The Socially Conscious Spending of Consumers
Consumers are willing to put their money with their mouth is, literally, according to a recent poll from Good.Must.Grow, a socially responsible marketing consultancy. When looking to give back to the community, consumers are increasingly choosing cause-brands over charitable giving.
In a poll of 1,015 Americans, nearly 30% of consumers said they plan to increase the amount of goods and/or services they buy from socially responsible companies in the coming year. This growth in socially responsible purchasing greatly outpaced plans for charitable giving. Only 18% plan to increase charitable giving in 2014, a decline from 21% in 2013. One in five consumers (19%) said they prefer to “give back” by purchasing socially responsible products, while another 39% preferred to split their giving between charities and cause-based brands.
“I think what you're seeing is that many people feel they are tapped out in terms of what they can donate to charity, but they buy goods and services all day every day. We're seeing more and more consumers getting excited about their ability to make every purchase count and to use their pocketbooks as a force for good,” says Heath Shackleford, Founder of Good.Must.Grow. “It's a window in to the mindset of today's philanthropic consumer.”
More and more, individuals are seeing themselves as playing a critical role in driving positive change, ahead of major corporations and government. People are feeling empowered to make a difference, and they believe they can, says Shackleford. Part of the power of this socially responsible spending movement is that consumers truly believe they can change the world, every day, with the power of their spending and purchasing choices.
One crucial finding made in the poll was that when evaluating whether or not a company is socially responsible, how the company treats its employees emerged as the most significant factor with 45% rating it as very important. Along those same lines, 29% surveyed said they avoided buying products from a company because it wasn’t socially responsible (up 25% from 2013). Additionally consequential is the issue of trust, with 65% of consumers onlysometimes trusting a company’s claims that it is socially responsible.
“I think trust is mission critical. This entire movement will grind to a halt if we don't continue to create ways for consumers to trust socially responsible companies, and even more importantly to tell the difference between organizations that talk the talk versus those that walk the walk,” says Shackleford.
Even with all this desire to make a change, consumers are still willing to take a deal or bargain over buying for sustainability or socially responsible practices, proving that consumers are willing to pay for sustainability but that there is a limit to what they will spend. Shackleford says that this is a result of the balance between social impact and self interest. We know that many consumers need to get value from an exchange, and studies show that if value is there, consumers will typically choose a cause-based brand. However, first you have to meet their expectations in areas such as price and quality.
“You'll always have this tension. I think the more important thing for the food industry to wrestle with is how to make the socially responsible choice a little easier and more obvious. We saw in our research that for nearly half of consumers, it was a lack of knowledge that held them back from doing more good. They simply weren't sure where to go and how to find socially responsible products and services,” he says.
Indeed, when asked what prevented them from buying more socially responsible products in 2013, 45% cited that that knowledge was a key issue. This finding outranked availability, price, quality, selection and trust as potential roadblocks to spending on companies perceived to be more socially responsible. Also, while 62% said that buying goods or services from socially responsible companies was important, just 33% actively sought out such companies. So even as consumers move toward spending more on socially responsible goods and services, there is an information gap hindering a greater leap forward. In the years to come, addressing that information gap could lead to greater company loyalty and greater consumer spending.
“Those who are committed to this movement will be rewarded if they take steps to increase transparency, amp up communication and speak directly to the growing number of consumers who want to do the right thing for the planet, people around them and their own bodies,” says Shackleford.
Increasingly, consumers are wanting to know more about what they are eating, where it came from, how it was grown or made and whether it will help or harm their health. And there will be increasing pressure on the food industry to comply with these shifting priorities. Therefore, the challenge for companies who truly want to do the right thing is ensuring that healthy choices are more accessible and affordable in comparison to less healthy options. Food companies, explains Shackleford, have a great opportunity to fuel positive change with assets such as mass advertising dollars and prime shelf space in stores across the country.
“The food industry is unique in that being socially responsible requires companies not only to protect the environment and positively impact society but also to produce healthier products. If you're delivering diabetes and obesity in a can to millions of kids every day, how can you feel good about your societal impact as a business? The biggest impact the food industry can have on society is to help shift consumer appetites while improving the way foods are made and what is being offered,” adds Shackleford. “The optimist in me says that in 20 years, good businesses are the status quo, not shining exceptions. But there's a long road ahead.”
