IBM report: More consumers driven by purpose than by value
When it comes to shopping, the pandemic has shifted consumer views on many things – the delivery of digital channels including social commerce being one.
But, it is on the topic of sustainability where views have shifted most dramatically in the last few years, as shoppers increasingly look for brands and retailers to help them shop more sustainably.
In fact, purpose-driven consumers – those who prioritise brands that align with their values and lifestyles – now make up the largest consumer segment across all product categories, according to a new report from IBM and the National Retail Federation, based on a global study of nearly 20,000 respondents across 28 countries.
Research finds that for the first time more consumers are driven by purpose (44%) than by value (37%), as increasingly shoppers seek products and brands that align with their values and provide health and wellness benefits. These consumers care about sustainability and recycling and are willing to change their shopping habits to reduce environmental impact.
Research finds half of consumers say they are willing to pay a premium for sustainable brands (an average of 70%), while more than half are willing to pay a premium for brands that provide greater health and wellness benefits.
And it’s not just the well-off or millennials willing to pay that little bit extra, with consumers across all income levels and age groups showing support for sustainability and purpose-driven brands.
Profile of the purpose-driven consumer
So, what do you need to know about this group of consumers that now make up nearly half of all shoppers?
Well, for a start, they are more engaged, not only shopping more than value-driven consumers but staying on top of the trends and what’s new in the market. They are more likely to get their inspiration from social media, and they are more spontaneous consumers, shopping whenever the mood strikes.
Research reveals that half (52%) of purpose-driven consumers say they shop when they feel like it, compared to 39% of value-driven consumers; while 64% say they often buy more than what’s on their shopping list, compared to around half of value-driven consumers.
As you might expect, they are also more thoughtful about what they buy with three-quarters conducting extensive research before making a major purchase, and they are more likely to introduce a new brand or product to friends and family.
How can retailers and brands tap the purpose-driven consumer?
So, how can brands and retailers tap into this all-powerful engaged and growing consumer profile?
Ultimately, it means caring about what they care about and ensuring you align all business practices with those values, from your product development and design right through to your after-sales support.
1. Take a stand Retailers and brands must lean into the purpose-driven consumer, aligning every aspect of their brand with consumers’ values – this means creating propositions that go beyond price, selection and convenience.
2. Be transparent Purpose-driven consumers expect brands to be clear, honest, credible, and transparent with their information and communication. These are smart consumers who spend time investigating brands, businesses and products – they are sceptical of generic claims and wary of greenwashing and will know if you’re trying to pull a fast one. Purpose-driven consumers also expect to engage with brands and want conversations with you.
3. Communicate clearly Consumers want to understand what they’re buying, why their purchase will make a difference, and how the product fits into a company’s larger sustainability strategy. In short, consumers want to know their choices are making a difference. As a brand, this means outlining where products are sourced, produced and manufactured; how consumers can re-use, return or recycle them; what health and wellness benefits they deliver; and how their purchase will contribute to social responsibility or environmental sustainability. Give them the information in ways that are accessible and easy to understand and studies show they will put their money where their mouth is. A recent report from Kantar found that, over a 12-year period, brands with a perceived positive sustainability impact have grown in brand value faster than those with a low percentage lived impact.
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