Consumers are likely to hold companies to account following the COVID-19 crisis. But the question is - to what extent? And, importantly, how will business respond?
Following research we conducted in January, The Purpose Pulse , we wanted to understand how perceptions have changed over the past few months and how recent corporate actions and the current environment may impact future consumer behaviour.
According to our new data, an overwhelming 77% of the population believes that companies and brands have a broader social purpose, beyond selling their products and services, to help in the fight against coronavirus. And whilst two thirds are positive about how the response from companies has been, over half say they would be likely to boycott a brand they think has behaved badly during this time.
So, how are consumers expected to reward good corporate behaviour? Well, not only with customer loyalty but also with what we call a ‘purpose premium’. Our data shows that 63% say they would favour a product or service from a company that acted in a socially responsible way during the crisis, with 38% saying they would be willing to pay more for that product or service - and the largest group (43%) being prepared to pay 5 - 9% extra. Indeed, 8% would be prepared to pay a whopping 10% more. And who will be the winners and losers of this trend? In general, it seems that supermarkets - who introduced dedicated shopping times for the vulnerable and NHS staff, increased staff pay and made significant donations to food banks - are viewed most positively. And whilst the list of irresponsible companies varies, it seems a few villains have lodged in public minds with the likes of Sports Direct, Virgin and Wetherspoons featuring more regularly.
However, it’s not enough for companies to rely on traditional philanthropy and charitable donations - less than half of respondents think this is important. Consumers now expect more in terms of responsible business practices - 87% would like to see the fair treatment of staff, 84% want companies to find safe ways to provide their goods and services, 76% believe facilities should be adapted to deal with the ongoing crisis, and 74% think employees should be allowed to work from home for as long as necessary.
Furthermore, the majority of the general public (70%) expects employers to share the cost of the government furlough scheme from August onwards.
Looking to the Future
Beyond consumer behaviour, the COVID-19 crisis appears to be shaping the wider hopes and fears people hold for the future. For the moment, COVID-19 dominates people’s concerns for the future but we found it interesting that climate change is still prominent in second place with 58% of respondents, ahead of economic concerns about job security and home ownership, at 55% and 48% respectively.
It’s also revealing to note the comparisons specifically for Millennials and Generation Z with the pre-COVID data we compiled for the original Purpose Pulse report in January.
Whilst previously climate change was top of the agenda for these younger generations, in today’s world it slips to second position, and COVID-19 predictably takes over as the biggest challenge. Whilst other concerns around job security and gender and racial inequality remain the same, there is a 10% fall in worries about home ownership - perhaps due to perceptions that the property market will be more accessible in the future, or maybe just that house buying isn’t a priority for the time being.
Interestingly, government has benefited from this crisis in terms of perceptions amongst these audiences, with trust in government to solve today’s challenges increasing from 33% to 39%, and concerns about political instability falling by 20% (from 65% to 45%). Trust in business has remained the same.
However, in terms of their outlook for the future, unsurprisingly the number of Millennial and Generation Z consumers who say they were ‘excited’ about the future has dropped from 38% to 24%. Indeed, we are all aware that the impact of COVID-19 on future generations will be significant - depending on the action we take now.
We have seen how businesses have adapted to the current environment and have either stepped up to the challenge to support broader society - or not.
And, as the lockdown restrictions continue to ease and as companies prepare to reopen, what happens next? It may be difficult for some to repair the damage caused to their reputation during the crisis - consumers won’t easily forget those very public mistakes. But for businesses that have behaved responsibly - treating employees fairly and making a positive contribution to society - the trust they have built up will likely help them through a difficult recovery.
There can be little doubt that socially responsible and purpose-led businesses will be better equipped not just to survive these difficult times but will also be in a stronger position to navigate the new landscape. There is a lot of talk about “building back better” and we would be foolish not to use this opportunity to do just that, and create a more sustainable and equal world that benefits everyone.
For a copy of the research please go to www.thepurposepulse.com
Written in collaboration with Root Cause and the BRC.
Daniela Flores MPRCA is the Chairman and Co-Founder of Purpose Union, and Co-Chair of the PRCA’s Purpose Group