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Below is a summary of key findings on consumer values, how they are shifted as a result of the pandemic, and why brands show pay attention to these values to be successful. Overall, the younger generations tend to place more emphasis on values; however, over time older generations too are becoming more values-driven. The outbreak of COVID-19 has also played a role in shifting consumer values with more Americans are placing more value on family, friends and communities than their personal aspiration. As a result, studies have found that Americans are expecting corporations to do the same and evidently viewing those at the forefront of the pandemic response more favorably.

Key Statistics on Consumer Values

GENERATIONAL TRENDS IN CONUMER VALUES

As suggested in the initial research there is a clear trend that younger generations place more emphasis on values than their older counterparts when it comes to making purchasing decisions. This has been the case long before the outbreak of COVID-19. However, older generations too are becoming more values-driven. Below is a closer look at this generational trend.

  • According to data from 2017, nearly 7 in 10 American millennials “actively consider company values when making a purchase–compared with 52% of all US online adults.” However, Forbes reports that older generations are increasingly sensitive to company values–and growing quickly so–with 2017 being a tipping point for Gen X consumers, a majority of whom “explicitly evaluated company values during a purchase.” A similar trend is also seen among baby boomers (see Figure 1 for changes from 2015 to 2017).

Changes from 2015 to 2017

  • According to “Consumer Insight Report: Millennials in a Changed World,” millennials are more concerned about climate change, which has led to “their interest in sustainable products and brands, including plant-based foods and beverages and items that labeled as organic, natural or fair trade.” As a result, about 75% of millennials report changing their buying habits with sustainability and the environment in mind, compared to 34% of baby boomers.
  • A survey of 1000 U.S. consumers age 18-34 finds that “71% of Gen Z believe that brands and corporations should help them achieve their personal goals and aspirations.”
  • Across all generations, 72% of U.S. consumers believe it is “more important than ever” to buy from companies that reflect their values.
  • According market research company Forrester, 68% of U.S. consumers say a company’s social responsibility reputation has at least some influence on their purchasing decision. For those ages 34 and under, 60% say that it is important that companies operate on a socially responsible level, compared with 52% of those ages 60 and older.
  • Additionally, 87% of consumers would switch from one brand to another if the other brand is associated with a cause that resonated with them.
  • The 2020 Consumer Culture Report finds that not only do consumers across generations care about value alignment, they are also not shy from boycotting a brand if its stance does not align with their values, with 65% of those between 18 and 34 having boycotted a brand they previously purchased from because of its stance on an issue (see Figure 2).

Value Alignment

 As Americans become lonelier, there is a trend across all generations in shifting towards online communities. The trend, however, is more apparent among younger generations, who value online community support. Interestingly, young generations believe that brands have a power to create communities.

  • Unfortunately, Americans across generations are reportedly feeling lonelier than ever, with 43% reporting sometimes or always feeling lonely and 27% saying they “rarely or never feel as though there are people who really understand them.” And the younger they are, the lonelier they are. This report is prior to the pandemic, which has only accelerated the loneliness.
  • Unsurprisingly, a separate survey of 1000 U.S. adults finds that 76% of respondents “consider online community members their friends and 64% think online communities better understand their passions than family and real-world friends.” Following the same generational trend as above, the sentiment is more pronounced among the younger generations, with 60% of Gen Z said online community support is very important to them, compared to only 48% of all other generations. An astonishing 73% of millennials and Gen Z “trust responses from their specialized online communities more than those from people in person or on Facebook.” In addition, 60% of millennials and Gen Z feel closer to online forum communities than their Facebook friends, compared to only half of older generations.
  • The sentiment is echoed by a finding in a Spotify survey (of respondents from the United States and a number of other countries), which finds “62% of Gen Zers and millennials believe brands have the power to create communities based on shared interests and passions, and that’s what they expect from them.”
  • As expected, younger generations value technology, even on a personal level. When asked in another survey if technology helps them better understand people, 40% of American Gen Z say it helps very much, compared to only 28% of millennials. Gen Zers also appear to place the same value on online friendships as offline friendships, with 62% strongly (34%) and somewhat (28%) agree that “online friendships can be as meaningful and important online as offline friendships.”

In summary, U.S. consumers are divided by generation. Their background context influences their behaviors and ultimately their consumption (see Figure 3 for generational profiles). There is a shift across all generations towards values-based consumption, with the younger generations leading the way.
Generation Profiles

COVID-19 IMPACT ON CONSUMER VALUES

  • In a survey of 6000 U.S. consumers, 42% report feeling lonely. Among Gen Z, the figure increases to 59%. Consumers stay connected through social media (80%), phone calls (75%), as well as video calls being utilized by 41% of respondents. The pandemic has caused consumers to value technology even more.
  • Research by Resonate finds that 29% of Americans have seen their personal values significantly changed in the wake of COVID-19. Understandably, safety and security have become prominent with an increase of 30% and 28%, respectively, among U.S. adults.
  • At the same time, other values such as pleasure, humility, tolerance and independence have declined by 15.3%, 13%, 12.7% and 12.7%, respectively. “Collectively, these value shifts suggest that the central point of control for some consumers may be moving from internal (i.e., a focus on the self) to external (i.e., a focus on others’ well-being).” These shifts also echo the findings in the initial research.
  • As suggested in the initial research, there has been a shift from self-interest to friends, family and community. However, there is some noticeable generational divide, with Gen Z identifying ambition (74%) as their number one priority while protecting family tops the list for all other generations (see Figure 4). At the same time, power and status have seen a decline across all generations.

