In the wake of the devastating events of 2020 that have rattled the American market, consumer purchase behavior has changed. They are now voting with their wallets and sounding alarms of disapproval like never before. Mindful consumerism has never been a more accurate maxim to describe the new consumer reality.
Change in Consumer Priorities
It is beyond question that consumer purchase behavior has changed drastically. In a time when survival and social equality have become society’s top priorities, more and more companies have come to realize social impact is a baseline requirement when marketing to today’s modern consumer.
Traditional marketing is failing. 2020 has fundamentally changed the world. The ways that we live, buy and think have made seismic shifts. Long-term trends have been accelerated; catapulting the changes previously forecasted to occur over the next few years into reality today. Take a look at this infographic by Mckinsey & Company. It illustrates how many of the current consumer trends are accelerations of past behaviors.
What This Means
Due to these changes, businesses can’t afford to neglect the role that social responsibility now plays in boosting profits. As the Global Leadership Forecast notes, purpose-driven companies outperform financial markets by 42 percent. Consider these findings by Porter Novelli and Porter Novelli/Cone:
- 81 percent of Americans are more likely to purchase products or services from a company with purpose in its messaging
- 90 percent of Generation Z believe companies must actively engage in improving social and environmental change
- 75 percent will go as far as researching whether a company actually enacts its stance on social issues. Making incontestable authenticity paramount.
Purely self-serving discounts are no longer effective today. As a matter of fact, predictions show 71 percent of Millenials will pay more for a product if they know some of the proceeds are donated to charity. And with cancel culture at a fever pitch, over-discounting (/tone-deaf messaging) almost guarantees backlash that would devastate KPIs. Merely relying on discounts when virtually every area of life has changed exposes a huge misalignment between consumer and brand, signaling a blatant lack of purpose.
Not only are companies required to take a stance on major social issues, but they also need to be authentic. Gone are the days when you could simply cut a sizeable check or issue a strong statement. The change in consumer behavior now means that brands are consistently being held accountable for their actions (and inactions).
The Racial Reckoning
Take Sharon Chuter, Uoma Beauty CEO, for example. She initiated the “Put Up or Shut Up” campaign, urging companies that have expressed public condemnation of racism to share the number of black employees within their workforce demographic. The movement instantly went viral with severe backlash for those with under-representation and immediate calls to remedy. In 2020, businesses that fail to deliver on their promises, as seen in countless cases, risk becoming victims of the growing cancel culture trend and increased negative commentaries, both from internal and external critics, across various mediums.
Facebook was a prime example of this when it refused to flag President Trump’s controversial comment on the George Floyd protests, despite having donated $10 million to groups perpetuating America’s racial reckoning.
Over 1,000 companies cut spending on Facebook ads by millions of dollars in a boycott entitled #StopHateForProfit. Nonetheless, the social media company’s reputation was likely what felt the effects of the digital embargo, rather than its profit margins. Since then, there’s been an increase in distrust of Facebook and its sister apps, along with a surge of scrutiny of Facebook’s CEO, Mark Zuckerberg for what is being deemed amoral, feckless leadership.
By the same token, brands that do not communicate a stance or speak up on social issues invite the same, if not a worse, fate. Cultural incompetence is a huge green light for mass exodus, particularly with Millennials and Gen Z — the market’s two most powerful influencers. Consumers are voting quite literally with their wallets, refusing to support companies that don’t align with their values. And they’re making it known. Even going as far as to condemn others who support those brands.
A Global Health Crisis
On the subject of social impact, the devastation of the global health crisis has caused seismic disruption to the order of consumer priorities. Every aspect of life has changed and for months, consumers were the captive audiences to the pain and suffering of our family, friends, neighbors, and essential workers. That caused a significant change as consumers felt helpless. The response has been a more mindful consumer — one that no longer feels comfortable making frivolous purchases that won’t help relieve suffering or help restore normalcy. Consumer purchase behavior has changed so much that they now actively monitor businesses to see if they are donating to COVID-19 relief efforts.
Undeniable Climate Crisis
Pandemics and social issues are not the only pressing matters on consumers’ minds. Climate change is making swift progress in that regard, and businesses have to take calculated measures to employ consumer-prioritized sustainability in their practices and every aspect of their businesses. Ambiguity must be eradicated in 2020. A key takeaway from how consumer purchase behavior has changed is they now demand two things: actual authenticity and full transparency for the most valued currency of exchange — trust.
Success and Authenticity
To secure lasting customer loyalty businesses need to do a few things:
- Don’t just talk the talk; walk the walk. Hypocrisy will suffer damages and they’ll be seen as being part of the problem.
- Banish inauthenticity. Be transparent and intentional.
- Convert discounts to donations to signal an incontestable commitment to impacting change. This is a proven strategy for driving significant sales while securing lasting loyalty.
Remember: Inaction is perceived as an action — and it’s typically an unfavorable one. Act now before the sirens of financial and socio-economic disaster come calling.
Making an Impact
Doing good is great business. According to a new study in the Journal of Consumer Research, consumers believe products of socially responsible companies are of better quality. And checkout donations, when used by companies like Amazon and eBay, have had buyers spend 26% more, an increase of 29% in sales, and a 67% decrease in customer churn rate.
People inherently want to give, Givz connects the digital dots to power immediate social impact. Founded in 2017 to create a seamless and transparent donation experience, today Givz is the leading purpose-driven marketing technology that enables brands to do good while driving conversions and meaningful engagement.
We do this by converting discounts to donations. Once a customer makes a purchase performs any desired action, you reward them with charitable dollars to donate to any U.S. charity of their choice.
- 20 percent increase in sales
- 75 percent cost-reduction compared to discounts
- 7x customer engagement
Although consumer purchase behavior has changed, navigated correctly, these changes bring a wealth of opportunities for growth. Email us today to learn how we can help you to sell more and spend less while meeting new customer demands.