April 22, 2022 in Latin America, Impact, datatech for good
Read the stories of the founders that are creating innovative products and services that improve the housing conditions in the Andean Region.
Earlier this year, Unilever, one of the world’s leading consumer products companies, made the business page headlines when Terry Smith, head of Fundsmith, a major investor in the company, complained that the management team was “obsessed with publicly displaying sustainability credentials at the expense of focusing on the fundamentals of the business”.
His comments sparked a debate about the increasing interest brands have in implementing initiatives designed to generate positive social impact. Some commentators agreed with his sentiments and remarked that Unilever’s leadership was out of touch with shareholders and the market. Others have suggested that having a clear brand purpose and undertaking programs designed to benefit society are critical drivers of demand for today’s consumers, especially millennial and Gen Z shoppers.
There is no shortage of data to suggest the latter view might be true. According to a Cone study, 90% of Gen Zers think brands should act to help social and environmental issues. In a more recent survey by Razorfish, 82% of consumers indicated that brand purpose affected their buying decision, and it outweighed discounts as a reason to choose a brand.
For marketers, these studies provide much food for thought. However, they are often focused on consumers in developed countries. What do consumers in emerging markets think about brand purpose and impact initiatives? Are they more likely to buy from brands that support good causes?
My company, Moneo, operates a cashback rewards and shopper data platform in Mexico. We recently surveyed our users to get a better idea of what they think about these issues and how they affect their buying decisions.
*****
Consistent with global studies, a clear majority of consumers (80%) indicated that it’s important or very important for them that brands generate positive social impact. The highest scoring group was Gen X (84%), marginally ahead of Gen Z (83%), which perhaps suggests that generating positive social impact is now a key issue across all age groups.
The types of initiatives most valued include creating environmentally-friendly products (75%), helping consumers save money (58%) and supporting social causes and charities (45%).
A further noteworthy finding was that, when purchasing a product, 71% of participants said they would choose a brand that confers a personal benefit over a brand that supports a broader social cause (29%).
Examples of personal benefits that Mexican consumers would like to see brands provide include savings accounts and health insurance. Indeed, these benefits are more popular (75% would like brands to help them create a savings account) than traditional brand promotions, such as product discounts (45%).
It might, therefore, behoove brands to make their impact objectives more relevant to consumers by defining them on a market-by-market basis and by linking them to personal benefits. Indeed, the interest Moneo users expressed in savings plans and insurance products opens up some tantalizing opportunities for reimagining how brands can deliver extra value to their consumers.
Instead of investing in conventional discounts and BTL promotions, for example, they could incentivize purchases by depositing cash rebates into savings accounts. Or they could subsidize micro insurance payments or mobile data plans.
Such a model could help brands generate both loyalty and positive social impact. It would enable the management team to align business goals with impact objectives, thereby meeting shareholder and consumer expectations. It would also represent a novel way to tackle some of the major societal problems often found in emerging markets by reducing the cost barriers that currently impede access to essential services. Best of all, the results would be easy to measure and communicate, which would protect brands against accusations of “purpose washing” -- the idea that companies launch projects more to generate positive PR than positive social impact.
Ultimately, big companies, such as Unilever, are right to be sensitive to changing consumer concerns. Across the world, shoppers want and expect brands to do more than just sell them products. At the same time, shareholder disquiet about business focus and use of resources is also justified. Based on the results of the Moneo survey, if companies sought to align impact goals with local market needs and to offer a mix of societal and personal benefits, perhaps all stakeholders could be satisfied.
Sam Carter, Co-founder & CEO, Moneo
Moneo is a part of IBM’s Hyper Protect Accelerator and a member of Village Capital’s Datatech for Good Coalition.
Click to see the report “Do brand social impact initiatives matter to Mexican consumers?”
