Conscious Customers – A market segment brands cannot afford to ignore anymore

In today’s digital world, customer loyalty is ephemeral.

A McKinsey study on the purchase behavior of 125,000 consumers across 30 categories found that only 13 percent of consumers were loyalists, 29 percent shopped around but didn’t switch brands, and 58 percent consumers switched brands ⁽¹⁾. Convenient, simple and intuitive customer decision journeys, influenced by social media are changing the paradigms on which brands relied for years to retain consumers, in this highly commoditized, competitive landscape.

Traditional brands have underplayed “conscious consumerism” in inspiring pervasive customer loyalty. Consumers with a conscious mindset ask for transparency and fairness throughout the value chain and use their purchasing power to bring about a social, health-related or an environmental change. Shoppers today—especially millennials—seek value-driven brands, which have strong social and environmental messaging. To put things in perspective: 60% of Americans stress the importance of buying from responsible brands ⁽²⁾.

Brands need to value this ‘conscious consumer’ segment, that is asking for more and more details starting right from ethical sourcing and responsible farming practices, environmentally conscious manufacturing processes, nondiscriminatory distribution of funds, green transportation and non-overproduction of goods. Economist reports that Everlane, a retail startup, signed up 350,000 members within a year⁽³⁾. Everlane follows a radical transparency strategy by revealing to shoppers all production costs and, at times, even comparing with traditional leaders. One Cashmere Pullover, for instance, is $100 at Everlane with 138% markup, and Everlane claims traditional retailers would sell a comparable for $210. In addition, Everlane details how it chooses responsible manufactures with fair wages, reasonable work hours, and performs environmental sustainability audits.

New age shoppers are embracing brands that evangelize social-values, emphasized by the rise of socially conscious brands such as Warby Parker, TOMS, and PATOS. PATOS’ social mission involves empowering Latin American artisans in poor communities by providing them with sustainable jobs. PATOS places inside each box a picture of the artisan who made the pair of shoes, reminding customers of the impact they had post-purchase. PATOS’ findings from emailing customers show that first-time shoppers perceive PATOS sneakers as comfortable and with disruptive style. But it is the social mission that helps PATOS make repeat sales in a highly commoditized and competitive market.

Traditional brands, retailers, and longstanding industries need to see conscious customers as brand evangelists, who micro-influence and help create a loyal community. A great emotional bond and a social mission at the core of one’s Business Model can help capitalize on the upmarket street-cred that comes with a no-logo attitude.

References

^[1] https://www.mckinsey.com/business-functions/marketing-and-sales/our-insights/the-new-battleground-for-marketing-led-growth

^[2] http://www.goodmustgrow.com/ccsindex

^[3]https://www.economist.com/news/business/21565256-new-breed-offers-luxury-cheap-rise-no-name-designers

About the Author

Rohit Goel specializes in retail, consumer and travel domains. He is an MBA from HEC-Paris, and has 12 years of diverse experience assisting clients break-through organizational inertia, envision digital transformation and adapt to new digital mediums to trigger step change improvements in revenue, customer experiences and cost optimizations.

Service Offerings

Service Offerings

Client Themes

Client Themes

Conscious Customers – A market

segment brands cannot afford to

ignore anymore

About the Author

Service Offerings

Industries

Cloud

Cybersecurity

Digital

EngineeringNXT

Holmes

Contact Us

About Wipro

Careers

Location

Leadership

Investors

Innovation

News and Events

Insights

Analyst Speak

Products & Platforms

Partner Ecosystem

Sustainability

Contact Wipro