8 Facts That Prove Purpose-Driven Brands Are Here To Stay
More and more, people are putting their money where their hearts are.
Around the world, people are increasingly informed and conscientious about the products they buy, the services they choose, and the food they put on their tables. We’re now aware of a holistic range of factors that affect our purchase decisions. These factors encompass sustainability—the various social, environmental, and ethical impacts—as well as individual health, well-being, and even our individual self-identities. Below is a brief overview of some of the key changes behind this incredible shift. All evidence points to a single conclusion: that these global shifts in attitudes and behaviors are here for the long haul. As a result, our purchases will increasingly be motivated not just by price and product, but by values and purpose.
2 out of 3 consumers globally now say they’ll pay more for brands committed to sustainability
66% of people worldwide say they’re willing to pay more for sustainable goods, up from 50% just two years prior according to a recent global survey. And it’s not just affluent suburbanites in the developed world concerned with positive social and environmental impact. “Across regions, income levels, and categories,” the survey report reads, “people are willing to pay more to remain true to their values.”
As both buyers and employees, Millennials and Gen Z are driving the change
Having coming of age in an uncertain economy and growing alarm for the climate, Millennials are the ones driving demand for more purpose-driven brands (with Generation Z following quickly behind). Younger adults are the most willing respondents to pay extra for sustainable goods—almost three-out-of-four Millennials in Nielsen’s latest findings. As employees, Millennials are also rewarding higher-purpose businesses with their notoriously fickle loyalty. Millennials are an increasingly large component of the workforce, on their way to 75% of the global workforce by 2025. But given the chance, 66% of Millennials around the world expect to leave their workplace in the next 5 years. Their high ideals can be key to keeping them around: 87% believe the success of a business should be measured in terms of more than just its financial performance. Of company attributes given by Millennials who do plan to stick around, one of the most frequently cited is “a strong sense of purpose beyond financial success.”
Source: Deloitte 2016 Millennial Survey
There’s unprecedented interest in the quality and sourcing of food
Easier access to information has brought higher awareness not just of sustainability and fair trade, but also the quality of what we eat. People worldwide are increasingly health-conscious when it comes to what’s on their plates. Globally, 82% of people now say they’re willing on some level to pay more for healthier foods, with over a quarter reporting they were “very willing” to pay a premium. The rising demand is characterized by natural simplicity, with buyers increasingly articulate about GMOs, additives and all the things they DON’T want in their foods. Personal and planetary concerns converge in an overarching push for local and organic food. As with overall sustainability, Millennials and Gen Z are fueling the global rise in demand for top-quality foods.
Ditching conspicuous consumption, even luxury buyers are changing their tune
Since the great recession, luxury buyers are less drawn to overt, flashy status symbols. This reluctance to stand out has persisted, according to industry experts. Social media have also enabled like-minded people of all social strata to self-identify around “subtler signals” and niche brands. As a result, luxury branding is now increasingly about experience, artistry, and shared values.
Brands are starting to take notice
Established brands are meeting demand for societal purpose
Brands at the highest level of the corporate echelon are listening, and are working to better express their purpose and commitment. Perhaps the most hard-hitting sign is the share of S&P 500 companies providing sustainability reports, which has risen to 81% from 20% in just five years. Among the many benefits to sustainability reporting, CEOs themselves frequently cite reputation, employee retention, and customer loyalty.
Through the B-Corp movement, long-committed upstarts are defining a whole new category
A healthy skepticism remains around corporate social responsibility claims, and accountability requires brand not just to talk the talk, but walk the walk. With 50,000 businesses claiming a “triple bottom line” of profit, people and planet, there’s a growing need to certify such claims. The B-Corp movement has emerged to certify this new class of business. A certified B-Corp meets higher standards of social and environmental performance, accountability, and transparency—standing for a better way to do business. Recently, there has even begun a push for legal recognition of B-Corps as a new asset class within the U.S.
Source: Deloitte 2016 Millennial Survey
Higher purpose continues to shape our economic future
Capital is increasingly invested not just for monetary ROI, but social and environmental returns as well
Impact investments aim to address social and environmental impact alongside financial return. The growing impact investment market puts capital to work in addressing challenges the world over. The broad umbrella covers everything from sustainable agriculture, renewable energy and conservation, to global poverty and access to basic services like housing, healthcare, and education. The steady rise in interest for investments that go beyond simply capital return is one of the most promising signs of all.
Source: Impact Investing Survey 2015
The U.N.’s Sustainable Development Goals for 2030 establish a global mandate, and some of the world’s largest brands are getting on board
Since the announcement of the United Nations’ 2030 Agenda for Sustainable Development, the public and private sectors have an ambition and achievable set of goals to inform their policy and planning. The CEOs of top global companies are embracing this mandate for radical change to map corporate citizenship. In a 2016 survey of over 1,000 top global CEOs, 80% believe that demonstrating a commitment to societal purpose is a differentiator in their industry. A large majority (79%) of CEOs attribute the driving force for sustainable change to brand trust and reputation.
Source: Deloitte 2016 Millennial Survey
Looking across this wide spectrum of shifting attitudes and choices, it’s clear that the way people consider the brands they purchase has fundamentally changed. Driven by the emergence of younger generations as influential buyers and employees, evidence suggests that this is not just a trend, but a movement—one that will forever alter the way we think about what we consume. This global movement toward a more conscious consumerism is only just beginning.
This overview of the global movement toward a more conscious consumerism is a product of 214. We started a new kind of brand and communications agency, one passionate about building and amplifying each brand’s why—their true reason for existing. Our conviction that purpose directly impacts the brands people admire, follow, and buy is our why—what gets us excited about the brands we work with. If you are interested in understanding how your brand can better amplify the why, please complete this brand assessment.
We’d like to acknowledge all the sources included in this overview, as noted above.
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