Is ethical shopping really hitting the mainstream?

05 January 2017

Uncertain shopper

Unilever recently launched a study suggesting that the ethical consumer segment – for a long time a rather small and static niche – is finally reaching out into the mainstream. 

Specifically, it said that a third of consumers are now buying from brands based on their social and environmental impact. This makes for a €966 billion opportunity for brands that make their sustainability credentials part of their brand. 

I have been suspicious of research that makes such claims in the past (yes, I want them to be true, but there’s no advantage in fooling yourself that it’s the case based on wishful thinking). Generally they have been based on opinion research where all sorts of distorting effects come into play.

Specifically, people will often want to give the ‘right’ answer, and may therefore say things that they think the researcher wants to hear. And that’s particularly the case when there’s an intuitively obvious ‘correct’ opinion to hold.

But this research claims to be different – as you might expect from a mature marketing operation such as Unilever. They say that they cross-referenced the opinion part with evident of people’s actual buying behaviours. So they didn’t just check what people thought they should be doing, they checked on what they actually did.

Sustainability credentials can support well-managed brands. They can’t save badly managed ones.

And then they also point to their own financial performance as extra proof. Unilever brands that have embedded sustainability in some way into the brand positioning – they name Dove, Hellmann’s and Ben & Jerry’s as examples – are reported to be growing 30% faster than the rest of the business. 

However, I remain suspicious of the headlines. I have no doubt that there are good possibilities here, but it’s not as straightforward as the figures suggest.

Why should I be suspicious? The first is that there is always the possible of confirmation bias. Unilever has pitched its tent very firmly on an aggressive promotion of sustainability as part of its core business. Which I love, by the way. But in the face of possibly sceptical investors and analysts, the company definitely has an incentive to be able to reinforce what remarkable commercial sense this makes.

Which it does, I believe, when well executed (as Unilever is generally doing). But when it comes to this specific research, it creates an incentive for bias that therefore justifies scrutinising the methodology more closely.

Secondly, if the headlines of this research are true, we should be starting to see more evidence of this in the marketplace. It shouldn’t just be Unilever’s brands where this is playing out. We know that ethical sales has been increasing steadily year on year – I’m not aware of anything suggesting that the overall market share of ethical goods has made any sudden major shifts.

And it was only April 2016 we had research suggesting that not only had ethical consumerism not yet reached the mainstream, it was actively looked down upon by the mainstream.

The Harvard Business Review published an article based on research that showed that standard shoppers think the people who buy ethically to be “boring, odder and less attractive.” Such people can be influenced by social or ethical information, but generally actively seek to avoid it.

Generally that ‘boring, odd and less attractive’ niche has been 10-12 per cent. Of course, it could be that it has grown to 30% and the other 70% now think there are a lot more boring and odd people around. I would need to see some really solid evidence of that. 

What does emerge from the general body of recent evidence is this. Social and environmental credentials can be a positive reinforcement for good brands. People who look down on others for making their choices solely on this criteria can nevertheless feel good about their choices so long as the brand is cool, desirable, and generally a fit with their chosen lifestyle.

In other words, sustainability credentials can support well-managed brands. They can’t save badly managed ones.

So it may well be that 30 per cent of customers are buying brands and feeling good about certain features of those brands – enough that they can affirm this when interrogated by researchers. But how many of those would actively change brands based solely on those criteria (which is really what you mean, if you say there’s a €966 billion opportunity for brands that become more sustainable)?

Probably no more than that 10-12 (or maybe 15) per cent.

The opportunity is still there. Supplementing your well-managed brand with sustainability credentials may be the thing you do to deepen your relationship with your customers – to reassure them that your brand is future-proofed and that you care about the things they care about.

Just don’t imagine it replaces the other elements of your brand in importance.

Let’s put it another way. Nobody would buy Teslas if they looked and drove like a milk float.