Since the 1980s, the outsourcing of labour-intensive production, increased trade liberalization, and deregulation of national economies have facilitated the rise of fragmented production and geographically dispersed global supply chains (Lund-Thomsen 2013). In consumer industries such as the garment industry, supply chains have become so complex that even the lead firms themselves have difficulties naming the suppliers involved in production (Boström et al. 2012; Doorey 2011)—let alone knowing about sustainability conditions at the suppliers’ production sites (e.g., Egels-Zandén 2007). The rise of global supply chains has allowed many of the “consequences of MNC actions not to be traceable back to their original causes” (Zyglidopoulos and Fleming 2011, p. 695). This, in turn, has “enabled corporations to locate unethical activities in countries where they would not be readily visible” to stakeholdersFootnote 1 that “might have otherwise objected to such activities” (Zyglidopoulos and Fleming 2011, p. 696).

The possibility of embedding, through outsourcing, questionable practices in opaque supply chains has been challenged by anti-sweatshop campaigns (Bartley 2007). These campaigns have attempted both to hold lead firms (such as Nike, Adidas, and H&M) responsible for working conditions at their suppliers (Bartley 2007) and to force lead firms to increase the transparency of their supply chains (Doorey 2011). Stakeholders emphasize increased transparency in global supply chains because such transparency allows independent organizations to monitor working conditions at production sites (Laudal 2010). This is perceived as important, since stakeholders distrust corporate-disclosed information about working conditions at suppliers (Toppinen and Korhonen-Kurki 2013).

Companies have responded to these anti-sweatshop campaigns both by proclaiming themselves responsible for working conditions at their suppliers and by adopting various private regulatory systems (such as codes of conduct, sustainability certifications, and factory audits). While these private systems have spawned a multibillion dollar industry (Egels-Zandén and Merk 2014), their merits have been strongly debated. While some have found marginal improvements in some sustainability issues at production sites (e.g., Barrientos and Smith 2007), others have questioned the ability of such systems, especially codes of conduct, to achieve even such marginal improvements (Locke et al. 2007).

Compared with increased responsibility, companies have been more reluctant to respond to demands for increased “supply chain transparency.”Footnote 2 Although some scholars note a trend toward increased transparency in relation to sustainability more generally, until recently, companies have resisted calls for increased supply chain transparency, claiming that it could erode competitive advantages and that information about factories is of great proprietary, economic, and competitive value (Doorey 2011). This might be changing, however, with companies (such as H&M in 2013) starting to publish the names of all their first-tier suppliers.

The scholarly conversation about supply chain transparency is limited in three main ways. First, a key assumption in existing literature is that supply chain transparency “can empower information users to exert influence on the disclosers” and “become a tool for holding powerful actors accountable” (Dingwerth and Eichinger 2010, p. 74). Supply chain transparency is, thus, presented as a way to make private regulatory systems (such as codes of conduct and auditing) more meaningful by increasing the pressure on the disclosing firms (Doorey 2011; Iles 2007; Laudal 2010).Footnote 3 Few studies, though, examine whether consumers in practice leverage increased supply chain transparency as a tool for holding disclosing firms accountable, making private regulatory systems more meaningful.

Second, increased supply chain transparency is presented as a promising way for firms to improve their legitimacy (e.g., Bhaduri and Ha-Brookshire 2011; Carter and Rogers 2008). Studies have found that supply chain transparency positively influences consumers’ purchasing intentions (Bhaduri and Ha-Brookshire 2011) and willingness to buy products in experimental settings (Bradu et al. 2014). Still, few studies examine whether supply chain transparency in practice influences consumers’ willingness to buy products.

Third, while several conceptual studies have analysed supply chain transparency (e.g., Mol 2014) and selected empirical studies have conducted either experiments or general interviews with consumers (e.g., Bhaduri and Ha-Brookshire 2011; Bradu et al. 2014), few empirical studies have examined actual corporate attempts to increase supply chain transparency (see Doorey 2011, for an exception). There is clearly a need for more empirically grounded studies of supply chain transparency in general (Egels-Zandén et al. 2014) and, in particular, as Bradu et al. (2014, p. 10) frame it, a need for more supply chain transparency research “in the natural context” rather than in “artificial” environments.

These gaps are filled by asking: “How do consumers in practice leverage increased supply chain transparency to pressure the disclosing firm (RQ1)?” and “How does increased supply chain transparency in practice influence consumers’ willingness to buy products (RQ2)?” In other words, it is asked whether supply chain transparency can make private regulatory systems more meaningful through increased consumer pressure and/or whether it can increase corporate revenues. This is done based on a study of the attempt of Swedish company Nudie Jeans Co (henceforth, “Nudie”) to become “the most transparent company in the world.” This study draws on interviews with Nudie headquarters and store representatives and on data from visitors to Nudie’s website.

In doing this, this study contributes to the literature about supply chain transparency by demonstrating that consumers, at least in the Nudie case, do not seem to leverage increased transparency to pressure firms but, instead, when exposed to increased transparency, are almost twice as willing to purchase products. This study thus demonstrates that supply chain transparency is a useful corporate tool for increasing revenues, but hardly an effective consumer tool for improving sustainability.

Supply Chain Transparency as a Corporate or Consumer Tool?

Defining Supply Chain Transparency

Transparency has emerged as a central concept for both public and private organizations over the last two decades (e.g., Garsten and Montoya 2008). This is true in general, but also in relation to sustainability, where transparency is presented as highly desirable (e.g., Augustine 2012; Dubbink et al. 2007). Corporate transparency in relation to sustainability can manifest itself in, for example, sustainability reports (Hahn and Kühnen 2013), sustainability certifications (Bartley 2007), and environmental product declarations (Schau and Fet 2008). With stakeholders’ sustainability focus increasingly emphasizing sustainability issues in opaque supply chains (Zyglidopoulos and Fleming 2011), “supply chain transparency” has also gained prominence (Mol 2014).

