2020 was certainly a year of upheaval, and we know that big societal and economic changes are reflected in the way people choose to spend money. A survey conducted by Accenture of more than 3,000 consumers across 15 countries found that the Covid-19 pandemic is expected to change our shopping habits for good, with purchases likely to be centred around shopping more consciously, buying locally and embracing digital commerce even more than before.
People’s appetite for unethical products and purchasing from companies with questionable morals is slowly diminishing, with the growing awareness of the devastating effects that our consumerism is having on the environment and human beings. In its latest Ethical Consumer Markets Report, Ethical Consumer Magazine found that ethical spending reached record levels at the end of 2019, and that consumer habits shifted even further towards conscious choices in 2020 during the pandemic.
That said, Amazon, a notoriously unethical company, saw profits boom during the pandemic, and issues like greenwashing pose a threat to consumer trust and the success of genuinely ethical companies. So will ethical consumption continue to rise in 2021? And how can marketers can help ethical businesses succeed?
The rise of ethical consumption
In 2019, the total size of ethical consumer markets in the UK was £41.1 billion, whilst in 1991 it was nearly four times less, at only £11.2 billion. That is a pretty big increase in 20 years, especially for a sector reliant on consumer knowledge and awareness.
So why is it that the consumption of ethical goods has become so popular? As I mentioned earlier, consumer behaviour is often a barometer for public mood. Prominent figures and movements such as Greta Thunberg and Extinction Rebellion have done much to raise more awareness about the urgency of climate change and environmental issues in recent years, bringing it to the forefront of the public psyche.
Just look at ‘The Attenborough Effect’: according to a 2020 report by Global Web Index, David Attenborough’s documentaries highlighting the problem with plastic waste have led to a 53% reduction in single-use plastic usage over the last year.
Social media also has a big effect on consumption and lifestyles. Incredibly, 70% of shopping enthusiasts turn to Instagram for product discovery (Facebook, 2020). The successful social media campaign #ShopEthicalInstead run by @EthicalHour in the run-up to Christmas is just one great example of how social media is helping people discover ethical products, small businesses and information on shopping more consciously.
In recent years, there has also been an influx of second-hand apps such as Depop, Facebook Marketplace and Vinted, making the process of selling your used and unwanted goods extremely easy, whilst also bagging ethical bargains. More and more people seem to be embracing the growing second-hand culture. Where there was once shame and stigma around purchasing items second-hand, this has been replaced by its “rebranding” as a sustainable and ethical choice.
The pandemic has been a wake-up call for many as well: with a year of the nation being shocked by the sight of bare supermarket shelves, businesses being forced to close and our health under the spotlight, 25% of us have now vowed to shop more sustainably this year, according to a national survey conducted by Ginger Comms for Voucher Shares.
With more purchases happening online and thus more time to think and consciously decide who to buy from, many have intentionally started purchasing more from small and ethical businesses.
The problem of Amazon and overconsumption
On the flipside, retail giant Amazon grew significantly during 2020, with the company announcing that by the end of July, net sales had risen by 40% compared to the previous year. Amazon’s free, fast shipping with competitive prices is clearly a difficult offer to resist.
To keep up with the demand, Amazon has increased its workforce by a third. However, this sales growth has come at a cost to its employees. It has been reported that Amazon’s staff have been expected to work tougher, longer hours just to keep up with the rate of sales being made daily on the e-commerce website.
In some ways, Amazon’s business model was built for the pandemic, which has seen an even bigger shift to online shopping, making the ease and convenience even more alluring. And according to some analysts, the company is only set to build on this growth.
So what does this mean in the battle for more widespread ethical consumption?
Will ethical consumption “win”?
After 20 years of ethical consumption increasing, a hugely successful year for Amazon might feel like we’ve gone back in time. However, as 2020 was a year like no other, it’s not guaranteed that Amazon will have a year like this again – it could just be a knee-jerk reaction to the pandemic that we’re seeing.
More people have been shopping online in general – money that would have gone to high street stores has instead been transferred to Amazon. It’s a choice of convenience rather than intention, whereas the boom in ethical consumption could instead be seen as a sign of a wider social change. It has demonstrated more long term, sustainable growth for two decades and is gaining power year on year.
The greenwashing issue
You might not have heard of the term ‘greenwashing’, but you’ve likely heard of the companies that have been accused of using it as a marketing tool to mislead their customers into feeling like they’re doing their part in helping the environment. H&M, Nestlé and BMW are all household names who have been accused of greenwashing by encouraging consumers to shop with them under the illusion that they are eco-friendly. With a growing number of consumers willing to pay more for sustainable products, it can be financially rewarding for businesses to market themselves as sustainable and eco-friendly, but these dishonest techniques can devalue genuinely ethical businesses.
In an article for Medium, Leyla Acaroglu (2019) describes greenwashing as: ‘spending more time and money claiming to be “green” through advertising and marketing rather than actually implementing business practices that minimize environmental impact’.
What is being done to combat these fibs? We don’t want 2021 to be the year of the misled conscious consumer. Just last month it was reported that the UK’s competition watchdog, Competition and Markets Authority, is investigating whether brands marketing their products as ‘eco-friendly’ and as other green buzzwords are misleading customers, especially in the fashion, transport, food and beauty industries. Sustainability experts have been calling for the government to intervene in greenwashing for years and it finally seems to be progressing.
As any company can just jump on the ethical bandwagon without the policies to back it up, genuinely ethical companies should therefore make sure that they shout honestly about their practices in detail and become certified. There are a range of certifications out there including Certified Vegan, Soil Association and Forest Association and can all be invaluable to authentic ethical and sustainable companies. Over time, the more truly ethical businesses that hold a certification, the companies who use greenwashing as a marketing strategy will be outed.
How marketers can help ethical businesses be successful
For marketers working with and within ethical businesses, it is increasingly important to communicate ethical practices transparently as a core part of marketing efforts. Rather than just using vague buzzwords in their marketing, business should provide customers with concrete information on what they do in order to be ethical and sustainable. This should be a central brand message alongside the value and benefits offered by the products or services themselves.
And as for the Amazon issue – it might be tempting for ethical businesses to try and compete with Amazon at its own game, attempting to match speedy delivery and low prices. But Amazon’s whole business model is bad for the environment and people. As the public become more conscious consumers, ethical brands should focus on what sets them apart, as well as nurturing relationships and trust with their customer base.
Here’s hoping the ethical consumption boom carries on into 2021 and beyond.
Rachel Baker 