Do we need a new way to calculate brand value in the age of the conscious consumer?
Written by Fiona Beauchamp, Activation Director, Bray Leino
With growing concern about climate change, plastic waste firmly in the mainstream and the full impact of COVID 19 yet to become apparent, the 2020s are set to be a decade of conscious consumerism as people seek to minimise negative impact on the planet through their purchasing decisions.
This is supported by recent research from CGS, which found that more than two-thirds of consumers consider sustainability when making a purchase and are therefore also more willing to pay more for sustainable products. But what does this mean for the brands trying to appeal to a new generation of eco-shoppers?
According to the Global Web Index, 60% of millennials today identify themselves as brand-loyal, stating that once they find a company they like they stick to it, while half describe themselves as ‘brand-conscious’. Meanwhile, Gen Z report lower figures of 55% and 42% respectively.
With these figures already showing a decline, brands not only have to compete in an increasingly crowded marketplace, they also have to fight to engage consumers who are more socially aware, and therefore cautious, than ever before.
These emerging trends have recently been accelerated due to lockdown and the resulting societal changes, from increased community and neighbourly support to benevolence and kindness acts coming to the fore. In this environment brands are coming under greater scrutiny as consumers look for them to play a positive role in society, rather than just supplying a product or service.
As a result, businesses are having to think more carefully about how customers are making their purchasing decisions and ensure their marketing strategies and tactics reflect these changes.
The traditional shopper value equation
Traditionally, consumers have considered purely personal drivers around emotions and attributes when it comes to engaging with, and staying loyal to, a brand. In this scenario the concept of value plays a major role in consumer shopping habits, with many favouring the physical or online stores which provide value most consistently.
In fact, research shows that, on average, shoppers (pre lockdown) visit 17 retailers each month, yet only 12 per cent of shoppers consider alternative retailers on each occasion. Value, however, can be derived from multiple different areas, from distance to travel, to price and quality, to customer service, providing brands with many different ways to drive customer loyalty.
Marketing has evolved to satisfy this shopper value equation, with an emphasis on customer experience, personalisation and seamlessly blending the digital and physical retail worlds.
Entering the era of the ethical equation
The increased transparency around brand information and consumers desire to investigate brand values more has meant that a whole new set of questions are now being asked at the point of purchase:
- Who am I purchasing from?
- What does the brand stand for? Is this aligned with my personal values?
- Do they treat their employees well?
- Is the company I am supporting environmentally responsible?
- Is the company involved in community projects?
- Are they committed to social equality?
- Am I happy to be associated with this brand?
This means that brands are no longer able to rely on satisfying the shopper value equation to drive customer loyalty – they also need to address the issue of values.
The Ethisphere Institute, which defines and codifies best practice and compliance amongst leading global companies, states that ‘World’s Most Ethical Companies honorees have historically out-performed others financially, demonstrating the connection between good ethical practices and performance that’s valued in the marketplace’.
It is not enough therefore for brands to build tactical associations or partnerships to provide competitor differentiation, they need to consider their role and purpose and embed them into their DNA & behaviour in the long term.
While value is always likely to be an important component in shopper’s decision making process, increasingly marketers will need to learn to speak the new language of the conscious consumer, finding ways to inform and engage customers with a brand narrative that they can believe in.