Supply chain transparency, though frequently discussed in the scholarly literature, is often inconsistently defined (Egels-Zandén et al. 2014). Still, two main dimensions of supply chain transparency are outlined in existing literature. First, some scholars equate supply chain transparency with traceability, i.e., the ability to track a product’s flow throughout the production process and supply chain. For example, Doorey (2011) and Laudal (2010) discuss “transparency” in terms of disclosure of the names of the suppliers involved in producing a product. Corporate examples of this dimension include Nike, Adidas, and H&M, which have disclosed the names of their first-tier suppliers (cf. Doorey 2011), as well as companies such as All American Clothing Co that allow consumers to trace the flow from the cotton field and onward through a “traceability number” in each pair of sold jeans.

Second, other scholars stress that supply chain transparency is about disclosing sustainability conditions at suppliers (Cramer 2008). An example of this dimension is the multi-stakeholder initiative the Fair Labor Association (FLA), which publishes complete factory audit reports for specific suppliers, though not disclosing their names. In this paper, these two dimensions are synthesized and “supply chain transparency” is defined as comprising disclosure of both supplier names and sustainability conditions. A fully transparent company therefore discloses the names of all its suppliers and the sustainability conditions at each of these suppliers.

While the corporate examples above illustrate how the traceability and sustainability dimensions can be unrelated, several companies are attempting to combine the two. For example, Patagonia, often presented as a leader in supply chain transparency (Wagg 2012), and the Swiss company Switcher publish both supplier names and factory audits on their websites. Still, neither of these firms discloses the names of all suppliers involved in the supply chain nor the factory audits of all disclosed suppliers, i.e., neither of them is fully transparent.

Supply Chain Transparency as a Consumer Tool

Supply chain transparency is often presented as a way to allow stakeholders, such as consumers, to make informed evaluations of firms’ products and practices (cf. Chapman 1995). As Martinez and Crowther (2008, p. 19) put it in relation to transparency more generally, “transparency, as a principle, means that the external impact of the actions of the organization can be ascertained from that organisation’s reporting.” Because it reduces information asymmetries between firms and stakeholders, supply chain transparency is said to be a way to empower stakeholders to hold firms accountable for their practices (Dingwerth and Eichinger 2010; Hess 2007). In other words, by allowing the “consequences of MNC actions” to be “traceable back to their original causes” (Zyglidopoulos and Fleming 2011, p. 695), stakeholders, such as consumers, are expected to object to unsustainable activities. In this way, supply chain transparency is presented as a tool for shifting power from the disclosing firm to stakeholders (Martinez and Crowther 2008).

Such stakeholder empowerment and power shifting are, in turn, often envisioned to translate into improved sustainability conditions at the point of production. As Laudal (2010, p. 68) claims in relation to garment retailers, “it is reasonable to expect more breaches when names of source factories are held secret” than when “the public have access to this information.” Scholars accordingly claim that supply chain transparency is a consumer and stakeholder tool for improving the effectiveness of private regulatory systems such as codes of conduct and auditing (e.g., Doorey 2011; Iles 2007; Laudal 2010). Such improvements are certainly highly valuable given the inability of, for example, codes of conduct to significantly improve sustainability conditions at the point of production (Barrientos and Smith 2007; Locke et al. 2007).

The envisioned mechanism for improving the effectiveness of private regulation through supply chain transparency is that stakeholders, notably consumers and activists, put greater pressure on companies once they reduce the opaqueness of global supply chains by disclosing suppliers’ names and sustainability conditions. As Fung (2013, p. 184) puts it, transparency “enables individuals to protect their interests and, collectively, to control the organizations that affect their lives.” Hess (2007, p. 455) similarly argues that transparency is envisioned to empower stakeholders to “hold corporations accountable for their actions.” Supply chain transparency is argued to facilitate the “name and shame” campaigns that have proven important in forcing companies to extend their supply chain commitments (Bartley 2007; Doorey 2011).

Although convincing, the argument that supply chain transparency translates into sustainability improvements is largely dependent on the assumption that stakeholders in practice take action only once corporations disclose more information.Footnote 4 This assumption, however, has not been empirically examined in previous research, partly due to a general lack of studies of actual corporate attempts to implement supply chain transparency (cf. Bradu et al. 2014). In the present paper, this assumption is empirically examined by focusing on a specific stakeholder (i.e., consumers) and asking “How do consumers in practice leverage increased supply chain transparency to ‘pressure’Footnote 5 the disclosing firm (RQ1)?”

The discussion of whether consumers leverage transparency to pressure firms is, of course, closely connected to the broader discussion of increased consumer demand for sustainable products, consumers increasingly being urged to address sustainability problems, and increased sustainability concerns related to consumption patterns (e.g., Boström and Klintman 2011; Connolly and Prothero 2008; Lekakis 2013; Horne 2009; Micheletti 2003; Young et al. 2010). A key lesson of this literature is that being a responsible consumer is not easy (e.g., Biel and Dahlstrand 2005; Halkier 2009). Sustainable consumption hinges not only on strong commitment to environmental and social justice but also on consumer resources (such as financial means, information, and knowledge) and the opportunity to engage in green consumption (Moisander 2007). Consumers also have to deal with a plethora of sustainability labels (Pedersen and Neergaard 2006), be on the lookout for “greenwashing” (Peattie and Crane 2005), keep themselves informed of the latest environmental and social issues, and deal with uncertainties (Connolly and Prothero 2008; Halkier 1999).

