A few months back, I wrote about the ethical consumer, giving advice on how to win his or her heart. I talked about the ethical-consumerism trend, which originated in the 1990s and took the Western world by storm (or at least I thought it did…). I then suggested that you must make changes in your business for it to be more “green,” be sensitive to social issues, and volunteer.
While I stand behind the notion that being an ethical business is good business practice, new research reveals that it might not be that important for consumers. A growing body of research suggests it is all a myth.
Timothy Devinney, Pat Auger, and Giana M. Eckhardt, three researchers from the University of Technology in Sydney, Melbourne Business School, and Suffolk University, respectively, explored the issue of ethical consumerism and came to a surprising conclusion: The percentage of shopping decisions made on a truly ethical basis is much smaller than commonly thought.
Where does this discrepancy come from? Well, as you can probably guess, the reason is that for many consumers, words are one thing and actions are another. Because ethical-consumerism research is mainly based on self-reports of purchase intentions, it is exposed to many biases. In the case of ethical consumerism, people tend to say they are much more ethical than they really are.
The researchers conducted 120 in-depth interviews with consumers from eight countries and came to two interesting realizations. The first is that consumers feel detached from ethical purposes; they do not view these issues as relevant to them personally. Instead, they view ethical and social issues as something that should be addressed by the government, the companies themselves, or the competitive market. The second is that functionality is far more important to consumers than ethics. When people were faced with a choice of high functionality / low ethics vs. low functionality / high ethics products, the majority of people chose the first.
“What’s the bottom line?” you may ask. Well, the bottom line is that people today are not willing to spend more on ethical products. However, according to the researchers, there is a high possibility this will change. They find similarities between today’s ethical consumerism and the 1990s’ e-commerce inception. Eventually, consumers will become more knowledgeable and engaged with ethical consumerism, and it will matter.
Devinney, Timothy, Pat Auger, and Gina M. Eckhardt. “Values vs. Value.” Strategy + Business Magazine. 62. (2011): n. page. Web. 30 May. 2013.