Today’s switched-on consumer not only buys what brands make, but also why. KPMG Nunwood has dubbed this trend the ‘integrity economy.’ For consumers who care about where they spend their money, a brand’s integrity can be a vital decision factor.
KPMG identifies this high level of interest in brand integrity as a symptom of a worldwide decline in trust. In fact, a 2017 Edelman Trust Barometer survey found a shocking and unprecedented implosion of consumer trust. CEO credibility has fallen 12 points and is now at an all-time low, and trust in business had dropped steadily in many countries.
While trust has declined worldwide, interest in brand integrity has risen in most markets. In KPMG’s 2018 Me, My Life, and My Wallet report, U.S. customers now weigh “a much broader range of factors covering a wide range of a brand’s conduct in the community and across stakeholder groups writ large.” In fact, 47% of U.S. consumers say they are willing to pay more to an ethical retailer that gives back to society.
Today, there’s really no world market where trust is not increasingly important in how you do business.
Consumers under 40 are most likely to pay attention to brand values. In fact, there’s some evidence that this segment is willing to pay more for brands that align with their values. Brands that don’t stand for something look increasingly outdated. There’s an ever-present danger that buyers will switch 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–cares deeply about these issues. The integrity economy is fast becoming the economy of the future because it reflects the expectations of younger consumers.
Consumers are generally more demanding of brands now than in the past. They assess brands across a wider number of touchpoints than ever before, including apps, websites, social media, in store, and advertising.
Business is under increased scrutiny because consumers discuss brands online, and social media draws attention to issues like never before. Consumers increasingly expect brands to have a moral compass and operate ethically across all channels of activity.
Some brands take integrity a step further. Just a few decades ago, it would have been inconceivable for a sportswear brand to take a political stand, like Nike’s controversial decision to associate themselves 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 consumers catch even a whiff of insincerity.
For brands like Nike and Fenty Beauty, taking a stance over issues that touch on racial politics has been an effective way to align with 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 have failed to do. Remember, however, that audiences are very good at identifying insincere efforts. Companies that claim to support Pride often experience a backlash from audiences that don’t feel supported year-round.
It’s worthwhile noting that brand integrity has become more important to consumers just as consumers are becoming less brand loyal.
It’s all about trust
The integrity economy is really an exercise in trust-building between brands and audiences. By its very nature, it must be an exchange of values. That’s why simply adding pride colours to your marketing collateral once a year is not enough.
For a brand to truly live its values, you must enter into active dialogue with an audience that understands what they’re concerned about. People no longer want to be passive consumers but rather active participants in shaping products and experiences.
Understanding this has transformed the way Puma approaches marketing. Like Nike, Puma has been embracing controversy and joining the activism movement. This approach has led to new kinds of partnerships between Puma and the celebrities it works with. The brand is collaborating more and more with activists and celebrities who support causes, rather than spokespeople with no particular agenda.
If your brand is looking at these examples with trepidation, don’t panic. Not all brands need to take bold steps towards decisive moral leadership.
Note, however, that all brands need to show transparency. Even if your brand isn’t championing a controversial opinion, it still needs to be accountable and listen to its audience. Brands can’t get away with just selling products anymore.
Consumers are very effective at assessing brands based on the total sum of their words and actions. Increased consumer power means organizations 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.”