Previous research has stressed that acquiring information is often the first step toward being educated in sustainability (Ostman and Parker 1987). However, sustainability information is often voluminous, vague, couched in technical vocabulary, and scattered in many forms and places, presenting difficulties for consumers willing to engage with it (Marjen 1994; Moisander 2007). This complexity can partly be reduced by other stakeholders (such as non-governmental organizations) acting as “infomediaries” (Hess 2007, p. 466) translating complicated disclosed information into straightforward messages. Previous research into sustainability and consumption more broadly, thus, imply that it is far from certain that increased supply chain transparency will translate into consumers’ taking action in practice (as is expected in much of the supply chain transparency literature).

Supply Chain Transparency as a Corporate Tool

In parallel with the discussion of supply chain transparency as a consumer tool for holding disclosing firms accountable, scholars also stress that supply chain transparency can be a corporate tool for increasing revenues. With increased transparency having been a key demand of anti-sweatshop activists for more than a decade (Doorey 2011) and its being increasingly difficult and risky for companies to hide unsustainable practices in opaque supply chains (Carter and Rogers 2008), supply chain transparency is frequently presented as a way a firm can improve its legitimacy and credibility (e.g., Bhaduri and Ha-Brookshire 2011; Carter and Rogers 2008; Cramer 2008; Dubbink et al. 2007). Supply chain transparency provides firms with a way to counter the common “greenwash” criticism (Dubbink 2007) and, as MacLean and Rebernak (2007, p. 4) put it, “there is no better way to build trust among stakeholders than through transparency.”

Such improved legitimacy/credibility/trust becomes highly attractive to firms if it can affect consumer willingness to buy products. Although limited, a few studies provide important findings in relation to this topic. For example, Singh et al. (2008) find that consumers are interested in obtaining information about production origin and sustainability conditions and that companies can benefit from increased transparency. Based on interviews with 13 US respondents, Bhaduri and Ha-Brookshire (2011) find support for this claim that supply chain transparency can positively influence consumer purchasing intentions. However, the authors also find that consumers prioritized price and quality over transparency and that the price premium consumers are willing to pay for transparency varied greatly.Footnote 6

Bradu et al. (2014) provide perhaps the most compelling argument in favour of transparency influencing consumers’ willingness to buy. Based on an experimental design with a sample of 1064 Danish consumers, the authors demonstrate that a transparency label significantly affects consumer willingness to buy chocolate bars. They also demonstrate that consumers lack motivation to expend much effort processing transparency information, making a transparency label central to influencing consumers. To successfully influence consumer willingness to buy, companies are, thus, advised to provide straightforward cues (such as transparency labels) rather than detailed and complicated information.

While the above studies present convincing arguments that supply chain transparency at least somewhat influences consumer willingness to buy, they focus on either attitudes/intentions or willingness to buy in artificial environments. As Bradu et al. (2014, p. 10) themselves recognize, “the most important limitation of this study is that the experiment was made in the artificial environment of an online ‘laboratory’, rather than in the natural context of a store.” It is important to move beyond studies of “attitudes” and “intentions,” as it is well established that attitudes and intentions are not always transformed into purchasing behaviour (e.g., Bradu et al. 2014). It is also important to move beyond “artificial” environments, as it is not straightforward to generalize findings in artificial environments to actual willingness to buy (e.g., Bradu et al. 2014). In this paper, these limitations of previous research are addressed by asking: “How does increased supply chain transparency in practice influence consumers’ willingness to buy products (RQ2)?”

Method

Case Selection and Overall Data Collection

To examine how consumers in practice leverage increased supply chain transparency to pressure the disclosing firm (RQ1) and how increased supply chain transparency in practice influences consumer purchasing behaviour (RQ2), material was used from a case study of the attempt of medium-sized Swedish company Nudie Jeans Co to become “the most transparent company in the world.” Given the lack of empirical studies of actual corporate supply chain transparency projects, the reliance on a single-case study is in accordance with previously suggested methods (Marshall and Rossman 1995). Nudie is a suitable firm to focus on as it has positioned itself as a supply chain transparency leader and allowed unrestricted access to empirical material (Eisenhardt and Graebner 2007).

The study of Nudie, ongoing since 2012, focuses both on Nudie’s sustainability practices in general (including use of organic cotton, free repair service, and payment of a living wage) and on its transparency project in particular. In total, over 100 interviews were conducted with Nudie and supplier representatives. Several of these interviews were not relevant to the transparency project analysed here but still helped provide an overall understanding of Nudie’s sustainability activities. Over 30 of Nudie’s total of about 50 representatives were interviewed (several on multiple occasions), including all owners, all members of the top management team, the corporate social responsibility (CSR) manager, representatives of all corporate departments, store managers, and all those involved in the transparency project. Interviewing a wide range of representatives was important, as it allowed us to capture “the focal phenomenon from diverse perspectives” (Eisenhardt and Graebner 2007, p. 28). The interviews focused broadly on Nudie’s supply chain, sourcing strategies, sustainability activities, corporate strategy, and motives for becoming transparent, and specifically on the concrete details of and reactions to Nudie’s transparency project.

Over 40 interviews were also conducted with Nudie supplier representatives in Italy, Portugal, and India. The supplier interviews explored, among other matters, how the suppliers viewed Nudie’s transparency project. Furthermore, 10 interviews were held with Scandinavian and international stakeholders (such as Amnesty, Fair Wear Foundation, Clean Clothes Campaign, union representatives, and factory auditors) directly or indirectly involved in Nudie’s transparency project and/or the international sustainability debate.

