As Gregg Wallace’s 'Recession Bites' Money Programme illustrates, the current global recession is presenting new and difficult challenges for consumers who want to shop ethically and sustainably, and the retailers who want to provide the goods that allow them to do so.
Over the last few years, consumers of all ages reported behaving more ethically, while six percent of the UK adult population (2.8 million people) are committed ethical consumers. However, this growth in ethical consumerism has taken place over a period of low unemployment, low interest rates, soaring house prices and healthy retail conditions. The increased cost of living, tighter lending standards, growing unemployment and global recession has changed the economic landscape, and now that consumer spending is under pressure, there are concerns that the growth in the sustainable consumer goods market will slow.
six percent of the UK adult population are committed ethical consumers
Others argue that this is too simplistic, and that while price and value for money have become more pressing issues for consumers, those who are genuinely committed to ethical consumption will not discard their ethical credentials. This is a dilemma for marketers: can they afford to pursue a sustainable agenda when it appears that the market for their products and services may be shrinking? Can they afford not to pursue that agenda, given the risks to their reputation and revenue if they turn their back on the ethical market?
Fast food: Burger.
[Image © copyright Photos,com]
As the corporate greed of many business executives and public figures continues to be exposed, many have criticised marketers for being complicit through their encouragement of unsustainable patterns of consumption with messages of rampant consumerism, endless credit and disposable culture. In particular encouraging even greater consumption of alcohol, fossil fuels, fast food and cigarettes, as well as over-packaging products, and building in unnecessary product obsolescence have done little to position marketing as the planet’s saviour.
However as our research and teaching at the Open University Business School highlights, when harnessed responsibly, marketing encourages us to recycle, reuse, buy fairtrade, eat healthily, drink sensibly, save energy and support good causes. The potential for marketers in this current economic crisis to promote sustainability and provide ethical products and services remains considerable.
Marketing is at the heart of the sustainability debate because of its interface between the forces of production and consumption. Brands built upon value, authenticity and integrity hold even more currency now that many companies have betrayed customer confidence. Consumers have always sought brands which they can trust, but increased cynicism will mean even closer scrutiny of what those brands are built upon. If marketers don’t deliver on value and values, in today’s climate, many consumers will shop elsewhere.
Winners and losers
Recent figures from the UK show that some ethical sectors, such as organic food are showing signs of suffering. Mintel have reported that 48 percent of all organic shoppers will cut back or even stop buying organic food in the next year. However, other ethical choices, such as local produce, fairtrade and animal welfare are gaining ground. 42 percent of UK adults would like more retailers and manufacturers to source from local producers, and 28 percent are willing to pay more for food if it meant supporting local farmers.
This reflects other recent studies that found not only are consumers willing to pay more for locally produced and UK-grown food, but in some cases, perceive produce sold at farmers’ markets to be cheaper than supermarkets. Although local production is not about to replace international sourcing within the food market, the desire to support local farmers and brands in times of recession is one that connects to consumers’ ethical intentions. Retailers who promote the welfare of local suppliers and stock their produce are likely to find favour with the socially conscious consumer.
Moral values are socially and culturally constructed, and culture filters our perceptions of what is ethical or unethical consumption. For example, many consumers focus upon very local causes, and as the recession deepens and local firms struggle to survive, we might expect to see a deepening commitment by consumers to buy local rather than imports as a socially conscious activity that lends support to local business, but also one that potentially reduces air miles and environmental impact, and helps sustain local communities.
Trading down?
Few could have predicted the consumer trade down across Europe and the United States, where discount supermarkets such as Lidl and Aldi have become favorites of middle class shoppers. Fears have been expressed that this may signal that the credit squeeze and pressures of daily life are overriding the affluent consumer’s ethical conscience.
Reported signs of business growth include in the UK, Domino’s pizza chain reporting a 9 percent increase in sales. As people seek to balance shrinking incomes and family demands, the fast food business is responding swiftly to address those consumer concerns. Even as healthy eating campaigners and policy makers take a collective sharp intake of breath, it is important to reflect that the fast food retailers are also, slowly but surely, embracing the ethical trend and have a chance to repair their unhealthy image as concerned shoppers move downmarket.
McDonalds, a long time target of environmental and anti-globalisation campaigners now boasts fair trade coffee, free range eggs, organic milk and locally sourced beef in its restaurants. As many consumers are forced to change where they eat out, there is an opportunity for fast food chains to demonstrate their ethical credentials. While question marks still exist in conscious consumer minds about employee conditions, wages, suppliers and animal welfare, if fast food restaurants can make consumers feel better about eating there when they are forced to, they may continue to visit when they are not.
Recognising that downturns change consumer behaviour, marketers need to formulate a recession strategy to understand how those changes are going to impact upon their business. Will consumers continue to make these choices when the upturn eventually comes, or return to their previous patterns of behaviour? Embracing branded labels when they have been purchasing generic, buying bottled not tap water, ordering Starbucks rather than McDonalds lattes will, to some extent, depend upon their satisfaction with these new consumption experiences and the authenticity of the value and ethics they find within them. If marketers can deliver on price and ethics now, then customer retention post-recession is more likely.
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About the author
Dr Marylyn Carrigan is a Senior Lecturer in marketing at the OU Business School. Her research interests focus upon ethical consumption, social marketing, and marketing ethics, with a particular interest in the consumption behaviour of families.
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