The latest CommBank Consumer Insights Report revealed that 53 per cent of Australian consumers are willing to pay more to buy from purpose-led businesses.
The report highlighted that almost one in five shoppers are willing to pay more than 10 per cent extra for goods and services sold by a business with a strong purpose, even if value for money is the primary driver of shopping behaviour for the majority of consumers at 41 per cent. Younger generations are seen as leading the way in supporting purpose-led businesses, with 71 per cent among Generation Z.
Consumers also tend to actively seek purpose-led businesses (35 per cent) and are also more likely to regularly shop at (35 per cent) or invest in them (31 per cent).
The report noted that the pandemic has been a primary driver for more than a third of consumers in making their choices about where they shop and what they buy. The value of purpose is highest for food and beverage services, recreational goods and personal care services and products.
Consumers also expect that a brand’s social purpose will extend beyond competitive price and quality by having an active role in society and taking meaningful action on social issues that matter to them.
Commonwealth Bank’s executive manager, consumer and diversified industries Jerry Macey, said: “The report findings show the powerful influence of purpose and how it can increase a consumers’ loyalty, advocacy and spending. The pandemic has accelerated a shift in Australian consumer habits and we have seen how shoppers are looking for their own values to be reflected back in the brands and businesses they support. Despite this trend emerging from the pandemic, the focus on instilling a social purpose will likely continue for the long term. Consumers have made it clear they are looking for an authentic, all-encompassing approach that is embraced throughout the organisation. ”
Macey added: “Purpose is important, but it needs to be authentic in order to add value. Today’s consumers are very well informed and can quickly determine whether a brand is genuine about the causes they support. Their connections with brands are often personal, and so they are likely to feel personally let down if brands fail them with inauthentic, short term campaigns.”
Now in its second year, the CommBank Consumer Insights Report has been offering analysis and insights into the Australian consumer. This year’s report examined the shift in attitude in how consumers view social purpose in businesses and how it impacts their shopping habits.
This story originally appeared in our sister publication, Inside Small Business.