On average, the interviews with Nudie, supplier, and stakeholder representatives lasted 1 h each and were recorded and transcribed. To complement the information provided in interviews, written documentation was used (such as emails, PowerPoint presentations, Excel spreadsheets, and internal documents). Nudie project meetings related to transparency were also observed to gain complementary information.

RQ 1: Method

The above-mentioned interviews, documents, and observations were used to analyse whether consumers in practice leveraged increased supply chain transparency to pressure Nudie (RQ1). This was analysed from the perspective of Nudie representatives, i.e., whether these representatives had in one way or another been in contact with consumers due to the transparency project. As demonstrated in “The case of supply chain transparency at Nudie Jeans Co,” consumers interacted with Nudie representatives regarding supply chain issues before the mid-2013 launch of Nudie’s transparency project. The authors were interested in determining whether, and if so how, consumer interaction regarding supply chain issues increased and/or was altered after the launch.

It is impossible to capture all potential consumer interactions, but the authors could, based on the results of their initial rounds of interviews before the launch of the transparency project, identify that consumer interaction related to supplier location, supplier names, and sustainability conditions mainly occurred in relation to Nudie’s CSR manager, public relations/social media manager, webshop manager, customer support representatives, and store representatives. Accordingly, the authors focused particularly on whether these individuals had perceived any increased and/or altered consumer interaction after the launch of the transparency project. Given the well-known problems of making comparisons over time (e.g., Boring 1954; Stouffer 1949), the fact that data were collected longitudinally in real time bolsters the credibility of this study (cf. Eisenhardt and Graebner 2007).

The transcribed interviews, written documentation, and observations were coded using NVivo software both to create a chronological account of the transparency project and to identify increases and/or alterations in consumer interactions. The codes included general codes (such as transparency, traceability, and auditing), specific empirically derived codes (such as a code for each supplier’s name), codes related to consumer interaction (such as customer questions and discussions with consumers), and conceptually related codes (such as consumer and corporate tools). There were few inconsistencies between the information obtained from the verbal and written sources.

RQ 2: Method

To analyse how increased supply chain transparency influenced consumer purchasing behaviour (RQ2), a company (Carnaby Solutions) that specializes in analysing website traffic using software such as Google Analytics was used. The analysis was based on all the traffic on Nudie’s website (including its webshop) from “convertible countries”Footnote 7 between 24 June 2013 (when Nudie’s transparency project was officially launched) and 31 December 2013. From this analysis, it is possible to identify (i) the number of visitors to the website, (ii) the number of visitors who viewed Nudie’s “production guide” (the official name of Nudie’s transparency project), (iii) the conversion rates for visitors who did and did not view the production guide, and (iv) the number and value of transactions for visitors who did and did not view the production guide.

The data therefore allow us to analyse the percentage of consumers who chose to obtain more information about Nudie’s supply chain. They also allow us to analyse whether consumers exposed to increased supply chain transparency were more willing to buy products in Nudie’s webshop (i.e., conversion rate) and/or whether they were willing to spend more per purchase. It was therefore possible to move beyond studying “purchasing intentions” (Bhaduri and Ha-Brookshire 2011) and research in “artificial” environments (Bradu et al. 2014) to study how supply chain transparency influences consumer willingness to buy in practice.

One major drawback of studies in the natural context is that it can be difficult to interpret the empirical data obtained. For example, previous research has demonstrated that gender, country of origin, and age influence ethical decision-making and the likelihood of purchasing sustainable products (e.g., Lehnert et al. 2014; Luchs and Mooradian 2012). One must therefore control for the effects of such variables in studies of supply chain transparency, although this is not always done, even in experimental studies such as that of Bradu et al. (2014). Interestingly, Google Analytics can provide information about the gender, age, and country of origin of visitors to Nudie’s website based on their previous Internet usage patterns. Although such information is not perfect (such as those not storing “cookies” on their computers or using public computers are not included in the data), it provides information reliable enough to allow discussion of how gender, age, and country of origin influence the results.

The Case of Supply Chain Transparency at Nudie Jeans Co

Background

Nudie Jeans Co is a medium-sized Swedish company with approximately 50 employees and a 2012 turnover of EUR 40 million (profits of EUR 5 million). The company was founded in the early 2000s and has been increasing its turnover continuously over the last decade. The company’s ownership is divided between the two founders (still active in the company) and the current CEO. Eighty percent of Nudie’s turnover comes from the sale of jeans with the remaining 20% from other products and accessories (such as shirts, t-shirts, and bags). Nudie has profiled itself in terms of interest, engagement, and practical work in sustainability issues. As one owner put it in an interview, “it has always been central for us [i.e., the owners] to be able to go to sleep at night knowing that those who work and produce for us are doing well.”

Nudie outsourced all its production, initially only to Western Europe. This has slowly changed, however, and, as of 2014, end production (i.e., sewing, washing, and packaging) took place mainly in Italy and Portugal, though Nudie also has a handful of suppliers (and sub-suppliers) in India, Romania, Tunisia, Turkey, and Scandinavia. The geographic expansion of production has been driven mainly by a desire to reduce costs. In particular, the move to India was “a big deal” for several Nudie representatives who “were very proud of having produced only in Europe” (interview, Nudie customer relations manager and store manager). This pride was related to both high sustainability standards and a desire for extensive insight into suppliers’ operations. The focus on insight and quality has also led Nudie to have fewer than 30 direct suppliers for all of its sold products (including accessories and other minor products), with two Italian suppliers of core products being highly dominant in terms of volumes.

