Today’s switched-on consumer not only buys what brands do, but they also buy why they do it. KPMG Nunwood has described this trend as ‘the integrity economy’. For consumers that care about where they spend their money, a brand’s integrity is a vital decision factor.
KPMG identifies this high level of interest in brand integrity as a symptom of a global dearth of trust. The 2017 Edelman Trust Barometer survey found a shocking and unprecedented global decline in trust. CEO credibility fell 12 points and is now at an all-time low and trust in business dropped in many countries.
Trust has declined worldwide and interest in brand integrity has correspondingly risen in most markets. Local country research by KPMG in Australia reveals that brand integrity is particularly important to the Australian consumer. It’s vital in China, where societal trust is generally extremely low. There’s really no world market where it’s not an increasingly important factor in how you do business.
Consumers aged under 40 are the ones most likely to pay attention to brand values. In fact, there’s some evidence that they’re willing to pay more for brands that align with their values. Brands that don’t stand for something are increasingly looking outdated. There’s a danger that consumers will switch attention to brands that better align themselves with consumer values.
Unilever has identified that sustainability is a major concern for many consumers across its portfolio of brands. The transnational corporation notes that it’s the sustainable brands in its portfolio that are growing the fastest.
Like many companies, Unilever has identified that the consumer it wants to engage with – young, wealthy and influential – care about these issues. The integrity economy is really the economy of the future because it reflects the expectations of younger consumers.
Consumers are generally more demanding of brands than in the past. They assess brands across a wider number of touchpoints than ever before, including apps, websites, social media, the in-store experience and their advertising presence.
Business is under increased scrutiny because consumers can and do discuss them online and social media can draw attention to issues as never before. Consumers increasingly expect brands to have morals and operate ethically across all their areas of activity.
Some brands take integrity a step further. Only a few decades ago it would have been inconceivable for a sportswear brand to take a political stand as controversial as Nike’s decision to associate with Colin Kaepernick. This example of corporate social activism is a highly calculated, but still extremely risky, move. It’s a marketing approach that can backfire if it’s seen as insincere.
For brands including Nike and Fenty Beauty, taking a stance over issues that touch on racial politics have been an effective way to align with neglected minority audiences.
By offering a wide and inclusive portrait of beauty, Fenty Beauty has managed to engage with non-white audiences in ways more established brands can barely dream of. But audiences are very good at identifying insincere efforts. Companies that claim to support Pride often experience a backlash from audiences that don’t feel they are supported year-round.
It’s worthwhile noting that brand integrity has become more important to consumers just as consumers become less brand loyal. Customers are fickle.
It’s all about trust
The so-called integrity economy is really an exercise in trust-building between brands and audiences. By its very nature, it has to be an exchange of values. That’s why slapping a rainbow version of your brand logo onto your marketing collaterals once a year simply won’t cut it.
To truly live your values, you have to enter into an active dialogue with your audience that understands what they’re concerned about. Audiences increasingly want to be not merely passive consumers but active participants in shaping products and experiences.
Understanding this has transformed the way Puma approaches marketing. Like Nike, Puma is embracing controversy and is joining in with activism.
It’s an approach that’s led to new kinds of partnerships between Puma and the celebrities it works with. The brand is increasingly collaborating with activists, or celebs active for aligned causes, rather than stars with no particular agenda.
If your brand is looking at these examples with trepidation, don’t panic. Not all brands need to take these bold steps towards decisive moral leadership.
But all brands do need to show transparency. Even if your brand isn’t championing a controversial opinion, it still needs to be accountable and to listen to its audience. Brands can’t just get away with selling products any longer.
Consumers are very effective at assessing brands based on the total sum of their words and actions. Increased consumer power means organisations can no longer hide shady practices in any area of their operations. As KPMG Nunwood’s report into the new integrity economy states “There is no hiding place on the internet”.