It’s no longer enough to talk a good game. Consumers today demand that businesses act—this means behaving responsibly, sustainably and ethically, and making a positive impact in the world. We are moving from the era of thought leadership to “do leadership”, where storytelling becomes “story doing”. Brands that fail to do, face becoming irrelevant.
Consumers call bullsh*t
We can be the first generation that ends poverty and the last that avoids the worst effects of climate change. Former UN Secretary-General, Ban Ki-moon
As this quote demonstrates, the stakes have never been higher and the world’s youngest generations demand that businesses are equal to the challenge. Many young consumers today describe themselves as belief-driven buyers, with a third (37 percent) of Millennials willing to boycott a brand based on its ethical behavior.
But, the benefits are there for the taking too. Kantar’s Consulting Purpose 2020 report found that brands recognized to have a high commitment to purpose have experienced a brand valuation increase of 175 percent over the past 12 years, compared to the average growth rate of 86 percent.
To reap those rewards, organizations must play the active role with authenticity. One of the world’s largest ‘fast fashion’ retailers created a range of clothes made from at least 50 per cent sustainable materials. But when fashion is the world’s second most polluting industry, offering a small range of somewhat-sustainable clothing is a drop in the warming ocean. A business model that encourages customers to frequently buy and discard clothes is looking increasingly irrelevant for today’s conscious consumers.
On the other hand, Tommy Hilfiger’s Adaptive range, which provides fashionable clothing for disabled customers, is an example of authentic action that remains true to its already established brand position: with the American Dream, everything is possible for everyone.
Landor’s brand take-outs:
So, how can brands strike the balance of taking a stand, while avoiding the pitfalls of faking engagement and action?
1. Create win-win business models for consumers and companies
Consumers say they will change their purchasing behavior based on how a business acts. But don’t assume this means they’ll pay more. We expect price to remain a priority in 2020 and brands must create business models that meet customer demands, without expecting a premium. Attracting Millennial and Gen Z customers is the reward.
2. Triple bottom line is the future
Social responsibility is central to a brand’s position. It’s not an add-on. The triple bottom line is a framework that includes social, environmental and financial results, and is increasingly how consumers and investors will measure those they do business with.
3. CSR-native brands are already here and traditional brands need to catch up
A brand created today has purpose built into its business model. For those that don’t, they must find their own ‘brand’ of CSR, one that is relevant and authentic, and couldn’t be delivered by any other brand.