Mind the gap: the difference between your clients’ good intentions and their customers’ buying habits
Everywhere we turn, brands are shouting about their environmental or social credentials – telling us how their products are fair trade, environmentally friendly and cruelty-free or promoting their carefully crafted corporate social responsibility statements.
In the midst of all this noise you’d be forgiven for thinking that your clients’ ethics are a major factor influencing buying decisions, but according to research you’d be wrong (Sage Publications, 2015).
Because like it or not there’s a big void between consumers’ ethical intentions and their actual buying habits; you only have to look at the statistics to prove it. An estimated 30% of UK consumers say they believe in ethical consumption yet the UK ethical market is – at best – only 4% of consumer spend (Davies et al., 2012).
So what’s going wrong? At a time when ethical and environmental issues seem to be at the forefront of everyone’s minds, brands’ honourable intentions just aren’t translating into business growth. It can be put down to a theory called ‘the ethical consumption gap’ and it’s caused a few high profile victims to fall down in recent times.
Cosmetics giant L’Oreal have just called time on iconic ethical beauty brand The Body Shop – putting it up for sale after 10 years under their management (The Guardian, 2017). It would seem that the retailer just isn’t gaining the market share in ethical beauty that L’Oreal banked on. And this comes just after American Apparel closed UK stores despite marketing itself on sweatshop-free ethical production (The Financial Times, 2017).
The problem is not that consumers know they need to act differently – they’re all too aware of their impact on the world around us. The issue simply is that corporate social responsibility is only part of the picture and has a far smaller influence on consumers’ decisions than price, quality, convenience and prestige (Sage Publications, 2015).
When brands hang their hats solely on environmental or social credentials they seem to ignore these other important influences. They mark-up their goods with a few extra pounds to account for their considered production and marketing costs but this is doing more harm than they think.
The recent financial crisis means shoppers are likely to be less inclined to spend £30 on an ethically sourced t-shirt or £20 on an environmentally friendly moisturiser when they can get an equivalent one at half the price. And it’s not the compromise you may think – the more price-sensitive retailers are moving into the ethical market but with more realistic expectations and price tags.
H&M proudly promote the environmentally sustainable ‘Conscious’ brand at a fraction of the cost of American Apparel, and Boots have long been making inroads into natural beauty with their ‘Botanics’ range but they’ve done so with purse-friendly prices.
This suggests that just because you label something as organic, fair trade or environmentally friendly it doesn’t warrant a markup that will put tightly squeezed consumers off. Yes, it may cost more to produce the goods or pay good wages but when you see the high price tags on many products you need to determine whether the high cost of sustainable products is justified, or just marketing targeted at the rich. And if it’s the latter, then society as a whole will never be able to afford the luxury of ethical goods.
Some people will argue that it’s not the consumers’ responsibility to make ethical decisions but that of businesses to do the right thing in the first place. Businesses are often pushing the decision-making of ethical consumerism onto the buyer, meaning corporate social responsibility will always have a limited impact when the consumers are more heavily influenced by factors such as cost.
So next time you look at a client’s carefully crafted corporate social responsibility statement don’t overestimate its significance to the customer. Yes, we all want a better world and it’s important to promote what good your clients do, but promote it alongside price, quality, convenience, and prestige. Your client shouldn’t use environmental or social credentials as their main marketing centrepiece but as a welcome reassurance that they’re doing the right thing alongside being a competitive business.
And as a marketing agency, if you disregard the immediate impact of the products being sold, you may undermine all the good intentions the brand has in the first place.