Helping consumers feel good about the products they buy pays off. Rather than simply seeking the best deal, more consumers now shop according to their personal values and principles. In response, retail companies are infusing more purpose and meaning into the marketplace.
Among successful brands and retailers, purpose extends far beyond a corporate social responsibility program, permeating the entire organizational culture, business strategy and customer experience.
These companies evolve from a focus on functional product benefits (such as product quality or low cost) to a focus on higher-order emotional and social consumer benefits of a purpose that extends beyond sales and profit (such as wellness and community).
Consumers care about what they buy
A study found 56% of Gen Z consumers say they’re socially conscious and more than half report that knowing a brand is socially conscious influences their consumption.1Ruff, Corinne. Puma steps up social justice mission with Meek Mill. Retail Dive. January 25, 2019. Consumers like companies that reflect their personal values, including family connections, health and well being, and environmental sustainability.2 Shayton, Sheila. The Rise of Purpose-Led Brands: Q&A With Accenture Strategy’s Bill Theofilou. Brand Channel. December 5, 2018.
Recent research found 70% of global consumers seek more transparency about the social, health, environment, and safety credentials of the products they buy.3The Future Belongs to Honest Products. The Consumer Goods Forum. October 26, 2018. Most (90%) retail marketers agreed that consumers are more interested in transparency on social, health, environmental and safety issues than they were five years ago – and 95% said this trend will increase in the future.4 Ibid.
Americans simply want to be heard … they want businesses to know they’re willing to speak with their pocketbook 5Ruff,Corinne. A third of millennials joined a boycott last year. Retail Dive. February 1, 2019
Two-thirds of consumers want brands to take a stand on political issues, particularly on social media. Younger consumers in particular want brands to take a position on certain issues, suggesting brands can no longer stay silent and neutral.6 Stone, Michael. 10 Brand Marketing Trends To Watch In 2019. Forbes. January 28, 2019.
Notably, consumers aren’t bluffing: In the past year, 33% of Millennials and 35% of Gen X consumers boycotted a company or product they had previously used. Overall, 26% of Americans are currently boycotting a product, with men and parents with young kids being the most likely to boycott a product or retailer. Conversely, nearly six in 10 said they’re more likely to buy from a retailer or brand that gives to charities or is associated with causes they support.7 Ruff, Corinne. A third of millennials joined a boycott last year. Retail Dive. February 1, 2019.
The business case for purpose
Kantar Consulting found purpose-led brands have seen their brand valuation increase by 175% over past 12 years (versus a median growth rate of 86%).8Kapelke, Chuck. Walking the Talk. Association of National Advertisers. November 14, 2018. These companies also gain consumer confidence, sales and loyalty by being accountable, authentic and action-oriented.9Tillman, Alicia. 3 Essential Attributes To Become A Purpose-Led Brand. Forbes. December 13, 2018.
Unilever’s results back up this point, as its sustainable living brands – including Dove and Sunlight – delivered 70% of its turnover growth and grew 46% percent faster than the rest of the business.
Companies that stand for something bigger than just what they sell typically deliver higher levels of commercial success10Shayton, Sheila. The Rise of Purpose-Led Brands: Q&A With Accenture Strategy’s Bill Theofilou. Brand Channel. December 5, 2018.
Accountability is vital for purpose-led brands’ success. Under the scrutiny of the social media magnifying glass, consumers are more informed about whether or not companies truly live up to their espoused purpose.
For companies that don’t convey purpose, the outcome can be even worse, as Accenture warns companies that remain neutral on a particular social issue out of fear of consumer backlash are at a distinct disadvantage in the long term.11 Ibid.
Retail companies demonstrate purpose
Several major retailers and brands have adapted to the emerging trend toward purpose-driven businesses. For instance:
- CVS promised to stop Photoshopping its beauty products’ marketing materials to resonate with authentic images that reflect reality, and to encourage cosmetics consumers to feel proud and confident about how they look.12St. Louis, Molly. 5 Brands That Actually Did Some Good in 2018. Adweek. December 19, 2018.
- Levi Strauss has taken stands on same-sex partner benefits, the proposed Muslim travel ban and gun violence.13Ryan, Tom. NRF: Is the time right for retailers and brands to take political stands. RetailWire. January 17, 2019.
- Patagonia endorsed two U.S. Senate candidates in the midterms who spoke up about the climate crisis.14 Ibid.
- Dick’s Sporting Goods ended sales of assault-style weapons and guns to anyone under 21 after the Parkland, FL school shooting.15 Ibid.
- IKEA plans to use only renewable and recyclable materials in its products by 2030, and it will remove all single-use plastic products from its assortment and in-store restaurants by 2020.16Ringstrom, Anna. IKEA to use only renewable and recycled materials by 2030. Reuters. June 7, 2018.
- Amazon advocated for human rights by announcing new guidelines focused on how employees and managers should make their transgender teammates feel more included and welcome.17St. Louis, Molly. 5 Brands That Actually Did Some Good in 2018. Adweek. December 19, 2018.
- Gillette’s controversial “We Believe” commercial addressed serious issues like toxic masculinity, sexual harassment and #metoo, distinguishing the brand by facing difficult topics that are making global headlines.18Kelly, Heather. Gillette’s new ad isn’t about shaving. It’s about men in the age of #metoo. CNN Business. January 15, 2019.
- CoverGirl made a commitment to no longer test on animals and recently became the largest makeup brand to achieve cruelty-free certification.19 St. Louis, Molly. 5 Brands That Actually Did Some Good in 2018. Adweek. December 19, 2018.
- Puma launched a new basketball shoe – the Clyde Court #REFORM – inspired by hip hop artist Meek Mill who advocates for criminal justice reform and universal equality.20Ruff,Corinne. Puma steps up social justice mission with Meek Mill. Retail Dive. January 25, 2019.
Beyond the big brands, smaller, purpose-led consumer goods suppliers are also thriving. For instance, as more consumers are aware of their health, animal welfare and the environment, more of them are turning to veganism. Vegan brands like Daiya, Gardein, and So Delicious are tapping into this trend, and experiencing strong growth and popularity. 21These are America’s favorite vegan brands. Supermarket News. August 17, 2017.
As more consumers shop with their principles, retail companies are adapting to this profound influence on retail categories like food, beauty, fashion and pet food. If your company intends to embrace a purpose-led mission, align your entire business strategy around it, use your purpose as a framework for decisions, and communicate a clear purpose in your marketing to stand out, gain a competitive advantage and earn loyal brand advocates.
Which purpose-led brands (including your own) would you add?