Consumption and the Growing Importance of Shared Value
Over the past decade, brands have made a shift to balance profitability goals with having a mindful purpose. A study by the University of Iowa found a direct correlation exists between brands with extensive corporate social responsibility and lower stock risk during down economic cycles. This brand loyalty is particularly found with brands that support environmental issues.
As millennials account for the over 95 million digitally connected Americans, they also possess a keen desire or ‘socially conscious’ to make a difference. Recently a growing number of studies have reported on the strong desire of millennials to embrace brands that support a cause they hold dear. Some studies have even labeled millennials the most aspirational generation.
A recent Nielsen survey found that 42% of 18- to 34-year-old millennials believe a response following a posting a complaint or comment regarding a brand should be received on social media within 12 hours. While millennials may not have the cash flow of older customers, brands have realized the possible consequences a negative comment could have on their brand image and sales and have taken greater steps to please millennials and to intercept their complaints prior to becoming viral.
This new shift in conscience capitalism is evident not only in what we purchase, but also how we cater to our customers. As is evident by the U.S. auto industry bailout in 2008 as GM, Chrysler and Ford were trying to avoid financial disaster. Feeling the effects of the financial collapse and burdened by gasoline prices hovering near $4 a gallon, consumers were ready for new solutions. Yet these industry giants lacked innovation and failed to listen to their customers as they continued on the path of business as usual.
During this time, Elon Musk, TESLA Motors CEO and Chairman, was on a mission to replace fossil fuels by changing the world by offering clean and renewable energy sources and reintroducing the electric vehicle. The EV1, sold during the late -1990’s to 2002 was not as fortunate as evidenced in the 2006 documentary, Who Killed the Electric Car?. When you contemplate the fact that more solar energy strikes the surface of the earth in a single hour than is provided by all the fossil energy consumed globally in a year, then the answer seems obvious. Now fast forward from the 1990’s and in a little over a decade, innovation may win this time around, and older brands may start offering the solutions that consumers are demanding rather than remaining on a path of resistance.
Public relations firm, Edelman conducted a global survey in 2012 and found that 72% of consumers responded they would recommend brands to others if they supported a good cause. Given this strong statistic, marketers should be keen to ignite corporations to evolve the various ways they envision, produce and market their products. The main selling point being, if they don’t, they will fall by the wayside.
By Tamar Burton