Influxes of recent data on buyer behavior have found modern consumers placing greater emphasis on purpose-driven companies. Consumers hold companies to higher standards and exercise their demands through supporting brands with similar values to their own.  

The retail industry in particular has witnessed this movement, prompting businesses to shift strategies to better align with consumer demand. The Nation Retail Federation recently held its annual Big Show in which thousands of retail professionals gather to discuss the latest trends and innovations in their field. This year, a major point of discussion was the results of an IBM study that the NRH partnered with. 19,000 consumers across 28 countries took the survey and the results pointed to purpose-driven shopping dominating consumer behavior for the next decade. 

IBM Survey Impact

The IBM survey results found two critical points that will influence the retail sector’s future. 

1. Sustainability is a Key Value

Nearly 60% of consumers surveyed voiced a willingness to alter their shopping habits to reduce negative environmental impacts and 80% noted sustainability as a critical value. More than 70% of those who indicated sustainability as extremely important would pay a 35% premium for eco-friendly brands. The world of cheap products is over. Although millennials lead this movement of valuing sustainability, all age groups consider environmental and personal wellness factors when selecting brands.

2. Purpose-Driven Consumers

Of all the respondents surveyed, 40% identified as purpose-driven consumers who support brands that align with their lifestyle. These consumers are even willing to pay a premium for products or services that align with their values and even change their shopping habits to reduce negative environmental issues. This indicates that sustainability is a growing value sector amongst consumers. The industries with the most purpose-driven consumers were food and beverage/grocery (44%), personal care/beauty (40%), furniture/home (38%) and apparel/footwear (35%). 

Purpose-Driven Marketing & Values

Purpose-driven marketing includes companies employing a long-term strategy that connects with consumers by focusing on shared values. Brand messaging is then structured to align with those beliefs to encourage boosted buy-in from followers. IBM’s survey results empower retail businesses to structure a strategy that captures consumers’ trust in a competitive market. 

Consumer-Focused Strategy

As consumers hone in on socially conscious purchasing behaviors, it’s essential for companies to reflect on their values and identify their target publics. Businesses must first segment their primary, secondary and tertiary publics. Once these groups are refined, brands should research the values that drive engagement amongst those consumers and shape their strategy to emphasize commonalities between values.

A Cone/Porter Novelli survey found 66% of consumers would change what product they buy to a purpose-driven company. When considering millennials, this number goes up to 91%. This trend is even more drastic amongst Gen Z. Fuse Marketing found that Gen Z consumers are 85% more likely to trust a brand, 84% more likely to buy from them and 82% likely to recommend the brand to their personal network if they are socially responsible or support a social cause. 

Factors consumers consider when extending their business include labor policies, ecological impact, animal welfare and more. Websites, such as The Good Shopping Guide, empower consumers to consider those factors when deciding where to support. Cheap prices and throw away goods no longer draw people in, modern consumers instead value ethical sourcing and practices. Consumers will take their business elsewhere if these standards are not met. In fact, in 2019 the  Wall Street Journal found nearly 60% of Americans would switch or boycott a brand depending on its stance on societal issues. This is almost a 13% increase from 2017.

Purpose: A Force of Good

Deloitte’s Retail Trends 2020 report found the next generation to value purpose as much as digital opportunities. Businesses with a purpose are those that are said to act as a force of good. Consumers understand how their buying behavior impacts business practices and, in an effort to enact good in the world, consumers are reclaiming their power to support companies with a positive societal impact. For example, the Edelman Trust Barometer found 80% of consumers believe businesses should address societal issues and act to improve social conditions. Businesses can respond to this growing demand through innovative, flexible business models that keep companies rooted in their brand identity while also meeting consumer needs. 

If executed properly, companies with a purpose will find they build a loyal following of consumers. The Cone/Portner Novelli survey found nearly 80% of consumers encourage others to buy from purpose-driven companies. An additional 70% are also willing to share social content for purpose-driven companies. This loyalty is shown through 73% of consumers being willing to defend purpose-driven brands if they are spoken poorly of. 

Next Steps

Once your company finds its unique purpose that aligns with its consumers, you will discover new opportunities for growth. Redefining your value propositions will broaden your vision and deliver long term benefits to customers. The Harvard Business Review found these factors lead to long-term growth. 

Take a hard look at your company’s mission and vision and turn your attention to the publics you serve. Do those values align? Consumers are paying attention so it’s critical for companies to believe in what they do and execute those values wholeheartedly. 

Take the first step in this process by partnering with Burkhart to authentically share your brand’s values and initiatives to your consumers.