percentage basis) than most institutional retailers.

Charney also likes to point out that his company doesn't use professional models, "they're girls I've picked up or I've met." American Apparel ads, found in places like the Village Voice, the Montreal Mirror and other alternative weeklies, have featured hustlers, strippers, company employees and even Charney's bare ass.

"As much as I want to challenge the corporate mentality, I don't believe in dated leftist thinking. We don't have to have a union to be progressive, we don't have to be unsexy," Charney tells me.

Charney's own corporate mentality assumes that simply buying a T-shirt for $30 is no longer enough, shoppers are now asking, "What else am I getting for my money?" Hence the American Apparel experience, where a purchase becomes something more intimate, "organic" in its senior partner's words.

"If I buy at Wal-Mart, I'm not going to see who's making the stuff, I'm essentially making an anonymous purchase. But if I buy from American Apparel, my purchase isn't anonymous because I can actually see and feel, I get the sense that I know the people making it, and that also becomes part of the brand's identity," explains Katsanis.

So, is selling progressive responsible capitalism or crass exploitation? Sure, companies like Ethos and American Apparel are providing alternative business models that prove you can make a profit and be a good corporate citizen at the same time. However, they are also at the forefront of exploitation-not in a conventional abused-worker sense, but in a philosophic one. These companies have positioned themselves to profit from the inner tensions the socially aware consumer feels in a free-market economy. They are capitalizing on the torment a shopper experiences when trying to make an ethical choice. A crude decoding of the marketing approach of these companies might read: Look at us. Look at our ads. We humanize our workers. We humanize consumption. Now, buy our products if you believe in humanity.

The truth is corporations are getting ready for a post-advertising age. The word from advertising agency boardrooms is that the traditional thirty-second commercial and the giant highway billboard do little to spur consumption on. Consumers have trained themselves to block out the messages, to ignore the televised mantras about the orgasmic qualities of shampoo. It's become a survival game: stick to the old ways and risk obsolescence in ten or twenty years, risk becoming the next marketing textbook example of intransigence, or find other ways of getting your company's message out, a more sustainable method of ingratiating yourself to consumers.

The ubiquitous rise of product placement is only one example of what the marketing landscape will look like in this post-advertising age. The marketplace can no longer end where the sidewalk begins; corporations now realize they must transcend the old boundaries of where and what they sell. In the absence of traditional well-defined advertising space, the brand must somehow find its way into your life. A link must be created between shopping and how you live. A company must sell you your lifestyle.

Just before Christmas, an article appeared in the New York Times, noting how many stores were trying to capitalize on that festive-season desire to help the less fortunate by setting up consumer-driven charities. The implication was clear: these stores were hoping to benefit from some of the goodwill spinoff.

The Gap was selling teddy bears for $20, with the money going to help buy coats for underprivileged North American children. Nike and other retail outlets were offering the yellow LIVESTRONG bracelets for one dollar. The bracelets, which at one point before Christmas were selling at a rate of 150,000 a day, became a trendy accessory in their own right.

"The political climate seems ready," said one source from the Times story, the chief executive of a furnishing company that is selling water buffaloes on behalf of a community in Cambodia. "People are looking for leadership and direction post-9/11. I really do believe there is a strong progressive movement building."

Certainly, corporations donating to charities is not a new concept. However, these consumer-driven corporate charity drives are. According to retail analysts, the number of retail-hosted charities has more than tripled since 2000, and has increased significantly over the past year.

There was a time when businesses used to throw in a key chain or maybe some discount coupons as a little something extra, the friendly wink that was supposed to bring you back next time. Now, when you buy something, companies throw in leadership, good will, and benevolence.

This is the commoditization of values.

Selling progressive is about giving people the option to buy into moral integrity. Hollywood stars will now pay for "green-living consultants," somebody to help them live more ethically. Danny Seo is one such consultant or "eco-stylist." The former environmental activist-cum-author now makes a six-figure salary helping models and actors build chlorine-free pools or buy non-conflict diamonds. Needless to say, he is planning to launch a reality-TV series in the near future.

Tucked in the middle of the Times story is this quote from an unnamed retail executive: "We have to think of our customers first and charity second. Anything to drive business in this challenging economy is good, and if it makes everybody feel good, so much the better."

It underscores the notion that progressive is marketable. Young companies like Ethos and American Apparel know this and have tied their sales figures to the hope that consumers will continue to feel disenfranchised by the actions of major corporations and governments. From the greed-driven eighties to the caring-is-cool trend of today, this is capitalism coming full circle, letting you buy into an ethos. Who knows, perhaps soon enough the pimply teenager behind the counter at McDonald's will be asking, "Would you like to super-size that donation to charity?"

But, at the end of the day, progressive may just be another trend. Professor Katsanis thinks so, "We have these periodic blips of social awareness, these things go in cycles."

So there it is, your choice of values is on sale now, get them while supplies last.