“Dear me, please tell me this isn’t another article about how I have to focus on building a purpose over profit culture in my business?!” Well - yes and no. This is an article around how one helps the other to flow. Endlessly if you do it right.
The pandemic has left emotional scars and a heightened sense of awareness around how vulnerable the world is, planetwide. Just ask anyone how they think our government handled the pandemic and wait for a war of words to erupt. For the vast majority of us, we or someone we love, were psychologically affected by the anxiety of lockdowns, fear of losing their job or loss of income, confinement, social distancing, or some degree of sickness.
I don’t know about you, but this overload of negative emotions has drastically altered how most people spend money and who we spend it with. Personally, I am now a behaviour of extremes. Spending on stuff to make me feel good (especially in my home) and cutting back on frivolous thing that just create more stuff, although my husband wouldn’t agree based on my latest shoe purchase! Then investments in stuff that give me back more quality time and less stress (my purchase of the Farro Christmas Food Kits as soon as they were advertised is one such example). Not only have people around the world tightened their purse strings in fear of “what if,” but many have decided that when they do spend their money, they’re going to do it with brands that reflect their personal values.
Conscious consumerism means consumers deliberately make purchasing decisions that they believe have a positive social, economic, and environmental impact. And this isn’t a new concept - we also saw a surge after the GFC in 2008. What unfolded then was a change in emotional values, in which brands started to shift their narrative towards. So, we are seeing this happen in a more amplified state as we all see the very real consequence on our doorsteps from businesses going into receivership (Mt Ruapehu’s response to covid closures and poor weather), the growth in food banks and lack of housing, downsizing in businesses, the list goes on. The woes of the world are impacting us all and the power we yield is our spending power.
Whether you believe it or not this is a mega-trend that means business and brands will be impacted. Being good, in a market where we now have five generations of shoppers, will become the new bigger, better, faster.
We cannot escape the responsibility we each face, as all business processes have an impact on our environment, on people, on economic communities and sometime on politics and human rights. Some impacts are positive – and some negative. Customers now recognise that their choices matter and that purchases support businesses to function and prosper. No one wants to be fuelling a company to deliver the negative effects on our world.
THE WORLDS BEST CASE STUDY IS HAPPENING RIGHT NOW
Image courtesy of Patagonia
'No commercial, no billboards, no campaign' - when Patagonia founder Yvon Chouinard announced he would be donating all company shares to charitable causes, he wrote a letter.
Outdoor retailer Patagonia has raised the bar for value-driven commitments. And the world is watching.
Earth-loving Patagonia is making good on their promise in an exceptional way serving as a reminder to businesses everywhere, that values shouldn’t rest at the surface.
Ninety-eight percent of the company’s non-voting stock will be transferred to environmental non-profit Holdfast Collective. The remaining 2% is voting stock and will be used to fund the Patagonia Purpose Trust that will work to develop a legal structure that helps encapsulate the brand’s values. Every dollar not reinvested into Patagonia will be used to protect the planet.
The company projects it will pay out an annual dividend of about $100 million a year, per their press release. Despite Chouinard describing himself as the business leader he never wanted to be, his announcement will strengthen brand loyalty and love.
This year, 94% of consumers report that they want to live a sustainable lifestyle, according to Kantar’s 2022 Sustainability Sector Index. Further, 49% report they believe buying sustainable products is a demonstration of who they are and 57% say a clear explanation of how a brand is bettering the environment would drive them to buy.
SURE, BUT HOW CAN I MAKE A REAL IMPACT IN THE WORLD?
Let’s face it - you are already doing something, and I can bet it is in your strategic plan as a key pillar. It’s probably in sustainability or partnering with a charity or cause. It might be something related to your community or employee benefits or balance. But you need to get under the skin of making real change (and it may take longer than you would like) and design products and services specifically to address pain points.
1. Lead with empathy
Brands are no longer just in the business of selling products or services. Now, you must also lead on environmental sustainability AND social justice AND communicate your commitment to driving change. That’s why Patagonia and REI are poster-children for what great looks like. They are totally authentic and identified a problem before the market did. As a result, they have a strong sense of mission that resonates with consumers and provides a compelling narrative that builds trust.
Where do you start? Conducting customer research and journey mapping will help identify opportunities, understand what consumers really care about, learn how users experience products and services and identify gaps in the market.
2. Define your connection to purpose and value
It’s likely that your business and partners are facing significant challenges around sustainability right now. From raw materials shortages or rising costs, manufacturing processes that use toxic chemicals, disposable products that create excessive waste, migrant worker exploitation... where does it end? These issues create challenges that need to be solved, as well as generating opportunities to drive ROI. Whatever the issue, this is a great time for partnering cross sector with innovators and even competitors, around the challenge of driving significant, faster change that reduces risks and costs and creates value by addressing consumers’ needs and interests.
3. Rethink what aspects of conscious consumerism you can make the most impact in
It can be difficult to identify how to embed sustainability into your existing business model without massive upheaval. Try starting small and then make bigger impacts in other areas. Perhaps it’s wins earned over time in carbon, water, products, packaging, waste and supply chain. Or you could make a larger impact through the lens of social justice. By focusing on areas and understanding social challenges, you can explore commercial opportunities and drive change. A wonderful example in NZ is Foodstuff’s partnerships with various organisations such as Wellington City Mission and Te Kahu Oranga Whānau in launching four social supermarkets. Foodstuff’s leveraged their commercial capabilities to drive change and enable organisations who help bring about social change to connect with people in need in a community environment, rather than just handing out food parcels. It gives dignity and independence back to those in need and connects them into a loving network.
4. Develop a holistic strategy
If sustainability is your key focus, make it tangible for your business by developing a strategy to address carbon, water, products, packaging, waste and your overall supply chain. You’ll want to consider interdependencies between issues and trade-offs between different choices. For example, it may make sense to focus on just one or two issues to start, but you’ll need to make sure new decisions don’t create negative consequences across other key areas.
This process may involve creating new business models, finding new value streams, or developing new partnerships across businesses and sectors. A great example is the recent UK-first trial by Lidl of on-shelf smart refills.
5. Start small and scale fast
Medium to large businesses are cumbersome and can often take months or years to analyse a problem and pilot a solution, by which time consumers may have already moved on. Speed of change is critical – so keep your focus tight, but implement fast.
This isn’t a fad – it’s a mega trend
Conscious consumerism isn’t a passing fad, it’s an important trend that will impact all consumer-facing brands now and for years to come. Customers want to support companies that share their values, focusing on people, planet and profit. They’ll want to know which raw materials you’re buying, how they’re sourced and used in production processes, what steps you’re taking to green your operations and who you work with. They will hold you to account on how you treat your people, give back to communities and govern your business ethically.
Ensure you and the whole organisation are prepared for the journey, are up front about what you are capable of, and most importantly what your customers care about. It’s Ok to start small – but start now, otherwise you could become the passing fad!
IF NOT YOU, THEN WHO? IF NOT NOW, WHEN?