Study: Consumers pay more for brands in sync with their beliefs
Providing a brand purpose takes effort, but pays dividends.
According to a new study of 19,000 consumers age 18-73 in 28 countries from IBM and the National Retail Federation (NRF), one-third of all respondents will stop buying their preferred products if they lose trust in the brand. One-third of consumers have already stopped purchasing their longtime, favorite brands in 2019.
However, respondents of all ages and incomes pay much higher premiums for products aligned with their personal beliefs. On average, 70% of purpose-driven shoppers pay an added premium of 35% more per upfront cost for sustainable purchases, such as recycled or eco-friendly goods. Almost six in 10 (57%) are even willing to change their purchasing habits to help reduce negative environmental impact.
Furthermore, 79% of all respondents said it is important for brands to provide guaranteed authenticity, like certifications, when they're purchasing goods. Within this group, 71% are willing to pay an added average premium of 37% for companies offering full transparency and traceability.
At the same time, seven in 10 consumers now shop in "micro-moments,” meaning they shop simultaneously while conducting their daily tasks.
"Shoppers today show an increased willingness to pay premiums for products that align with their values,” said Mark Mathews, VP, research development & industry analysis, NRF. “The study's findings show that today's retailers need to be proactive in evaluating and understanding what drives current and future core buyers while still boosting margins for their business."