The past two years have been a complete roller coaster. No one has been spared from the global health crisis of which we seem to finally be slowly coming out.
While there have been recent reports showing that some CEOs have been able to generate significant profit during the darkest months of the pandemic, most brands have recorded losses. They have had to face unprecedented challenges, exposing their vulnerabilities and inequities in almost every single industry.
So what’s next?
A new landscape in sight
As Covid hit in 2020 and sent most people home for the ‘foreseeable future´, e-commerce sites faced a unique opportunity. With little to do but digital browsing, many turned to online shopping for some sense of short-lived satisfaction, often cut short by the less than desired quality of the product delivered to their doorsteps. In the first year of the pandemic, e-commerce grew 45%, with online groceries being one of the main new trends in purchasing habits driving this expansion. Similarly, the FMCG sector grew by 10% YoY in 2020, four times the forecasted rate. It is now evident for everyone across many generations that shopping is no longer an out-of-home experience, but something that can be done from your couch, while catching up on your favourite show.
People shopped differently too during this period. Although some sectors such as health and beauty products stagnated, gym equipment saw a tremendous increase, driving recreational goods spending by 18%, while the furnishing and household equipment sector grew by 5.7%. This has also been a unique opportunity for social media shopping as people had more time than ever to scroll what seemed to be an infinite stream of new content. With new features and the democratisation of influencer marketing, social media accounted for 3.4% of e-commerce sales in 2020 and is expected to continue rising.
Yet this never-ending virtual shopping trip also left consumers wondering about the impact their couch to basket checkout may have on the bigger picture.
The rise of the conscious consumer
In August 2021, the IPCC published a report that made headlines across the globe. The message was clear, both the private and public sectors need to come together to take action to have a chance at mitigating the impacts of climate change. In the report, the IPCC raised concerns that governments are now close to failing the Paris Agreement which aim to limit average global temperature rise to 1.5C.
The consequences highlighted in the report make a compelling case for everyone to take part in the fight against climate change. And this urgency in acting against climate change has been reflected in consumers’ everyday choices. More and more people will look at brands’ sustainability claims before they decide whether or not to purchase from them. In a recent report by Dentsu and Microsoft Advertising, consumers appear to be more aware than ever that their choices will matter; 87% of the 24 000 respondents stated that they wanted to do more to tackle climate change and would be willing to change the products and services they buy to do so.
In reality, fewer consumers walk the walk, as 64% of people interviewed in Havas’ yearly brand report confirm they prefer to opt for purpose-driven companies, and 53% are willing to pay more to support a brand that is actively taking a stand.
Post-pandemic consumers are emerging with new demands, with nearly three-quarters of them expecting brands to act immediately to not only protect the planet, but also society, from such worldwide crises. However, Havas’ report highlights it is with very little faith that 71% of end-users believe companies will follow through on their claims. The general cynicism towards brands shows their growing fracture from their target audience, who feels let down by the companies from which they purchase and discouraged by the overall lack of authenticity.
The rules have now changed. Consumers are increasingly looking for purpose in their purchases but have also become aware of the green washing approach some organisations have taken. The latter will not only merely satisfy end-users new requirements, but it can also severely damage a brand image for good. Marketers need to go beyond their focus on products and lift the curtain on their company’s operations, to build trust with their audience and thereby maintain their market share.
The marketing approach is shifting
No more green lies
Increased access to information means that a product’s full life cycle can be verified by consumers. If proven to be false, or not thoroughly presented, existing social and environmental credentials can be irreversibly (and probably deservedly) damaged when it comes to consumer loyalty. Modern marketing best practice requires that companies make information supporting claims easily accessible and evidence-based. Marketing and sustainability teams are now co-dependent to keep those green affirmations up-to-date, accurate and relevant.
The open-door policy
While companies’ marketing practices have come under scrutiny for their environmental commitment, their everyday practice has also not escaped consumers' attention. Companies have a role to play in climate change and not just via the products and services they sell. Their operations have an impact on the environment, which is in their power to limit.
Dentsu has decided to show the path to its clients with a net-zero strategy that involves reducing its operational greenhouse gas emissions by 46% by 2030. Concrete operational changes such as addressing material emissions sources across buildings, technology usage and travel has enabled the advertising giant to reduce its internal SBT emissions by 36%.
The ESG commitment made by Denstu brings a new approach, based on their own actions, which ultimately gives credibility to their wider green ambitions, such as offering media plans on digital platforms powered by renewable energy sources.
Marketing as we know it has changed forever. After two years of increased screen time, consumers are expecting that companies do more than simply claim they will donate part of their profit to cherry-picked charities. If sustainability is a selling point, transparency and traceability are now at the heart of consumers’ expectations, putting further pressure on the private sector to address its contribution to climate change.
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