The Initiation of Nudie’s Supply Chain Transparency Project

In 2009, Nudie was featured in a media scandal when its jeans were found to contain traces of a chemical banned in the EU. This surprised Nudie managers, as they produced jeans only in the EU at the time. As the social media manager put it, “we did not have any idea of how it got there.” Although it was eventually discovered that the chemical traces had been transmitted to Nudie’s products during transportation with other goods, “the scandal sparked our desire to be open about everything, and we realized that this could be a competitive advantage” (interview, Nudie sales manager). Nudie managers, thus, started to realize that being transparent about supplier names and working conditions could be advantageous both to avoid (or manage) media scandals and to positively position Nudie.

Before the launch of Nudie’s transparency project, Nudie managers also perceived that supply chain information was relevant and interesting to consumers. “I would want to know, wouldn’t you want to know?” was, for example, the rhetorical question the CSR manager posed when asked about the consumer relevance of such information. Furthermore, Nudie managers themselves were interested in the information. As the CSR manager put it, “It is a blind spot at the moment, it doesn’t feel good! We want to know! Where are they [i.e., the products] produced? What does the factory look like?” One reason for this interest was also that, if quality problems arose, product traceability would allow the take back of specific faulty batches rather than all products.

In 2012, Nudie’s CEO officially initiated the transparency project with the vision “of becoming the most transparent company in the world.” Ideally, Nudie wanted to present the names of all suppliers involved in producing all Nudie products (i.e., complete traceability) and disclose the sustainability conditions at all suppliers (i.e., the sustainability dimension of supply chain transparency). When the project was launched on Nudie’s website in mid 2013, Nudie disclosed nearly all the names of its suppliers and presented summaries of factory audit results for those suppliers that had been audited. As of 2013, Nudie had not fully realized its vision but was still arguably more transparent about its supply chain than, for example, transparency frontrunner Patagonia (cf. Wagg 2012). Nudie was unable to be fully transparent as of the project launch in 2013 for several reasons, such as suppliers’ refusing disclosure of their names, Nudie managers’ unwillingness to disclose particularly sensitive information, and technical limitations (i.e., in terms of tracing products though the supply chain).

The “Production Guide” on Nudie’s Website

The official name of Nudie’s transparency project is the “production guide,” which is closely connected to its “fit guide” in which consumers can compare the appearance and measurements of different products. The production guide can be accessed either from the front page of Nudie’s webshop (the link is placed directly under the link to the fit guide) or in connection with each product in the webshop (the link is then located just below the price information). According to the chairman of the board, the close proximity between the production guide and Nudie’s products is vital, given that transparency is a complicated issue.

The entire CSR discussion is uninteresting for the media. They do not know anything about it, they do not have the time to understand it, there is no simple story in it. It is too complex. They want simplistic stories … The only way for us to get our story across is to have the information present in our products in order to slowly get the message across. I think that is the only way forward.

The production guide is a world map on which consumers initially find the countries of production for each product type. After clicking on a country, they then find the names of all suppliers located there. Finally, after clicking on a specific supplier, they find general information, factory audit summaries (pdf files that have to be opened separately), and lists of sub-suppliers (including factory audits of some sub-suppliers). It is time consuming to evaluate, through the production guide, the sustainability conditions at the point of production, and it requires an understanding of how to interpret factory audit results. For example, consumers have to evaluate what these statements imply: “all payments were made in cash, mostly to workers’ parents” (Armstrong, Indian supplier), “the exit sign in the warehouse is not properly marked” (Elegant, Italian supplier), and “the Code of Labor practices should be posted on the walls for the employees to see” (Carcemal, Portuguese supplier).

Consumer Responses to Nudie’s Transparency Project

Discussions of where production occurs have always been part of communications between Nudie representatives and consumers. When interviewed before the launch of the production guide in mid 2013, Nudie store and customer support representatives claimed that they occasionally received customer questions and comments about where production occurred. Generally, once Nudie representatives explained that most production was located in Europe, they received positive feedback from consumers who often assumed that Nudie, in line with much of the garment industry, sourced its products from China and other Asian countries. As a store manager put it,

People still think that we produce in Asia like everyone else, but we are still in Europe. You know it is a great sales pitch and it is really nice for us to put it out there.

Occasionally, however, there were negative consumer reactions related to the location of suppliers. For example, in reaction to the publication of information about a Nudie living wage project in India, a consumer criticized Nudie’s use of Indian suppliers. As the customer support representatives put it,

Customer support: We posted it [i.e., the payment of higher wages in India] on Instagram, and then a guy questioned why we were in India looking for cheap labor in the first place. It really got me thinking. I mean he is right.

Interviewer: So how did you respond?

Customer support: We did not really because it is not our area, but I think the CSR and social media people responded. Let me check what they wrote … Here it is: “Armstrong with whom we produce is a producer who owns the whole production chain from spinning and knitting to dying, sewing, and printing. This is an advantage for us as we can see the entire chain of production and have better control over the conditions. If we wanted to go cheap, we would have gone somewhere else. We choose quality and a safe workplace over cheap production.” And he [i.e., the consumer] actually responded straight away saying: “Thank you for responding, sorry for my accusation.” And then “@nudiejeans, ps. I love your clothing.”

This response process is typical of Nudie, with store and customer support representatives having most of the direct consumer contact regarding supply chain information, the CSR and social media managers adding input only in relation to difficult and complex questions.

