Each company enters the market with a purpose. Most of the time, the purpose will be to offer a product or service that promises to solve a problem or fulfill a need. Today, the definition of purpose has evolved.
Offering good quality at a fair price is no longer enough. For many consumers, it is about purchasing from companies with a strong sense of awareness and purpose that aligns with their values and beliefs in some way. Seventy percent of consumers feel brands should take a public stance on social and political issues — the largest age group being Millennials (80%), followed by Gen Z (75%).
Many brands are responding quickly, and consumers took notice: 67% of consumers said they noticed that brands have been raising public awareness around just cause issues. Another 62% went so far to say brands have actually educated them on important topics. If you want to win the hearts (and wallets) of consumers, look beyond the goods and services you offer and prioritize on something bigger. Otherwise, you may lose market share, which is especially true these days.
Consider how the pandemic has changed brand loyalty. Of the 75% of U.S. consumers who changed their shopping behaviors as a result of the pandemic, about 40% reported having switched brands during this time — doubling the level from 2019. While convenience and value remain the primary reasons, the need to support brands with similar values is also playing an increasing role. And with consumers four to six times more likely to buy from, protect, trust, and champion purpose-led brands, it has become more important than ever to position the values of your business front and center.
While staying true to your brand, when choosing a cause or purpose, there are a few values that appear to impact consumer choice more than others. The following are ones that often rise to the top:
Simply put, sustainability sells. Partly due to the pandemic, people suddenly have the time to reflect on issues that matter to them, with one study finding that one-third of U.S. consumers now spend more time thinking about climate-related concerns than they did before. Many of these consumers will naturally respond by directing their dollars to those companies that prioritize environmentalism, sustainability, energy efficiency, and so on — a fact not lost on many brands. Nearly three-quarters of professionals believe sustainability efforts will be critical to the success of their business going forward.
Taking up a cause like social justice and reform can be somewhat of a precarious proposition for many brands. Not that consumers believe businesses should shy away from fighting for racial, political, economic, and gender equality (among other societal issues); in fact, 65% of U.S. consumers believe brands should speak out against racial injustice. What can become problematic is being seen as opportunistic rather than authentic. If your business decides to support or align itself with a social cause, consider what other companies are also doing. For example, some companies support the 15 Percent Pledge, where they devote 15% of shelf space to Black-owned businesses; FutureLearn, offers free digital learning courses on community building and LGBTQ+ allyship; or Cathay Bank, who recently donated $1 million to support organizations that work to promote diverse communities and combat anti-Asian hate crimes and xenophobia.
The pandemic has undoubtedly put a spotlight on businesses when it comes to practicing employee and customer safety. Consumers have since gravitated towards those businesses that offer contactless shopping options, social distancing policies, curbside delivery, sanitation stations, and so on. Such new practices have almost become a staple in the brick-and-mortar space, and they are not likely to go away anytime soon. As people grow more accustomed to wearing masks, regular handwashing, and other safety precautions, it may be wise to adopt to these practices if you have not already done so.
Empathy is good for business. It is essential to understand the needs of your customer base and demonstrate how the product or service fits into someone’s life. It is also an indicator that drives the way companies communicate and interact with the public. When looking at the bottom line, empathy has a way of humanizing a brand and enhancing customer experience, making the company more relatable. This, in turn, can strengthen brand loyalty and increase sales. One study found that companies that offers more humanized experiences are twice as likely to outperform their competition in revenue growth.
The pandemic has certainly changed consumer shopping behaviors in many ways, but perhaps one of the most significant shifts is the preference to shop locally. One survey found that 65% of consumers have adjusted their shopping habits to support local businesses, with Millennials and Gen Z in particular buying local and small brands. This trend appears to have legs, as 55% of Millennials and 60% of Gen Z intend to continue shopping locally after the pandemic — as do half of Gen Xers. Younger shoppers enjoy a sense of community that shopping locally provides. Keeping dollars local also helps support the local workforce. From architects and contractors to accountants and marketers, many local professionals are employed by local businesses.
To voice your purpose in business has now become a large part of brand identity, and some would argue that it is now a prerequisite to brand success.
This article does not constitute legal, accounting or other professional advice. Although the information contained herein is intended to be accurate, Cathay Bank does not assume liability for loss or damage due to reliance on such information.