The latest CommBank Consumer Insights Report reveals shoppers are now more conscious of purchasing from purpose-led brands than prior to the pandemic.
According to the report from Commonwealth Bank, 53% of the consumers surveyed are willing to pay more to buy from purpose-led businesses.
While value for money is the primary driver of shopping behaviour for 41% of the respondents, almost one in five are willing to pay more than 10% extra for goods and services sold by a business with a strong purpose.
Younger generations are at the forefront. The percentage of those willing to pay more declines sharply with age, ranging from 71% among generation Z to 38% of pre-boomers.
The pandemic, says Commonwealth Bank, has been a “primary driver” to more than a third of respondent’s reassessing their priorities and making deliberate choices about where they shop and what they buy. The value of purpose varies by category and is highest for food and beverage, recreational goods and personal care services and products.
“The report findings show the powerful influence of purpose and how it can increase a consumers’ loyalty, advocacy and spending,” says Commonwealth Bank Executive Manager, Consumer and Diversified Industries Jerry Macey.
“The pandemic has accelerated a shift in Australian consumer habits and we have seen how shoppers are looking for their own values to be reflected back in the brands and businesses they support.
“Despite this trend emerging from the pandemic, the focus on instilling a social purpose will likely continue for the long term. Consumers have made it clear they are looking for an authentic, all-encompassing approach that is embraced throughout the organisation.”
Benefits for purpose-led businesses
Purpose-led businesses benefit in a number of ways, says Commonwealth Bank.
Respondents say they are more forgiving towards a brand with an authentic purpose (38%) and will “actively” seek them out (35%). They are also more likely to “regularly” shop at (35%) or invest in (31%) purpose-led brands.
Keeping it genuine
Commonwealth Bank highlights Pablo & Rusty’s Coffee Roasters. It’s claimed that 26% of the roaster’s customers buy from them because of its purpose.
Pablo & Rusty’s CEO Abdullah Ramay hopes to positively impact people and the environment through coffee. He believes it can be done without sacrificing profitability, yet the change needs to be genuine.
“The consumer makes the judgement call, and they are very invested in the brand, which is powerful for growing the business,” he says.
“Being purpose-led is a medium-to-long-term journey that brings clarity and easier decision-making. Simply running two marketing campaigns will not suffice and businesses that make empty claims will lose customers.”
Mr Macey adds: “Purpose is important, but it needs to be authentic in order to add value.
“Today’s consumers are very well informed and can quickly determine whether a brand is genuine about the causes they support. Their connections with brands are often personal, and so they are likely to feel personally let down if brands fail them with inauthentic, short-term campaigns.”
