[THIS POST ORIGINALLY APPEARED ON THE WEBSITE STRATEGYONLINE.CA ON 3/30/17]
Here’s the good news.
Over the past 10 years there has been a steady increase and embrace of social consciousness slipping into consumer behaviour and attitudes. Once limited to the domain of citizenry, where “good people” worked for non-profits or public institutions, today you can have impact simply by the choices you make when purchasing food, clothing, cars, bathroom tissue and even eye glasses.
It’s part of the integration happening in society where people simultaneously wear their consumer and citizen hats, thanks to a rise in expectations of how companies need to behave. This growing expectation, combined with the leadership of purpose-led companies, is driving the movement towards a purpose economy where positive financial results are achieved because of how a company sources and manufactures its goods, behaves environmentally, contributes to community and treats its employees.
Toms, Starbucks, Whole Foods, and Tesla are well-known examples of this integration of profit with purpose. EnviroCare, Alice + Whittles, Ten Tree and G Adventures may be lesser known, but are equally powerful (and Canadian) examples.
Now the bad news.
With the rise of any movement there tends to be an over-exaggeration and inflation of people’s commitments. As norms change and the desire to fit in and look good increases, the “say/do” gap tends to be larger than one admits.
This is true when it comes to conscious consumerism.
There are myriad polls telling us consumers are willing to pay more for products that do good or from a company that does well in giving back to society.
Ipsos Reid, for example, has reported that 84% of Canadians said they would switch product preferences if a considered brand were associated with a good cause. A Cone Communications/Ebiquity Global CSR Study, meanwhile, suggests 71% of consumers would be willing to pay more for a socially and environmentally responsible product; and 57% would purchase a product of lower efficacy or quality if it was more socially or environmentally responsible.
The problem with these studies is that they distort reality.
Consumers’ purported behavior rarely matches their actual behavior when it comes to purpose-oriented products and companies.
Contrary to the polls, few people will purchase a lower efficacy or quality product if it was more socially or environmentally responsible. It’s why the CEOs of leading purpose brands like Unilever, Warby Parker and Kind snacks will tell you that if the product isn’t great, no level of community or environmental impact will help to drive sales.
And while we would all like to believe consumers will pay more for the environmentally or community-driven product, it doesn’t hold sway in many categories like home paper products where only 15% of Canadians purchase 100% recycled (mainly due to their higher price).
A recent “Good. Must. Grow.” study supports this “say/do” gap.
When comparing intentions versus actions, 60% of consumers who planned to spend more responsibly in 2015 accomplished their goal, down from 73% who had the same goal for 2014 and 76% in 2013.
The study also found nearly half of respondents said they’d prefer to cash in a “buy one, get one free” offer from a store, rather than the retailer commit to giving away a similar product to someone in need or making a financial donation to a charity based on their purchase.
So what does this all mean?
I would argue 15% to 20% of people are highly civically engaged and will pay more to truly live their values. The rest of us want to do good. And we do. But it’s hard to live our values day in and day out, because so much of what we consume is not ethically driven.
This does not make most people bad. The majority are well meaning. But we are all busy, distracted, uninformed, reactive, and somewhat mistrustful when it comes to our purchasing behaviours.
Consider this: only 25% of consumers said they actively sought sourcing origin information when they made their most recent purchase (GT Nexus Consumer Study); 64% believe that most companies are only being responsible to improve their image (Havas Media Meaningful Brands Global Report); and only 40% of consumers said they would be willing to pay more for products that are environmentally friendly, mostly due to skepticism about misleading labeling (Ipsos Study, 2015).
If we want to truly accelerate conscious consumerism and the purpose economy, companies and brands need to make it easier for people to do the right thing. Don’t make me pay more for a product of equal value. Don’t make me go way out of my way to find the product. Make it simple, and direct and immediate.
It requires a shift from saying the right things and marketing “being good” to truly doing good, so that all can engage. Purpose-driven brands gain 46% more share of wallet and outperform the stock market by 133% (Havas Meaningful Brands Index).
When consumers expect and demand that all their products are purpose-driven and simply want to pay fair value for it (not more or less) there will be a paradigm shift. And we will finally be able to lose the “conscious” in consumerism because it will become redundant.
Phil Haid is CEO of Toronto agency Public Inc., and a member of The Purpose Collaborative