I used to reference Edelman and it’s Trust Barometer research while in charge of the Global Trends research project at IMD Business School. About two weeks ago it came out with its third goodpurpose® study. After surveying over 8,000 adults across 16 countries, it concluded that “purpose remains a deeply held belief around the globe that is driving consumer behavior and preference.” I am a huge fan of such research projects because they reinforce my hopes and dreams of a near-future where virtue is valued by consumers, but I have slowly learned to take them with a certain skepticism.
The introduction has all the links, so you can find more details by clicking away. But here are some highlights from the press release:
When quality and price of a product are deemed equal, social purpose has consistently been the leading purchase trigger for global consumers since 2008, muscling design and innovation and brand loyalty aside. Over those years, the relevance of Purpose as a purchase factor has risen 26% globally. Growth has been even more prominent over the last 18 months in markets such as Japan (+100%), China (+79%), Netherlands (+43%), India (+43%), and Germany (+36%).
Nearly half (47%) of consumers have bought a brand at least monthly that supports a cause, representing a 47% increase from 2010. Over the years, consumers have taken increased action on behalf of brands with Purpose:
- 39% increase in “would recommend” cause-related brands
- 34% increase in “would promote” cause-related brands
- 9% increase in “would switch” brands if a similar brand supported a good cause
Consumers within Rapid Growth Economies (RGEs) — the new Purpose “Bull” Markets — such as China, Brazil, India, UAE, Indonesia, and Malaysia, unlike the U.S. and Western Europe, are fast-tracking Purpose-driven involvement and support for Purpose-infused brands. Markets such as Brazil (+10 points) and China (+5 points) have seen significant increases since 2010 in the amount of people supporting a good cause.
Reference: 2012 Edelman goodpurpose® Study
This is indeed fantastic news. The research should teach CEOs, marketing and sales teams that there are growing global and local trends in virtue. Not only are cause-related brands, goods and services being “recommended” and “promoted”, it is making a direct difference on what “consumers have bought” and their willingness to “switch brands”. The latter being something that has lagged behind for a while. Intriguingly, the study suggests a growing case for the purpose niche in emerging markets. Traditionally, developing countries stress concerns about the availability of funds and a low purchasing capacity. Instead, Edelman indicates it is booming.
As I said in the introduction, this news always excites me but I am also becoming increasingly skeptical. Not to the point where I disbelieve the research, but I am careful to acknowledge limitations in the study and to appreciate the bigger picture.
What I did not find on the website was the research design, which I assume was to protect confidentiality and intellectual property. But the problem with this is that one cannot analyse their process for bias or error. The biggest concern for studies on consumers paying for corporate social responsibility (CSR) is measurement validity error: that the study does not adequately measure what it purports to measure. How so? There is a well established divergence between what people say, and how people act. Garcia and Poole (2008) found that consumers tend to overstate their actions when purchasing ethically. It has also been found that research participants tend to bias their responses to what is deemed socially desirable or acceptable. Consumer research on ethical purchases need to carefully consider how to resolve this potential bias, it can have a dramatic effect on the research results: Vogel’s “The Market for Virtue” referenced a 2004 European study which found that 75% of consumers said they would modify a purchasing decision based on purpose but only 3% actually did.
A second issue to observe is the “disclaimer” at the very beginning of the blockquote, which carefully declares “when quality and price of a product are deemed equal.” The first issue with this is that it is a poor reflection of reality. Any organic or free-trade equivalent of a grocery product is more expensive. Green energy and cleaner cars come with a price premium. Until there is a functioning price on pollution that is accepted by consumers, rather than being subsidised down again by governments, purpose and non-purpose products will simply not be comparable on price. The second issue is availability, a factor which seems to be unfortunately omitted from this research. If the research assumed that an ethical equivalent is as available as its more common counterpart, then this is another inaccurate representation of reality. I currently reside in Romania, and the organic section of our supermarket is the same size as the eggs section. Worse, it is combined with exotic groceries like sushi nori and korma curry sauce. I have experienced these problems in almost every supermarket I enter. If the research intended to ignore availability as a criteria of purchase, then it is creating a bias by excluding certain consumers who are not able to travel to buy ethical. This means people like the elderly and disabled, those in rural or isolated areas, and those who are not prepared to travel to another country to source purpose products (that’s me!). Retailers have a major role to play here in stocking the purpose equivalent on their shelves.
I think the most critical point though is an obvious one, if it really were a big deal then all companies would be doing it. Brands compete for market share to be the best. If it were a true source of advantage, then all brands would be fighting to show they were the most responsible, generous and ecological. Society is far from that point currently, but there are indications that it is heading there. In 2011, BusinessGreen reported figures from the UK government showing that green goods and services were growing in the face of the economic crisis. In 2008 and 2009, my Global Trends research included statistics about organic food in the United States doing the same. These sales figures are the most telling about cause brands and ethical consumerism.
The Edelman research is significant, because it reinforces and reminds CEOs and corporations of the importance of purpose and virtue. It would be better if the research was focused on the purchasing actions, and that it considered availability, but at the end of the day it is OK. It keeps the CSR engine running and growing. It stimulates a self-fulfilling prophecy. Eventually, sales figures will describe what consumer researchers had been proclaiming and they will be hailed as legends. The sooner the better.