After the launch of the production guide in mid 2013, Nudie’s CSR manager, public relations/social media manager, webshop manager, customer support representatives, and store representatives were again asked about consumer interaction in relation to supplier location, sustainability conditions, and the production guide. A very consistent picture emerged with all respondents claiming that they had had limited or no comments or questions about the production guide. The following quotations are typical responses:

I do not think I have ever been asked about our production guide. I get questions all the time about the fit guide, with consumers having looked at it before coming into the store, but not about the production guide. (Interview, store representative)

No, I have not heard anything about the production guide from consumers. (Interview, webshop representative)

There have not been any questions from consumers about the production guide so far. (Interview, CSR manager)

Regarding the direct question of whether they had noticed any difference before and after the launch of the production guide, the answer was unanimously negative. Some representatives seemed to have expected this lack of customer response, explaining that consumers are mainly interested in the look, fit, and quality of the product. Other representatives, such as the CSR and social media mangers, seemed somewhat disappointed at the lack of consumer engagement. This is understandable given that they had invested heavily in a supply chain transparency project that arguably was more developed than those of praised transparency frontrunners such as Patagonia.

Several Nudie representatives stressed, however, that they had used the production guide in responding to customer questions:

It is helpful when responding to consumers, but I have not had any questions from consumers … Regarding, for example, why we do not have fair trade cotton in all of our products … I can then refer to the production guide and explain that it is only possible to get a fair trade certificate in certain regions and consequently for certain of our products. (interview, CSR manager)

Similarly, some store representatives recall instances in which they have used the computer at the cashier to show the production guide to consumers interested in where production occurs. As one representative explained, “it is nice for us as well, since it is not easy to remember and explain all this information.”

In sum, consumers ask and comment about the location of Nudie’s suppliers and their sustainability conditions. However, these questions/comments have neither increased in number nor altered in form since the publication of the production guide. This could, of course, be because the production guide was only recently launched at the time of the interviews (mid 2013), and time will tell whether this will change in the long term.

Consumer Willingness to Buy

While the interviews clearly indicate limited consumer interest in Nudie’s supply chain transparency project, interestingly, the data obtained from Nudie’s website present a diametrically opposite picture. Table 1 shows that 4.1% of the website visitors viewed the production guide (in total 1,466,608 visitors, 24 June–31 Dec 2013) and that those who did were more than twice as likely to purchase products at Nudie’s webshop (1.91% vs. 0.84%) and purchased more products (1.75 vs. 1.6) for a higher total order value (SEK 1711 vs. SEK 1480). Table 1 indicates that Nudie’s production guide positively influenced consumer willingness to buy Nudie products.

Table 1 Nudie’s production guide and consumer willingness to buy
Full size table

Given that only a limited percentage of visitors viewed the production guide, the results of this study may have been influenced by the characteristics of the consumers who did view the production guide. For example, the conversion rate increased by an average of 0.12% for each additional page viewed (over the 24 June–31 December 2013 period). The number of pages viewed is, thus, positively related to consumer willingness to buy, and as those viewing the production guide viewed more pages, it is natural that they displayed a greater willingness to buy. However, viewing the production guide (counted as one page view) increased the likelihood of purchasing almost six times more than did a “regular” additional page view (0.7% vs. 0.12%).

It is also possible that consumers intending to purchase are more likely to view the production guide, i.e., that the results of this study simply capture how consumer willingness to buy influences the willingness to view the production guide rather than how the production guide influences consumer willingness to buy. Still, even if such an effect did exist, it is unlikely to explain the substantial difference in the willingness to buy.

Furthermore, the observed difference in willingness to buy may result from a specific type of consumer being more willing both to view the production guide and to purchase, i.e., the results of this study could capture interest in the production guide rather than a higher willingness to buy. In relation to country, there are some differences in the percentage of visitors from the three largest countries of origin who viewed the production guide, i.e., 3.1% of US visitors, 3.9% of UK visitors, and 4.6% of German visitors viewed the guide. However, visitors viewing the production guide were still almost twice as willing to buy in each of these countries, i.e., US visitors were 2.05 times, UK visitors 1.98 times, and German visitors 1.90 times more likely to buy products.

Table 2 also indicates that the percentages of visitors who viewed the production guide are fairly similar between all age groups (i.e., 3.8–5.0%) and between sexes (i.e., male 4.0%, female 5.2%). Hence, all types of visitors seem equally interested in viewing the production guide. The willingness to buy is also similarly affected by the production guide in both sexes, males being 2.74 times and females 2.55 times more likely to purchase products after viewing the guide. The willingness to buy differs somewhat between age groups (those in the minimum 25–34-year-old group being 1.99 times more likely and in the maximum >65-year-old group 6.35 times more likely to buy) but is still at least twice that of those who did not view the production guide within the same age group. It is important to recall that the country, age, and gender figures are based solely on those visitors for whom Google Analytics was able to determine this information.

Table 2 Age and gender differences
Full size table

In sum, Nudie’s production guide seems to positively influence consumer willingness to buy and this influence seems to be exerted irrespective of visitors’ country of origin, age, and gender. If it is assumed (i) that Nudie does not gain any additional website visitors due to the production guide, (ii) that the visitors viewing the production guide would, if the guide did not exist, have a similar willingness to buy and average order value as those not viewing the guide, and (iii) that the results mirror the influence on willingness to buy (rather than the influence of willingness to buy on interest in the production guide), it can be concluded that the production guide has increased Nudie’s revenues by approximately EUR 0.3 million per year (i.e., number of visitors viewing the production guide × difference in conversion rates × difference in order value), an approximately 0.7% increase in revenues. This estimate considers only Nudie’s webshop, so any positive effects on sales in physical stores and on the Nudie brand should be added to this.

When Nudie representatives viewed these results, several of them seemed genuinely positively surprised. As explained above, their perception was that consumers hardly cared about Nudie’s production guide, as they had not experienced any increased consumer interaction after the launch of the guide. That the production guide made a difference was “great news” according to the CSR manager, for example.

