Today’s younger generations crave authenticity from value-centric brands. Embracing an “actions speak louder than words” mentality will help you attract these younger consumers, while pushing you to make your community (and potentially the world) a better place.
If you run a successful business, you know what your customers care about. But do your customers know that you know? When your customer sees, thinks or hears about your brand, they should feel a sense of reciprocity when it comes to shared values. If you can adequately communicate your shared, value-driven passions with your customers, you can help build a better future, and you’ll build loyal customers while you’re at it!
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Take a stand on important issues
Taking a stand on important issues will make your customers feel proud to support you and elevate your voice. According to an Aflac CSR survey, 70 percent of customers and investors believe companies should use their resources to make the world a better place and 77 percent are motivated to purchase. The ramifications of failing to properly support an issue, and thus disappointing your audience, results in about 48 percent of people leaving a complaint on social media.
The social and political climate can play a role in the pressure that businesses face from consumers. During the #BlackLivesMatter movement, 69 percent of survey respondents ages 16–34 felt brands should be involved in the BLM movement. These opinions don’t just affect how they view the brand itself. It also affects their purchasing and boycotting decisions. An Edelman survey showed that 60 percent of the US population considers a brand’s response to racial injustice when making buying decisions.
Ice cream, you scream, we all scream to end racial injustice
You might think that ice cream and fighting against racial injustice don’t go together. But actually, for Ben & Jerry’s ice cream, it does. Ben & Jerry’s has made it its mission to support the BLM movement and actively work to solve racial injustice. The ice cream chain decided to use its power and influence to take a stand on social media by clearly stating its position, educating and offering solutions.
In an interview with Harvard Business Review, Matthew McCarthy, Ben & Jerry’s CEO, stated that the company has seen growth due to its social activism. They have even “launched issue-oriented ice cream flavors like Pecan Resist, a nod to Black Lives Matter, and Change the Whirled, with NFL quarterback and racial justice advocate Colin Kaepernick.” Their consumers, which McCarthy refers to as “fans,” are very supportive of their vocal style and the efforts they have made to take a stand against racial injustice. He states, “Some of them buy more ice cream as a result. They don’t have to. That’s why we call them fans, not consumers.”
Gear your marketing to what’s important to them
If you’re hoping to attract the attention of younger consumers, like millennials and Gen Zers, focus your marketing efforts on product pricing, convenience, availability and choice. Not only will you be catering to their customer needs, you’ll be reeling in the right customers. According to the IBM Institute for Business Value, an individualized experience with a speedy checkout process, easy returns and cashless self-service are key Gen Z customer values.
Adopt a nimble, innovative tech mindset
Gen Zers are attracted to brands that are consistently evolving in ways that remove friction and enhance the customer experience. Communicate product, web and app updates in your marketing to get this audience excited and engaged with your brand. Your brand should adjust to new trends, economics and cultural factors to effectively and efficiently engage your consumers.
Chipotle is a great example of a nimble and innovative brand that gears its marketing towards what’s important to its customers. The company provides customers with a user-friendly app and includes phrases like “Friends for Life” and “Obvs” in their marketing messaging in order to fit in with the lingo that its customer base uses. To further improve its marketing and sales efforts, Chipotle displays information that communicates it cares for the health and wellness of its customers. For example, its website includes helpful nutrition facts and multiple FAQ pages.
Chipotle also does an excellent job of engaging its customers on social media with content that is both trending and speaks to its audience’s interests. Chipotle’s TikTok account spotlights influencers like “Garden Marcus,” who composts his paper Chipotle bowl. This type of content aligns with both Chipotle’s values and those of its audience.
Related: How Chipotle combines customer and digital engagement strategies to reach new revenue heights
Individualize their Experience
Young consumers expect companies to provide tailored marketing in which their data and choices affect the customization of the marketing experience. Your brand can use surveys and landing page data to gather information on your customers and deliver the appropriate marketing strategy. This includes highlighting your rewards program, sales and a consistently wide assortment of product options.
Chipotle offers a rewards program that adds value. As a rewards member, you can choose to cash in your points toward a free meal, Chipotle swag items or a cause you care about. The unique option to donate points to charity resonates with its customers and hits on yet another value: charitable giving.
Finally, Chipotle’s website includes an easy way to contact support AND has the option to “make a suggestion.” Having an online suggestion box like this can empower your customers to create and collaborate with you, yet another important value for young consumers today.
