In conjunction with the National Retail Federation’s Big Show, IBM released a study on global consumer trends demonstrating the importance of brand purpose and suggesting that purpose surpasses cost and convenience for today’s shoppers.
IBM announced that the research, developed with NRF and including 19,000 consumers from 28 countries, indicated that consumers today will stop buying their preferred products if they lose trust in them and that an equal proportion stopped purchasing favorite brands in 2019. Consumers are prioritizing brands that address concerns about sustainability, transparency and core values when making such decisions. Respondents to the study said they are willing to pay more and even change their buying habits for brands that get it right.
Consumer purchasing behaviors are changing drastically. For one thing, they shop whenever and wherever the mood strikes them. According to IBM, seven in 10 consumers now shop in “micro-moments,” often when they are conducting daily tasks.
Although behavior may vary with degree of commitment weighing against the price factor, survey respondents across age and income designations said they would pay higher premiums for products aligned with their personal beliefs. On average, 70% of purpose-driven shoppers said they would pay an added premium of 35% for sustainable purchases, such as recycled or eco-friendly goods, while 57% said they would change their purchasing habits to help reduce negative environmental impact. In addition, 79% of consumers maintain that it is important for brands to provide authenticity guarantees, such as certifications, when they’re purchasing goods. Within this group, 71% are willing to pay an added premium of 37% to companies offering full transparency and traceability.
“Transparency constitutes proof that an organization and its offerings are what the company claims to be, a way to earn consumers’ trust. Brands can leverage data and integrate blockchain technologies as brand differentiators that effectively provide transparency and traceability, which will also boost profits as the study shows that shoppers willingly pay more if a retailer can demonstrate provenance,” said Luq Niazi, global managing director, IBM Consumer Industries.