A Corporate but Not a Consumer Tool

Supply Chain Transparency: Hardly a Consumer Tool

Scholars and anti-sweatshop activists alike have expressed high hopes that supply chain transparency will be a useful consumer tool for transforming private regulation into something more meaningful (e.g., Doorey 2011; Laudal 2010). The Nudie case indicates that these hopes are unrealistically high, with consumers neither interacting more nor altering how they interacted with Nudie representatives. The straightforward answer to how consumers in practice leverage increased supply chain transparency to pressure the disclosing firm (RQ1) is that they do not. The Nudie study indicates that supply chain transparency in practice fails to “support a dialogue that influences the decisions” of companies (Hess 2007, p. 455), empower stakeholders to hold firms accountable for their practices (Dingwerth and Eichinger 2010), or shift power from the disclosing firm to consumers (Martinez and Crowther 2008). Consumers, at least in the Nudie case, are, thus, not taking control of the organization that affects their lives (Fung 2013), and pressure, let alone name-and-shame campaigns, is not increased thanks to transparency (Doorey 2011). Consequently, the Nudie case contradicts the assumption in existing supply chain transparency research that transparency will, through consumer leveraging, transform private regulation into something more meaningful. This could, of course, be due to the disclosed violations at Nudie’s suppliers being relatively benign as compared to, for example, child labour, forced labour, or minimum wage violations. Future studies are, thus, advised to examine consumer leveraging in cases of more outright worker rights violations.

The Nudie case also nuances the finding of Bhaduri and Ha-Brookshire (2011, p. 143) that interviewed consumers “constantly questioned the legitimacy of the claims made by the businesses with regard to their transparent supply chain practices.” While such questioning might occur in an interview setting, the Nudie case indicates that it is far from certain that consumers direct this questioning toward the disclosing company (at least not in cases with relatively benign worker rights violations and disclosed independent, rather than corporate, auditing reports).

There are two main explanations for the finding of non-pressuring consumers. First, Dingwerth and Eichinger (2010) argue that comprehensibility and comparability are key criteria for transparency to lead to stakeholder pressure (cf. Hess 2007). In the Nudie case, it is nearly impossible for consumers to understand the disclosed audit information (unless they themselves are experienced sustainability auditors in the garment industry) or to compare Nudie’s sustainability performance with that of its competitors (as the competitors are either less transparent or transparent in other ways). For example, how will consumers know whether the audit finding that “the exit sign in the warehouse is not properly marked” (Elegant, Italian supplier) is better or worse than findings at, for example, Levi’s or Diesel’s suppliers? The user benefit-to-costs ratio is, thus, unfavourable in Nudie’s complex transparency project (Hess 2007, p. 465). The Nudie case echoes the more general argument that sustainability information is often voluminous, vague, and presented in an inaccessible technical vocabulary, making it difficult for consumers to engage with the information (Markkula and Moisander 2012; Moisander 2007), act responsibly (Biel and Dahlstrand 2005; Halkier 2009), and navigate the plethora of divergent disclosed information (cf. Pedersen and Neergaard 2006).

Second, Bradu et al. (2014) argue that consumers’ involvement in transparency projects should be expected to be relatively low, as such projects do not directly affect their personal lives. Fung’s (2013) claim that transparency allows people to take control of organizations that affect their lives might, thus, not be applicable to supply chain transparency, because corporate activities affect the lives of workers rather than consumers. With low-level involvement and transparency mainly influencing consumers’ willingness to buy “based on automatic and affective rather than on elaborate cognitive processing” (Bradu et al. 2014, p. 4), it is perhaps not surprising that consumers refrain from leveraging transparency to pressure firms. While a transparency label (cf. Bradu et al. 2014) or standardized reporting format (cf. Dingwerth and Eichinger 2010; Hess 2007) could improve comprehensibility and comparability, it is, thus, still far from certain that this in practice would be enough to empower consumers to pressure the disclosing firms (cf. Dingwerth and Eichinger 2010).

Supply Chain Transparency: A Useful Corporate Tool

While supply chain transparency, at least in the Nudie case, is not leveraged as a consumer tool, it could well serve as a useful corporate tool. Visitors to Nudie’s website were about twice as likely to purchase products after having viewed Nudie’s transparency project, this being consistent for different genders, age groups, and countries of origin. The Nudie case therefore seems to confirm the findings derived in “artificial environments” that supply chain transparency improves consumer willingness to buy (Bhaduri and Ha-Brookshire 2011; Bradu et al. 2014), although the alternative interpretation of the results of this study, that consumer willingness to buy influences the viewing of supply chain transparency information rather than the other way around, cannot be dismissed.

A key question is, of course, why supply chain transparency seems to positively influence consumer willingness to buy. Given that Nudie’s transparency project lacks comprehensibility and comparability, one possible interpretation is that Nudie’s transparency site functions as a “peripheral cue” in a way similar to that of a sustainability label (Bradu et al. 2014). The mere fact that Nudie is attempting to be transparent, thus, signals to consumers that its products are sustainable. This interpretation is supported by the fact that transparency is generally presented as highly desirable in itself (Augustine 2012; Dubbink et al. 2008) and assumed to be linked to improved sustainability conditions (Dubbink 2007; Laudal 2010). Consumers could interpret supply chain transparency projects as ends in themselves rather than as means to compare competitors’ sustainability performance (cf. Dingwerth and Eichinger 2010).

