The American consumer has changed. Due to the COVID-19 pandemic, there has been a significant shift in priorities prompted by a convergence of the health, economic and political and social crises that have taken the country and the world into unchartered territory.
The pandemic has put the country on hold for months, slowed the economy and, at the same time, cast a spotlight on socio-economic issues.
For example, sustainability has progressively risen on the agenda, as people have become even more connected with their environments while sheltering at home as consumers reconsider and extend the concept of wellness.
At the same time, social and racial inequality has gotten heightened national attention due to unforeseen events that spurred massive protests and civil unrest.
This socio-political climate has forced companies within housewares and beyond to answer an immediate call by consumers, Millennials and GenZers, to reset social responsibility standards that address social injustice, inclusion and safety. Consumers are pressuring brands to share their core values and their Corporate Social Responsibility (CSR) practices, and are holding them accountable.
“Transparency was a pre-existing trend and has certainly been highlighted by the pandemic,” said Marsha Everton, principal of the market research firm TheAIMSGroup. “We are home more often now and the visibility has been heightened. It just really matters now, even just someone saying I made a mistake and this is what we are going to do to fix it.”
So why all the focus on the younger generational cohorts during this time of social and political awareness? The two cohorts have and are about to come into their purchasing prime. They have a great influence on their older counterparts, including Baby Boomers, and according to industry observers, it is tantamount that retailers and vendors pay close attention to Millennial and GenZ consumer behavior as it evolves.
Retailers and vendors have observed how the path to purchase changes across generations. With Millennials and GenZers, a majority want to make sure that, when they purchase a product, it comes from a brand/company that is addressing key social issues.
In fact, recent research suggests that Millennials and GenZers are more inclined to make transactional decisions based on a brand’s corporate social responsibility policies than are other consumers, with those that are most vocal apt to do so most often.
As retailers ramp up visibility of their CSR practices to better connect with consumers, many housewares vendors are making similar efforts, as they report being approached by consumers and in some cases retailers about social issues.
“There is definitely a consumer driven demand on CSR practices. This runs through a great many aspects of how companies do business,” said Rob Kay, CEO, Lifetime Brands.
While it may not be the case with every consumer, he said being open and transparent with CSR practices does help build connections between consumers and brands.
Another housewares vendor noted that retailers are requesting information about its CSR practices, especially about sustainability, diversity in the work environment and an overall explanation of the company’s vision.
“We are rightly getting more and more requests to confirm our suitability to supply retailers, who in turn have set their own CSR standards,” said Nick Cornwell, managing director, Black + Blum, a manufacturer of hydration and food storage. “Interestingly, as a new retail channel is emerging all over the world that puts ecological and sustainability concerns at the center of their offer, we are getting challenged more and more as retail buyers ensure that our merchandise is fit to put in their assortments.”
Everton noted that price is still the key factor when it comes to consumers making final purchasing decisions, even with younger consumers.
“The most important factor is price, followed by convenience and quality,” she said. “This is especially true for Millennials who are generally financially conservative and very price conscious, especially as they become parents with the added expense of raising children.”
However, increasingly, consumers are thinking about social factors when weighing purchase decisions, and, bound by the pandemic, they can’t help but consider health, sustainability and other issues with social implications often under an extended definition of wellness.
Overall, said Everton, it is important for brands to keep in mind that transparency is a two-way form of communication and not one sided.
“What ‘showing up’ also means is to actively be listening to your customers in the marketplace, take action and tell them what you’ve done,” she said.
Vendors warn, however, action must be grounded in authenticity so it doesn’t look like a brand is simply jumping on the bandwagon because they observe what others are doing.
“We have learned that real transparency is important— for example, it is no use claiming to be 100% environmentally correct, as most of us are not,” said Cornwell. “Being open and honest about the realities of the situation is what people want to hear. From a product design perspective, for example, any business that does not take heed of this is going to suffer if they do not deliver what the consumer is demanding.”
For more of the Generational Marketing Report, see the September 14, 2020, issue of HOMEWORLD BUSINESS®.