As the Millenial and Generation Z consumer power grows, the way brands appeal to consumers is changing. A study conducted by Accenture in 2018 found that 64% of American consumers consider a company’s ethical values and authenticity when purchasing products. The socio-political climate has consumers questioning who the companies that they support donate to, or how these companies treat the environment. This skepticism of corporations is not completely new. There was a similar interest in brand ethics during the 1970s and 80s with the student-led movements to disinvest in the South African Apartheid. Consumers are being encouraged to use their buying power to demand things from the brands they purchase and the services they interact for the causes that they care about. If there’s a company that uses questionable labor practices or harms the environment, consumers feel free to call them out if or make a change to their consumption if those practices don’t align with their values.
Ethics and Values
Brands are starting to market themselves beyond the traditional logos, mascots, and jingles. For example, Nike is moving away from their typical athletic inspirational commercial and towards more blatantly political statements like in their ad that featured controversial NFL player, Colin Kapernick. Or brands like Aerie, a sleepwear and lingerie brand by American Eagle, that publicly committed to using all types of models on its site and stop photoshopping to make a statement about body diversity and inclusivity as a part of the #aerieREAL campaign. Even lesser-known brands in the United States are spelling out who they are for American consumers. For example, MINISO, a Japanese brand, lays out their entire brand profile on their website to give patrons an idea of who they are, where they’re from, and what they stand for.
Risks and Rewards
Being so transparent about your brand ethics and practices can be risky. For every person who agrees/supports it, there’s a person that doesn’t. Companies that speak out on social issues run the risk of being boycotted like Nike did when it released the commercial featuring Kapernick. Due to the controversy that the commercial and subsequent boycott stirred up, people found themselves talking about Nike, which translated into sales, which according to Vox, made Nike nearly $6 billion. Which means the risk of transparency can be worth the reward.
Staying quiet about your company’s practices and ethics can be risky too. People find it suspicious and with social media, consumers are able to have a direct dialogue with companies that is hard for them to ignore. For example, an incident with the musician, SZA, at a Sephora in Calabasas, caused her to tweet Sephora to challenge their accountability when it comes to how sales representatives treat customers. SZA’s tweet empowered others to also directly tweet at Sephora about their experiences with discrimination at their stores. Sephora responded to this ethical challenge not only by tweeting an apology but by also closing all their stores for diversity and inclusion training, cementing their commitment to diversity.
Consumers are taking the time to assess themselves and what they care about and brands should too. A company’s beliefs is a way to sell yourself beyond just a product or service. This transparency gives consumers a sense of an intimate relationship with the brand and helps with building brand loyalty in the future. It’s not a risk free marketing strategy, but it has become rather popular recently and will only continue to thrive given the easy access to information and the expanding consciousness of consumers.