Don’t send mixed messages
Maintaining transparency and consistency about your brand’s message is key to showing your customers you share their values. According to Deloitte’s Global 2021 Millennial and Gen Z survey, “seven in 10 millennials feel that businesses focus on their own agendas rather than considering the wider society.” Customers want to see you take corporate social responsibility. In fact, about half of online consumers in the US and UK would even pay a premium to support a brand that exhibited a socially conscious image.
Consumers make money decisions based on factors like sustainability and environmental treatment, personal data protection and social and political issues. Deloitte’s survey found that as of 2021, 28 percent of respondents started or deepened a customer-business relationship with brands whose products or services positively impacted the environment. About the same number of respondents ceased or reduced their relationship with brands that harmed the planet.
Use data & storytelling to present real-world impact
It isn’t enough to make promises about positive societal change to your customers. You have to follow through and then share how your efforts have made a real-world impact through data. By representing your data in an easily digestible manner, you’ll appear more authentic and gain the trust of your customers.
From its inception, Patagonia has always been at the forefront of businesses that embrace environmental protection and sustainability. Rather than leading with sales and products, Patagonia’s web home page features storytelling surrounding its mission and highlighting important community stories. The company dives into its personal impact on the planet through its “Footprint” landing page. Patagonia’s loyal customers share a love for the outdoors and continue to support the brand thanks to the efforts it puts into protecting the environment.
Be readily available to your customers
Younger generations value great customer service and possess a low tolerance for bad customer experience: 50 percent of millennials and Gen Zers will switch to a competitor after even just one bad customer experience, and 80 percent will switch after multiple bad experiences. By using a format that provides instant gratification and rapid solutions, like instant messaging services, businesses saw a surge in millennial and Gen Z support requests. About 35 percent used it for the first time, more than any other channel that had first-time usage.
Your efforts to resolve customer issues, answer questions and generally be available for customer needs will speak volumes to your customers. Not only will you meet customer expectations for great service, but you will also gain the respect of your customers as a brand that embraces the value of excellent customer service.
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Case Study: REI
Similar to the idea that not everyone is your customer, not every customer will identify with your company’s values. For Recreational Equipment Inc.—better known as REI—a risky “aggressive commitment” to its values helps it soar.
As we progress into a values-based purchasing future, brands that take a stance will rise above the competition, and REI sits comfortably at the intersection of strong company values + effective digital strategies. As a company, it wants more people to get away from their screens and go outside—so, then, how do digital sales continue to skyrocket?
REI heightened its sales and member base not by courting every consumer that exists, but by unwaveringly standing for a value.
REI Co-op was founded on a value: outdoor accessibility and sustainability
REI’s founding value was to put purpose over profits. It did that by building a business around a life outside.
From the start, REI has lived that value by giving the majority of its sales back to members and outdoors-based philanthropic endeavors. It all started in 1938, when a group of climbing buddies, fueled by the fact that they “loved mountains more than money,” formed a cooperative rather than a corporation. A cooperative, or co-op for short, is defined as “a farm, business, or other organization which is owned and run jointly by its members, who share the profits or benefits,” and “involving mutual assistance in working toward a common goal.” In short, REI is owned by its members.
REI’s 19 million lifetime members—an achievement unlocked by a one-time $20 buy-in—share in the company’s profits. Members receive once-yearly “dividends” based on how much they spent at the retailer in the previous year, as well as benefits like exclusive events and discounts on rental gear.
REI cares for the environment—and they’re not afraid to show it
Consumers trust brands to tell them the truth more than they trust the government, believe it or not. REI captures that trust and turns it into fuel for sustainability—or what they call stewardship. And REI customers love supporting a company that takes a stand.
As a brand, “being neutral is no longer an option.” And it’s true—a Forrester study showed that “70 percent of the most empowered consumers believe a company’s social responsibility is important.” And while younger generations typically get the credit, that sentiment covers generations, with 52% of U.S. consumers over the age of 60 believing it’s important for brands to take social responsibility, compared with 60% of those ages 34 and under.
"REI would rather forfeit some sales than forfeit its values."
When it comes to politics, REI “maintains a nonpartisan stance,” but it’s very clear about where they stand on (traditionally more) bipartisan issues like climate change, public lands, and equality. REI also partners with brands like Patagonia and North Face on taking a stance for nature. For example, when Utah’s Bears Ears size was reduced by 85% in 2018 by President Trump, all three brands boycotted the Outdoor Retailer trade show, which is “a major source of revenue for Salt Lake City,” according to Business Insider. In other words, REI would rather forfeit some sales than forfeit its values.
