Consumers are willing to pay premium for ethically produced goods- Survey
By Zion Rufus
Ethical consumerism has emerged a powerful force driving purchasing decisions in today’s shifting consumer landscape.
The growing interest in issues such as sustainability, social responsibility, and ethical practices has led consumers to align their values with the brands they choose to support.
A recent survey by pwc highlights this trend, revealing that more than 70% of respondents are willing to pay a premium for sustainably produced goods.
The survey, conducted in February 2023, demonstrates a significant shift in consumer mindset. Individuals are now actively seeking products that reflect their social concerns and are willing to invest more in sustainable options.
According to pwc’s June survey, eight out of ten consumers are willing to pay above-average prices, with 10% willing to go as high as a 30% premium. Millennials and Gen Z, known for their social consciousness and environmental awareness, are particularly inclined to prioritize sustainability in their purchasing decisions.
In some markets, this changing consumer behavior poses a challenge for brand marketers and companies.
However, understanding what matters to your target market and effectively communicating your brand’s position on ethical issues is crucial.
In another study, 92% of respondents revealed that they have a more positive image of a company that supports a cause they care about, with 15% stating they would be more likely to pay a higher price for such products or services.
As consumers take a macro view of ethics in business, differentiation becomes crucial, especially in industries such as FMCG, Media, Energy, and telecommunications. Hence, a clear communication of a brand’s ethical stance becomes even more paramount. Feedback from consumers is also valuable as it provides insights on how to better appeal to ethical consumers.
Meanwhile, while a brand’s ethical activities alone may not directly impact purchase decisions, the ethical consumer market presents a real opportunity for brand marketers.
Creating context and understanding how consumers want to engage and make their purchases is key, and by aligning values, providing transparent information, and offering sustainable choices, brands can effectively tap into this growing market and build lasting relationships with ethical consumers.
For brands targeting ethical consumers, here are some key points to consider.
Packaging
Packaging plays a vital role. Labeling should clearly highlight ingredients, sustainability initiatives, and industry certifications to appeal to the values-driven consumer. Unilever and Nestle are examples of brands that continuously emphasize their commitment to sustainable living, diversity, and inclusion.
CSR
Where some brands have explored corporate social responsibility which cannot be overstated in today’s market as it bridges the gap between brands and consumers, fostering brand loyalty when values align, others have incorporated philanthropy and altruism into their culture, particularly through initiatives that resonate with ethical consumers, and collaborations with local NGOs that share similar values.
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