Ethical consumerism is not new. It’s been around for decades, since at least the 1960s. But the big difference between then and now is that it’s no longer a niche market for a small part of the population.
Now, in 2024, customers really do care about where their products come from.
Fast fashion is losing ground to sustainable clothing, mending and fixing, rather than just buying new. Fair-trade and cruelty-free, not exploitative practices at rock bottom prices. And it’s not only about the ethics of the product itself, but it extends to how companies deal with current social issues.
Why Companies Should Care
Producing goods and services ethically can sometimes be a tricky option for companies because it usually means it’s more expensive. With the bottom line being most important for shareholders, why should business owners care?
It Creates a Relationship
Catering to ethical consumerism creates a bond between a brand and a consumer. When a company shows it cares about how a product is produced, consumers will see people, not just a brand that only cares about the dollar value an individual represents.
Ethical consumerism emphasizes transparency, authenticity, and meaningful customer engagement. To compare it to something that goes to that base level of human relationships: thank-you cards (the traditional paper kind!). They’re personal, thoughtful, and foster bonds. They go beyond a simple transactional relationship, but an aligned vision with principles, loyalty,and trust.
Brand loyalty is extremely important these days. With competition extremely high in a digital world, where we’re constantly bombarded with ads to new companies, keeping customers is very lucrative indeed.
It’s a Growing Movement
We talked about it briefly in the introduction to this piece, but it’s super important: ethical consumerism is not just on the rise, it has well and truly arrived.
Consumers really care about where their products come from. If there’s an eco-friendly alternative, consumers will gravitate towards it. And many will even spend a significant amount of extra cash to ensure their products are guilt-free.
And this isn’t just conjecture, either. The numbers tell us that ethical consumerism affects sales in a real way; according to several studies, 27% of American consumers are willing to pay extra to ensure their products are environmentally friendly and sustainable.
In Europe, numbers are very much comparable. In Denmark, around just over a third of consumers will pay more for sustainable brands. In Finland, it’s 37% and in France, it’s 32%. In nine African countries, over a quarter of consumers have either engaged or considered consumer boycotts.
What is key, however, is that the rise of ethical consumerism is particularly strong amongst younger consumers. This suggests that in the future, the importance of how products are made and sold will only become more important.
People Buy Expensive Ethical Goods
In the wake of the fast fashion market, many companies believe that consumers will only buy ultra cheap, even if the quality is low, the sourcing of the product questionable, and the environmental effect negative.
Here’s one example that contradicts that: Patagonia. They place the environment and sustainable practices as central to company policy. Patagonia products are more popular than ever, with strong loyalty from environmentally-conscious consumers.
Negative Publicity = Lower Sales
Positive brand activism will generally lead to higher sales figures. The same is true in the opposite direction. If your company goes viral in a negative way, whether due to perceived hypocrisy or a scandal at the point of production, sales will noticeably drop.
According to a study conducted by the Judge Business School (University of Cambridge), for example, one piece of negative news can lead to a direct 0.6% drop in weekly sales.
Some brands decide to go neutral to avoid a potential fallout, but that’s not a viable approach in 2024. Consumers expect companies to take a stance, to show that they care about relevant social issues.
Just look at the BLM movement in 2020; companies that decided to stay silent took a big hit in reputation and sales. Many suffered boycotts from angry consumers, for example. For many, the effect will reverberate for years to come.
It’s Down to a Collective
To create a sustainable economy, it requires everyone to take part. Consumer demand is one part of it, of course. If consumers at large reject unsustainable products, companies will be forced to change their actions.
But government policy also needs to move towards eco-driven legislation. The European Union, for instance, has taken many steps towards a greener consumer market, but it’s just the start of a long road ahead. Thankfully, we’re heading in the right direction, but there’s a lot more left to do.
