By James Fox, Associate Director, Canvas8
Consumer loyalty is on the decline. According to research from Nielsen, just 8% of people consider themselves firmly loyal to brands. Nonetheless, brand advocacy matters – 52% of consumers according to Harvard Business Review who have actively discouraged others from using a brand say they’ve also actively recommended brands. This is especially relevant among younger consumers – 82% of Gen Zers say they trust recommendations from friends and family more than any other source when deciding what to buy. So, with budgets tightening and social media leaving them more open to scrutiny, how can brands build and strengthen loyalty, especially with younger shoppers?
In an effort to understand this, we interviewed Dr. Charlie Ranscombe, an expert in product design in the field of aesthetics and brand identity. “Younger generations aren’t sampling an experience to find the easiest or quickest solution. They’re sampling it to try and see how that brand aligns with their values and fits in with their pre-existing system of processing ‘is this cool? […] They don’t want to subscribe to something that, in three months’ time, they find out is completely unethical and problematic…” he explains. Ranscombe also argues that people value longevity and shared community over perfection. “The way that we consume mass-market products hasn’t changed a great deal since the 1950s. Make more stuff, consume more stuff, show your status or your success by getting an incrementally better version of stuff,” he says. “Younger generations have just figured out more quickly that it’s not a sustainable way to live.” In fact, 45% of Gen Yers and Zers in the US claim they refuse to buy from non-sustainable brands and retailers.
The cost of living crisis is a worldwide phenomenon. In the UK, inflation hit 9.1% in May 2022 and in the US it’s as high as 8.5%. From soaring prices on cheap food options like budget pasta increasing by as much as 50% to record high fuel prices, consumers are feeling the pinch across the board. As prices continue to go up, people are clearly going to be looking for ways to budget but brands have to avoid cutting costs at the expense of real values.
The war in Ukraine, economic uncertainty and the ongoing impact of coronavirus do present immediate problems but climate change is just as much of a threat to the world, and ignoring environmental priorities could have significant long-term implications for brands. Globally, 86% of people want to see a more sustainable world post-pandemic. And consumers are becoming wise to the dangers of low-cost, high-volume production. For instance, 82% of Britons say they’d be more likely to use a company that makes an effort to mitigate waste or recycle and 4 in 5 Americans believe companies have an obligation to disclose the environmental impact of their operations. Even with financial pressures, eco credentials matter. We found that 55% of low income earners in the UK and 44% in the US say that environmental impact matters when choosing which brands they buy from.
At the same time, people are becoming increasingly cynical about greenwashing tactics, and are looking for brands they trust to give them clear, accurate information. In the UK, 83% people say they feel misled by green and sustainability buzzwords, and 68% of consumers in the US say that they plan to increase efforts to identify brands who are reducing their environmental impact. So how can brands align themselves with eco-cynics, and make real change? By making sustainability an integral part of their business, demonstrating to consumers they aren’t just bandwagon jumping and by taking responsibility for the entire lifecycle of their products.
Tapping into this demand, smaller brands like Singapore’s Crust Brewery and Finland’s Koskenkorva Vodka have been built with sustainability as part of their foundation. But established brands can make meaningful changes even if sustainability is a relatively new part of their business. For instance, Patagonia’s efforts to educate consumers on garment care and eco-friendliness and their transparency about unavoidable carbon impact. And with an eye on extending product lifecycles and the circular economy, Nike has launched Nike Refurbished for lightly-used returns, Miu Miu unveiled Upcycled by Miu Miu featuring vintage dresses that have been remodelled for modern buyers, and Gucci has partnered with the resale site RealReal.
As people become more aware of the consequences of their purchasing behaviours, they’re looking to drastically reduce their carbon footprints and stick with brands that help them do it. In the UK, spending on ethical products is close to reaching £122 billion and 70% of North Americans already try to shop from eco-friendly brands. Meanwhile, notoriously unsustainable fast fashion giants like Boohoo and ASOS are recording declines in sales and seeing their share prices plummet as people turn their backs on throwaway culture. Looking ahead, it’s more important than ever for brands to build resilient lifecycles for their products if they want to deepen consumer loyalty. And if brands take action on sustainability even through an economically rocky period, they will be rewarded by the ever-increasing number of ethical consumers. After all, green shoppers are projected to make up over half of the global population before the end of the decade.