Being a responsible brand is being a responsible business

Being a responsible brand is being a responsible business

4 Dec 2015 14:36Marketing News

Far from being a ‘nice to have’, brands which demonstrate a commitment to sustainability now have real meaning for consumers and the resultant ability to provide healthy returns for manufacturers and retailers alike.

Evidence of this is the 2015 Nielsen Global Corporate Sustainability Report which shows that 68% of South African consumers are willing to pay more for brands that come from companies who are committed to positive social and environmental impact. This in comparison to 66% of global respondents, which in turn is up from 55% in 2014 and 50% in 2013. 

These findings stem from a Nielsen poll of 30 000 consumers in 60 countries, during which consumers were asked how much influence factors such as the environment, packaging, price, marketing, and organic or health and wellness claims had on their consumer-goods purchase decisions. 

Nielsen Africa managing director Allen Burch says; “Sustainability is a worldwide concern that continues to gain momentum — especially in countries where growing populations are putting additional stress on the environment. An increasing number of consumers in developed regions consider sustainability actions more of an imperative than a value-add."

“Consumer brands that haven’t embraced sustainability are at risk on many fronts. Social responsibility is a critical part of proactive reputation management and companies with strong reputations outperform others when it comes to attracting top talent, investors, community partners, and importantly, consumers,” he says.

This is also clear from additional findings on the South African market where in response to the question; “Thinking about the consumable brands purchased in the last week, how much influence did the following factors have on your purchase decision?” 65% of respondents stated that the products were made by a brand/company that they could trust; 57% percent said because the product was known for its health and wellness benefits and 53% said because it was made from fresh, natural and/or organic ingredients. 

Another interesting insight to emerge from the study is that it’s also no longer just wealthy suburbanites in major markets willing to open their wallets for sustainable offerings. Consumers across regions, income levels, and categories are willing to pay more if doing so ensures they remain loyal to their values. Sustainability sentiment is particularly consistent across income levels. On a broader scale, this has seen sales of consumer goods from brands with a demonstrated commitment to sustainability have grown more than 4% globally, while those without grew less than 1%. 

Brand trust

Topping the list of sustainability factors that influence purchasing for nearly two-of-three (62%) consumers globally was brand trust. 

Nielsen senior vice president reputation & public relations solutions, Carol Gstalder, says; “This indicates an opportunity for consumer-goods brands that have already built a high level of trust with consumers to evaluate where best to introduce sustainable products into the market to drive growth. On the flip side, large global consumer-goods brands that ignore sustainability, increase reputational and business risk. This may give competitors of all sizes the opportunity to build trust with the predominantly young, socially- conscious consumer looking for products that align with their values.”

Age Matters

Despite the fact that Millennials are coming of age in one of the most difficult economic climates in the last 100 years, they continue to be most willing to pay extra for sustainable offerings—almost three-out-of-four respondents (73%) in the latest findings, up from approximately half in 2014.

The rise in the percentage of respondents under 20, also known as Generation Z, who are willing to pay more was equally strong—from 55% in 2014 to 72% in 2015.

Brands that therefore establish a reputation for social responsibility and environmental stewardship among today’s youngest consumers have an opportunity to not only grow market share but build loyalty among the power-spending Millennials of tomorrow, too.