Consumers are becoming more conscious of their shopping habits and purchasing behaviours, and brands need to sit up, take note, and embrace the change, says Jon Halley, Wunderkind‘s Executive Director EMEA, in our latest guest post. Here’s what he told us:
The recent Cop26 summit went some way to emphasising the importance of tackling climate change. And, while the conference made clear that progress is being made—agreements around the phasing out of coal were particularly welcome—it’s clear that there’s still a long way to go.
Governments, businesses and individuals are being urged to act, and they’re being told they need to do it immediately.
Many retailers, especially those in the luxury sector, ventured to Cop26 to showcase their approach to sustainability; Burberry, Stella McCartney and Mulberry, as well as a raft of others, used the event as an opportunity to highlight their efforts and call for other brands to follow suit.
Scores of retailers, of different sizes and sectors, have made strides in this area over the last few years, be it by increasing recycling levels, installing more efficient light bulbs, switching energy suppliers or completely overhauling their supply chain, but there is always going to be more to do.
“Token gestures around sustainability can only take brands so far, especially given consumers are more knowledgeable and incisive than ever, and are incredibly aware that their actions—or lack of—can play a massive role in how retailers operate.”
Consumer attitudes, as well as wider societal pressures, are, to a large extent, dictating what organisations need to prioritise to succeed. Failure to acknowledge these increasingly powerful voices is not only a bad look, but it’s going to hit business’ pockets.
This is all part of the ‘morality mentality’, and for retailers, there’s never been a more appropriate time to fully embrace it.
What exactly is a ‘morality mentality’?
A 2020 research study found that two in three people prefer eco-friendly brands, while a survey carried out in 2018 found that a staggering 88% of consumers want brands to help them ‘make a difference’. The same study discovered that nearly every respondent (96%) is confident that by embedding ‘moral’ actions into their daily lives—be it recycling, buying from sustainable companies or donating things they don’t use—they are helping the planet.
Consumers recognise the need to make better use of the planet’s dwindling resources, but they also understand that there’s only so much they can do without buy-in from organisations. They will, therefore, gravitate towards businesses that are on the same page. Businesses, therefore, need to keep morality at the very top of their agendas.
Sustainability is the present and the future
There’s plenty of research to back up the idea that, when shopping, consumers care not only about the products themselves, but the processes involved in their production and their associated impacts. Towards the end of 2020, the Capgemini Research Institute released a report which stated that almost four in five (79%) consumers are changing their buying habits to align with their views on social responsibility, inclusiveness and a host of environmental factors.
By the end of 2021, the sustainability market in the US alone will be worth as much $150 billion, which will represent a 20-fold year-on-year increase. According to Capgemini’s report, more than two-thirds of consumers (67%) are now more committed than ever to adopting sustainable buying habits, while almost the same number (65%) said they will be more mindful about their ‘overall consumption’ practices in the wake of the global pandemic.
“The consumer landscape has been gradually changing for years, but Covid undoubtedly shone an additional (eco-friendly) spotlight on the topic of sustainability, and has played a major role in catalysing a widespread mentality shift.”
Broader corporate responsibility
While sustainability is important, it’s not the only moral consideration brands need to focus on. The gender pay gap, for example, is a significant issue that still needs to be tackled: earlier in 2021 the ONS reported that, among full-time employees, the gender pay gap is 7.9% in favour of men. This needs to change.
Diversity and representation is another area that retailers must continually assess and address. Female representation on the boards of FTSE 100 companies has improved massively in the last decade—only 15% of board members were female in 2012 compared to 34.5% in 2020—but men still tend to dominate the boardroom.
In terms of representation, City A.M. recently revealed that almost one in five (19%) FTSE 100 companies doesn’t have a single board member from an ethnic minority, which is an incredibly bleak finding. While many companies have made a conscious effort to be more inclusive, it’s clear that some still have work to do.
For all brands, awareness and a willingness to do things better is key, be that in terms of environmental considerations or giving employees a voice. It’s also vital these things be genuine; performative gestures are something to be avoided, not least because people can see right through them. Piggybacking on a trend just because other brands are doing it is only liable to tarnish a company’s reputation, not enhance it.
Morality impacts the bottom line
At the beginning of 2021, researchers from the Norwegian University of Science and Technology undertook a comprehensive analysis of 100 scientific studies to assess the link between sustainability and business success. Only two of the papers declared that implementing sustainability practices was likely to be detrimental to the bottom line: 64 stated the exact opposite.
Research has also found that, when it comes to attracting investors, a focus on sustainability is crucial. A recent Morgan Stanley report asserted that almost half of all individual US investors currently practice ‘sustainable investing’, while 90% of asset managers say that, in the coming years, they’re planning to dedicate additional resources to ensure that they’re investing in sustainable companies or projects.
Putting extra emphasis on sustainability is more than just the wise business choice – it’s the only one that makes sense. It appeals to consumers and investors, it can make marketing more powerful, it can encourage customer loyalty, it can drive sales, and it can benefit the planet. What’s not to love?
Jon Halley is Executive Director EMEA at Wunderkind, the the leading consumer engagement platform that scales one-to-one messages for retailers and brands