The modern consumer wants companies to share their values and their commitment to building better communities, and a better world.
Taking a stand has never been so important.
All around us we see businesses, organizations and communities looking outside of themselves to realize how they can make a truly positive impact in the world. Reeling from recent global setbacks- including recent recessions and a global pandemic – have caused many to refocus their efforts and the question the true meaning of their operation.
This broader trend is coupled with the fact that younger consumers (Millennials and Gen Z) are more socially conscious than any other generation. With these generations growing in both influence and affluence, they will further demand more efforts and products that support the greater good. As consumers increasingly embrace social causes, they seek brands that align with their values. Nearly six in 10 consumers are willing to change their shopping habits to reduce environmental impact. Nearly eight in 10 respondents indicate sustainability is important for them.
There are clear implications for brands across industries that are looking to transform their businesses while also elevating what they truly stand for.
The Power of Purpose-Driven Practices
Today’s consumer is informed and empowered, as such they wield more power than ever before. Younger consumers (Millennials and Gen Z) are defining business products and practices given that they are more socially conscious, more likely to select brands that align with their beliefs, and more likely to switch brands to support companies that align with their personal beliefs. This is important since these younger consumers can represent major profits. Millennials account for 30% of all retail sales, valued at $1.4 trillion dollars. And more than others, Millennials demand that companies support environmental initiatives, even if this comes at a premium. What is essentially at stake is not only a brand reputation but also a lot of money – the quicker companies realize this the more profit can be gained.
In fact, 70% of consumers will pay a premium of more than 5% for a green product if its quality matches that of a nongreen alternative. Retailers are seeing the financial upside of “doing good.” Most (80%) believe that company actions matter to consumers, and 64% believe those actions affect purchase decisions.
Research by IO Sustainability points to the fact that companies fully integrating CSR were able to increase sales and prices. Customers pay attention to the way brands react to social and political issues and are ready to boycott when a company's values appear to conflict with their own, or instead to line up to buy to applaud a company's activism. It is imperative for companies to take a stand and understand the value in taking positive action.
Designing a Truly Authentic Approach
The value of CSR efforts appears to be clear, however there still remains another hurdle for businesses- that is ensuring that the approach to corporate social responsibility efforts are authentic and come across as genuine to the end consumer. Fostering a more dedicated, genuine approach can spur consumers into action- moving from interest to purchase.
There is a complicated issue that remains – consumers (particularly Millennials and Gen Z) seek out sustainable brands and products, however few consumers may actually follow through with their claims. In one recent survey 65% of consumers said they want to buy purpose-driven brands that advocate sustainability, yet only about 26% actually do so.
CSR efforts are not a “one and done” but should be the north star with which a company operates. Shannon Schuyler, the chief purpose and inclusion officer at PricewaterhouseCoopers explains:
“Today, if you’re inconsistent, you’re toast.
You’ve got to stand for something, and you have to make sure that your behaviors and your values guide you through the decision-making process."
Keeping messages in a consistent tone with practices that are reliable can make all the difference to build loyal customers.
Take a Stand or Take a Seat
With all of the focus on social impacts and ESG, companies must design their purpose statements to be something that they can confidently back up and ensure that they make a positive impact. Companies must not only talk the talk, but they also need to walk the walk and follow through on the specific causes and initiatives that they support.
The process of building social impacts or corporate social responsibility efforts starts with understanding all stakeholder segments – of course this incudes your end customers but also takes into account your intermediaries, partners and employees. Cultivating their ideas and motivations can help to build practices that resonate and cultivate new future solutions.