Top Values by Generation

  • With these findings in consumer value shifts, Zeno Group recommends the followings:
    • A heightened need for stakeholder listening. Brands and companies need to be sure their communications and actions are aligned with the control and empowerment their stakeholders seek.
    • A premium on problem-solving and community support. The public will want employers and brands to act in ways that demonstrate they are on their side and will be wary of overt branding and promotion.
    • A greater sensitivity toward economic pressures. The public will expect companies and brands to conduct themselves with an appreciation of this new economic reality.
    • A return to simple, classic pleasures. Depending on how long the economy’s slide lasts, and how long its recovery takes, values such as thrift and simplicity may become more central to our lives.

HOW CONSUMERS PERCEIVE BRANDS DURING THE PANDEMIC

Another survey of 800 Americans by Global Strategy Group finds that “Americans are focused squarely on the safety, health and well-being of their family, friends, communities and the country at large, while expecting corporations to do the same.”

  • Of those surveyed, 92% agree (58% strongly agree and 34% somewhat agree) with the statement “Companies have a responsibility to respond to the coronavirus pandemic.”
  • Overall, 49% say how a company chooses to respond to the coronavirus pandemic has a major impact on whether you choose to buy that company’s services or products and 26% it has a minor impact. Those fall in the 18-29 age group appear to place more emphasis on corporation responses (see Figure 4). Evidently, the companies that are perceived as at the forefront of the response are viewed most favorably (see Figure 5).
  • The majority of Americans believe that it is important to them personally for a corporation to take action, from employee assistance to making donations. For instance, 64% say it is extremely important and 20% say it is very important for a corporation to offer paid sick leave for employees who become infected with the virus (see Figure 6 for details).
  • While Americans believe that the safety and well-being of employees (55%) and positive impact in addressing the pandemic (36%) should be the focus of CEOs, 61% believe that in reality CEOs only focus on their bottom line and profitability throughout the pandemic.
  • Actions taken by brands leading to positive sentiments are keeping customers (58%) and employees (55%) safe, showing empathy and providing comfort (40%), recognizing the new normal (38%), extending benefits to consumers (35%), and clear and reassuring communication (32%).

Corporation Response ImpactCompanies at the Forefront of the ResponseHow Important It Is for Corporations to Take Action

Why Brands Should Care About Consumer Values

1. REVENUE AND BUSINESS RESULTS

  • Today, selling quality products at fair prices is no longer enough for consumers to invest their time, money and attention in brands. New research finds that consumers are making choices to buy from brands that stand for a purpose they personally resonate with. This could be on important values such as family connections, health and well-being, or societal issues such as environmental sustainability. According to Forbes Purpose Series, “companies that stand for something bigger than just what they sell typically deliver higher levels of commercial success because they mean much more to their customers.”
  • In fact, market research company Forrester finds that 37% of values-driven companies report double-digital year-on-year growth, compared to 32% of companies overall.
  • An example of companies that have successfully made purposes/values a core growth driver is Unilever. Of its 40 top brands, nearly half focus on sustainability. The company’s sustainability-focused brands such as Knorr, Dove and Lipton, are reportedly growing 50% faster than the company’s other brands and delivering more than 60% of the company’s growth (information as of 2019).
  • Another values-driven company is Lululemon, which is known for its loyal customer base. Capitalizing on consumer value shift towards wellness and environmental sustainability, Lululemon positions itself as the original creator of sustainable, athliesure-wear or “yoga-wear.” Additionally, Lululemon focuses on in-store workouts, helping the brand to build a loyal customer base (see statistics from the previous section highlighting consumer value of community).
  • The company also “uses social media to communicate and engage with its audience on a consistent basis. It is highly responsive to both positive and negative feedback online, which helps to promote an honest and authentic persona, and encourage a two-way dialogue with users” (see statistics from the previous section highlighting consumer values of online communities and technology).
  • The company is today among the BrandZ Top 100 Most Valuable Global Brands.

2. EMPOWERED CONSUMERS

  • As consumers have better access to information thanks to the internet, they are empowered than ever. With instant accessibility to information, consumers can easily evaluate companies’ values as well as how employees are treated. Thanks to social media, consumers are also more organized than ever, leading to a rise of grassroots consumer movements.
  • Forrester finds that the most empowered consumers are the trendsetters that influence other consumers’ decision and 70% of them believe a company’s social responsibility is important, compared to 48% of less empowered consumers.
  • In the wake of COVID-19, Patagonia is among brands that have gone “beyond mere messaging to demonstrate their commitment to their key communities.” The company continues to pay employees despite store closures. While retailers are generally struggling during the pandemic, the brand staying true to its values in this difficult time will likely pay off in long terms (see statistics in the previous section highlighting consumers expect companies to assist their employees throughout the pandemic).
  • Aside from scoring points with consumers, it is also important for brands to avoid backlash from empowered, values-driven consumers. A recent study finds that 38% of consumers are currently boycotting at least one company, an increase from 26% in January 2019.

In summary, the power of values-driven consumers is stronger than ever and will likely only be stronger as younger generations, who are more likely to make decisions based on values (see statistics in the previous section), are making up the majority of U.S. consumers with millennials overtaking boomers as America’s largest generation. This suggests that the future U.S. consumers will be more values-driven than ever.

TDM

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