MOUNTAIN LAKES, New Jersey — The modern consumer is increasingly aware of the impact purchasing habits have on society. This can be seen through labeling campaigns along with product lines that boast a brand’s friendliness toward the environment and ethical labor practices. Though this reveals a desire on the behalf of businesses of all sizes to have their products viewed as positive global influences, a deeper question still remains.
Is it profitable to help the world’s poor? The answer is complicated.
On the one hand, there is a 2014 Nielsen poll which revealed that 42 percent of North American online consumers are “willing to pay more for products and services provided by companies that are committed to positive social and environmental impact,” while 55 percent of global consumers feel the same way.
What this reveals is that consumers desire to engage companies they feel are committed to a positive impact. This engagement brings valuable income to brands devoted to a positive ethical impact, but more importantly, it brings them valuable advertising. A business professor from the University of Texas, Julie Irwin, writes, “consumers walk around with Whole Foods branded merchandise all the time; it is difficult to find similar examples for less ethical retailers focused solely on price.” In fact, many less ethical companies find their reputations consistently damaged by boycotts and bad press.
New companies have responded to this by making international humanitarian efforts part of their identity. New York glasses company Warby Parker, for instance, proudly boast of training eyeglass makers to make cheap and affordable pairs of glasses in the developing world for every pair of glasses sold. Canadian sock vendor Cole and Parker provides loans through the financial nonprofit Kiva for every pair of socks sold. Shopping sustainably, humanely and charitably is a source of pride for consumers and it serves the best interests of companies to have their brands associated with that pride.
On the other hand, only 32 percent of customers regularly check labels on issues of sustainability or global economic development. Furthermore, a study by Kristine Ehrich printed in The Journal of Marketing Research revealed that consumers who oppose certain practices by companies, such as child labor, are actually less likely to seek out information relating to a company’s use of child labor. These practices on the behalf of consumers makes it easy for companies to manipulate their image through marketing instead of meaningful action. Buzz words such as “sustainable” are used to create an image of a company which engages environmentally and socially, while these claims often have little to no basis in reality. In environmentalist circles, this practice is known as “green washing.”
Many companies also attempt to establish a good reputation by offering a line of products designed to engage in charitable efforts within their brand while the brand as a whole ignores these efforts. Coffee giant Dunkin’ Donuts, for instance, offers a Fair Trade Certified, or FTC, espresso line, which includes Cappuccinos and Lattes. Yet other Dunkin’ products lack the label. For the charitable company to become the normative business model, consumers must demand brands that make these efforts a part of their identities and not simply limited engagements to raise the reputation of a brand.
The desire to be ethical consumers is clearly present. For ethical consumerism to succeed; however, there must be a deeper willingness to research brands before buying them. With communication technologies and a wide array of labeling campaigns, the ability to research has never been easier. With a more socially aware market, ethical companies could become the norm, and the unjust power dynamics which have dominated the market can shift.
– Andrew Michaels
Sources: Warby Parker, EWF International, Nielsen, Harvard Business, Cole and Parker, Dunkin’ Donuts, The Guardian
Photo: One French’s Thoughts