A conflicting interpretation is that it is not transparency per se that matters in the Nudie case but instead that consumers are positively surprised by the disclosed information of relatively benign supplier violations and mainly European production. As the Nudie store manager cited above claimed, producing in Europe “is a great sales pitch and it is really nice for us to put it out there.” The transparency project allows Nudie to deliver this pitch online as well as in its stores. Again, similar to a sustainability label, European production could serve as a “peripheral cue” signalling sustainability (Bradu et al. 2014).

The authors were unable to assess the adequacy of these interpretations in this paper, but future research should analyse this further. The Nudie case simply indicates that consumer willingness to buy was substantially improved by Nudie’s transparency project and that the project has increased Nudie’s webshop revenues by approximately EUR 0.3 million per year. If potentially increased sales in physical stores, enhanced brand value, and internal corporate advantages (see section “The initiation of Nudie’s supply chain transparency project”) are added to this, it is reasonable to conclude that supply chain transparency, at least in cases such as Nudie where supplier violations are relatively benign, is a useful corporate tool.

Conclusion

Previous research has argued that supply chain transparency can be both a consumer tool empowering consumers to pressure disclosing firms to improve sustainability conditions and a corporate tool for increasing revenues. Based on a study of the transparency project of Swedish company Nudie Jeans, it is demonstrate that consumers do not leverage transparency to pressure Nudie but that the transparency project improves consumer willingness to buy. In doing this, this study contributes to the literature in two important ways. First, the authors provide one of the first, if not the first, studies of whether consumers in practice leverage increased supply chain transparency, challenging the argument made in previous research that supply chain transparency is a useful consumer tool. Second, the authors move beyond studies of purchasing intentions (Bhaduri and Ha-Brookshire 2011) and willingness to buy in experimental settings (Bradu et al. 2014) and confirm that supply chain transparency is a useful corporate tool in practice (with the reservation that the alternative interpretation that consumer willingness to buy influences the viewing supply chain transparency information rather than the other way around cannot be dismissed).

Anti-sweatshop pressure for increased transparency in global supply chains has, at least in the Nudie case, led to increased corporate revenues rather than more meaningful private regulatory systems. Consequently, the results of this study echo Dingwerth and Eichinger’s (2010, p. 92) argument that the corporate sector “can ‘tame’ transparency policies, reduce their transformative threat, and tailor the instrument to its own needs.” It is therefore imperative to empirically study how anti-sweatshop demands translate into practice and not to accept claims of transformative effects at face value. As Levy (2008, p. 956) argues, global supply chains “are resilient to challenge” and “tend to absorb and deflect threats in ways that protect system fundamentals.”

Still, it is too early to dismiss supply chain transparency as solely a corporate tool, because “it is difficult, at least in the short run, to distinguish between reformist strategies that lead to co-optation of challengers” and “long-term dynamic strategies that use the shifting terrain of compromise as the staging ground for another round of contestation” (Levy 2008, pp. 957–958). Transparency could, thus, make consumers more informed, which in a later stage could enhance their sense of responsibility for “being informed” (Hansen and Schrader 1997) and lead to an increased valuing and leveraging of transparency (cf. Valor 2007). In the future, other stakeholders (such as non-governmental organizations) might also leverage increased transparency to assume roles as “infomediaries” (Hess 2007, p. 466) and, through such positions, empower consumers and make transparency into useful consumer tools. Although there are few indications in the Nudie case of stakeholders (such as non-governmental organizations, media, and labour unions) assuming such roles, this could be due to both the recent launch of Nudie’s transparency project and the relatively benign supplier violations.

The results of this study also echo Markkula and Moisander’s (2012, p. 106) argument that “to empower consumers in taking active and meaningful roles in sustainable development still remains a major challenge for environmental protection-related political decision making.” Policy makers should not assume that increased transparency will make a difference at the point of production in global supply chains. Instead, policy makers have to facilitate elaborate systems of infomediaries to enable supply chain transparency to empower consumers (cf. Dingwerth and Eichinger 2010).

For corporate managers, the results of this study imply that managers exaggerate the risks posed by supply chain transparency (cf. Doorey 2011). The Nudie case indicates that transparency might have become an end in itself, allowing companies to reap the benefits regardless of what they disclose (except, perhaps, for flagrant non-compliances such as child labour). The results of this study also indicate that companies actually wanting to engage with consumers need to move beyond information disclosure. For example, companies could add digital communication platforms to their transparency projects (such as QR-codes, Twitter, commentary functions, and mobile apps). Such digital platforms have been claimed to be useful media for firm–consumer interaction (e.g., Cochoy 2012; Insch 2008).

A limitation of this study is its reliance on a single-case study. Nudie Jeans Co is a medium-sized recognized sustainability frontrunner, has a mainly European supply network, and sells high-quality and high-priced products. Future studies will have to examine whether the findings of this study are generalizable to, for example, larger garment retailers (such as GAP and Zara), other industries subject to less forceful sustainability demands than the garment industry, and companies with a less explicit sustainability focus. In terms of transparency as a consumer tool, the findings of this study are likely generalizable to both other garment retailers and other industries, given that Nudie has the type of informed consumers identified in previous research as valuing sustainability (cf. Bhaduri and Ha-Brookshire 2011). If consumers in such a favourable setting do not pressure firms, the same result can, thus, be expected in less favourable settings (Flyvbjerg 2001). However, the same reasoning also implies that Nudie might be a “unique case” (Yin 2003, pp. 40–41) in terms of consumer willingness to buy, making it difficult to generalize from this study. On the other hand, the present results confirm those of previous studies in other industries and countries (e.g., Bhaduri and Ha-Brookshire 2011; Bradu et al. 2014), indicating that the results might be generally applicable.