Ethical Consumerism Is On The Rise. Are You Ready?

Ethical consumerism – the practice of making purchasing decisions based on a product’s social and ethical positioning – is on the rise as consumers look to drive change by adjusting where and what they spend their dollars on. Nielsen’s corporate social responsibility survey data revealed that more than half (55 percent) of global respondents say they are willing to pay extra for products and services from companies that are committed to positive social and environmental impact. And according to an annual benchmark study byGood.Must.Grow. (GmG), a socially responsible marketing consultancy, the percentage of Americans who have increased their socially responsible shopping has increased three years in a row, growing from 18 percent in 2012 to 30 percent in 2014.

As this practice of ethical consumerism grows, retailers are starting to take note and are adjusting their business strategies accordingly. While retailers, like Patagonia, Ben & Jerry’s, Whole Foods and TOMS, may make attracting these consumers look easy, it’s not. To appeal to the 65 percent of Americans who bought goods or services from socially responsible companies last year – a number that could possibly increase even more this year – retailers need to radically shift their mindsets, away from a 100 percent bottom-line focus, and toward promoting the following:

By using transparency to empower consumers and place them in a position to hold businesses accountable, retailers are cultivating a stronger sense of trust. And it is this trust that helps retailers grow and diversify their consumer bases to include more of the ethically minded.

As my colleague Jennifer DiGiovanni and I discussed in a recent blog post, Patagonia, for example, has embraced an “environmental ethos,” appealing to customers that also value sustainability. In a recent campaign, the retailer urged consumers to repair clothing instead of purchasing new, and it engaged with advocates and customers alike to support the sustainability movement. Throughout the year, sales reportedly increased by almost one-third to $543 million.

Through promoting transparency and authenticity, retailers can achieve more than just growing their ethical consumer base. They have the potential to acquire and develop brand loyalists who will journey with them beyond the transaction.

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Source: BDO
Article by: Doug Hart