Thought Leadership / BY Cara Rodgers
September 23, 2022
The consumer buying process looks wildly different than it did even two years ago thanks to an influx of social, political, and cultural changes. Today, many people are navigating unparalleled levels of fear, uncertainty, and doubt. All of these factors have caused people to pause, reflect on what is really important to them, and use their values to guide their behaviors, specifically when it comes to spending money. This strong consideration for values is a defining factor for the generations with growing purchase power: Millennial and Gen Z consumers. During their buying process, it is important to understand their unique generational habits, mentalities, and behaviors that shape purchase decision making, customer and brand loyalty.
A NEW AGE OF CONSCIOUS CONSUMERISM
While conscious consumerism isn’t anything new, Gen Z is driving a reinvigorated passion for it. Referred to as “the most ethical generation,” Gen Z is more socially conscious than previous generations, and they’re more likely to be involved in climate action and politics. Today 70% of Gen Z say they are involved in taking action to advance a social or political cause. (Edelman 2022 Trust Barometer).
While each generation has grown enthusiastic about certain causes as they mature, from a very young age, Gen Z in particular has grown passionate about issues like social justice and climate change. (CSM Wire). As their spending power and market control continue to grow, they are applying strong social and ethical standards to their shopping habits, all the while, influencing older generations to follow suit. For example:
- Gen Z impacts older generations’ mentalities and behaviors surrounding what they buy (58%), how they support causes (52%), work culture (53%), and financial behavior (52%). (2022 Edelman Trust Barometer)
- “Just two years ago, only 58% of consumers across all generations were willing to spend more for sustainable options. Today, nearly 90% of Gen X consumers said that they would be willing to spend an extra 10% or more for sustainable products, compared to just over 34% two years ago.” (Forbes, Report By First Insight at the Baker Retailing Center at the Wharton School of the University of Pennsylvania)
- “Some 86% of consumers recently surveyed said a company’s credentials regarding climate change, DEI, and ethical business practices were a key factor in their purchase decisions. For Gen Z these credentials are even more important.” (Forbes).
Brand loyalty is more closely tied to values than ever before. While factors like cost and convenience are still important, we are seeing shoppers evolve from being a conscious consumers to being a belief-led buyers, meaning they take extra consideration to look at a company’s mission, aligned causes, internal culture, and operations to make sure a brands behaviors align with their personal values.
“Shoppers who choose brands based on how well they align with their values – now make up the largest segment of global consumers at 44%, according to the IBM/NRF study, outpacing those who say value (37%), brand name (15%) or product functionality (4%) influence their decisions.” (US Chamber)
More than 8 in 10 young Gen Z consumers report that they “buy on beliefs” and see spending dollars as a means to influence positive change in society and the world around them. Furthermore, a striking 90 percent of Gen Z consumers expect brands to be involved in causes that improve the world (Edelman 2022 Trust Barometer Report and The Power of Gen Z: Trust & The Future Consumer Report). This follows the general trending sentiment around social responsibility, in which the majority of consumers (83%) believe organizations should only earn a profit if they also deliver a positive impact on society (Deloitte), and (72%) believe organizations should be positive contributors to society. (Sprout social)
Principle, not product, has become the strongest driver for brand loyalty and customer loyalty. Consumers have become fiercely loyal to their own values, so much so that “even with their favorite consumer goods products, a majority of shoppers will not compromise on principles. If there’s a value mismatch, 39% of shoppers said they’d permanently boycott their favorite brand, and 24% would break ties at least temporarily.” (Google). If there is alignment, customers fast track to strong brand loyalty. For example 57% of customers will increase their spending with a brand they “feel connected to” and 76% will buy from them over a competitor. (Sprout Social).
HOW BRANDS CAN ATTRACT THE ‘STAND FOR MORE’ GENERATION
To attract today’s millennial and Gen Z consumers during their buying process, organizations must stand for more than just profit. As customers are more open to sharing and embodying their beliefs, they expect the same from brands. It’s not enough for a brand to say they have a value — they need to live it out in order for Gen Z consumers and millennials to trust them. Belief-led buyers need belief-led organizations: companies that have a distinct point of view at their core and everything they do serves that conviction that ultimately helps them change the world for the better. The problem is that too often brands look outward to align themselves with trendy causes. While they may be able to ride the coattails of causes for a moment, today’s sophisticated consumers expose and reject brands that only pay lip service to their beliefs.
- “85% of Gen Z respondents say that trusting a brand is critical or important in purchase decisions.” The Power of Gen Z: Trust & The Future Consumer Report
- “60% of Gen Z report that a good reputation may get me to try a product; but unless I come to trust the company behind the product, I will soon stop buying it.” The Power of Gen Z: Trust & The Future Consumer Report
“If your values and ethics exist to purely align with theirs, then your business might be missing the whole point of having ethics and values.” – Nabila Salem, President at Revolent
When brands build themselves on surface-level values, they flip-flop. Meanwhile, belief-led organizations embody their convictions in every action and behavior at every level of an organization, so there is never a discrepancy between belief and behavior. Belief-led organizations are fearless enough to stick to convictions—no matter the consequences—which inspires customer loyalty as well as positive change.
About the author
Before BLVR, Cara honed her craft at the VCU Brandcenter, earning a master’s in business, concentrating in brand strategy. She furthered her career working at Carvana, OBERLAND, and Havas. Along the way, she developed a range of experiences in launching, growing, and guiding brands. Passionate about travel, languages, and culture, Cara puts inclusivity, authenticity, and adventure at the core of everything she does.