REI reinvests more than 70% of its profits into the great outdoors
REI surpassed $100 million in give-back to outdoors-focused philanthropies last year, yet they still hit record-breaking revenue, with $3.1 billion in revenue. Maybe it’s good karma—or maybe it’s the perfect example of how a values-based business can give back and still be successful.
REI reinvests a majority of its profits in things like building trails, enhancing campsites, connecting minority groups to resources that get them outside, and “rewilding.” In 2019, REI invested $8.1 million in 427 nonprofits, creating and stewarding 6,232 outdoor places and “more than 9,000 miles of trails.” The co-op also has a 501c3 nonprofit, The REI Foundation, that gives annual grants to various local philanthropies that are rooted in the company’s core values.
REI steps up sustainability with online used gear sales and rentals
One of REI’s core values is sustainability, and many consumers are starting to reject fast fashion, opting for used instead. That value paired with that trend results in a vast expansion of REI’s (even more) sustainable online and in-store offerings: used products and rentals.
The value-based strategy is also a smart business move. “Over a third of Millennials would rather rent than own a product,” according to REI. The resale market is gaining much more traction, too. In a 2020 ThredUp study, 70% of women have shopped secondhand or are open to it, compared with just 45% in 2016. That data is true for REI customers. Forbes reported that the co-op is “on track to resell nearly a million used items this year and about double its online used business.”
In an interview with SGB Media, REI spokesperson Halley Knigge said REI had turned its focus to reinvesting in the company, including “vastly expanding our rentals and used gear offerings and adding eight new stores.” Knigge added, “[W]e believe these investments are setting the co-op up for success in our next 80 years as our customers begin to demand more rentals, used gear and experiences offerings.”
REI’s digital strategy garners expansion and loyalty
Aside from mobile apps that create a seamless physical-digital experience for its members, REI digs in its values-based heels with Opt Outside, a digital campaign that clearly displays REI’s relentless commitment to the outdoors.
What started as a one-time PR play, REI’s Opt Outside campaign has turned into a movement. Opt Outside is arguably REI’s biggest digital display of their values: Every year, on Black Friday, as many stores are clocking their highest revenue day of the year, REI closes its doors and urges its customers to go outside instead.
You’d be hard-pressed to find Black Friday revenue numbers for the outdoor company, since, technically, they don’t participate. But in its first year alone, #OptOutside warranted a “23% uptick in digital sales,” according to Retail Touchpoints. And in 2019, REI saw an overall 8% increase in digital sales.
When REI introduced Opt Outside in 2015, it garnered a “7,000% increase in social impressions and more than 2.7 billion media impressions in the first 24 hours, not to mention an absurd 9 Cannes Lions for REI’s PR agency, Edelman,” according to data gathered by Sprout Social. Not to mention that the use of the #OptOutside hashtag shows a trend in increased customer loyalty and referrals. Sprout Social found that the hashtag went from “338K engagements in 2015 to 11.6 million in 2019.”
Everything the co-op has done over its 82 years has intended to do one thing: get people outside. And not only do people get outside, but they buy from REI to do so. According to REI’s CIO, Julie Averill, in a New Relic case study, technology aids in their mission of getting people outdoors. “[Technology] can help them find great gear, help them have a great experience in our stores. It can help them find a great trail, help them get access to expertise, and it can help them find community.”
Consumers buy from brands that take a stand
When you choose REI, you choose a lifestyle. And that’s exactly the feeling 41% of consumers want—and that number is only growing.
According to Forrester, “Companies that put their values into action grow faster than other companies.” Sixty-eight percent of U.S. consumer purchases are influenced by a company’s commitment to social responsibility, and 41% want to buy from companies that are up front about their social, environmental, and political values. If you don’t believe us, take it from REI: An unwavering commitment to its values has resulted in a loyal and intentional member-base that’s carried them for more than 80 years.
Find out why 90 percent of Gen Zs say companies must act to help social and environmental issues.
Brands and businesses alike who are shifting to values-based can do three things:
- Identify the values of your customers. Especially in today’s climate, customers want to be heard. Value identification can be as simple as surveying current customers about what they value and what they’d like to see you speak up about.
- Communicate your values in human-speak. Getting your values out there for consumers in ways that feel true to your brand is a given, but doing so in an authentic way is more important. More than ever, customers want to be treated like people, not dollars, and values-based positioning is the perfect way to help them feel supported.
- Work your values into every initiative. If your new product launch or line isn’t aligned with a value, why not? And if not, how can you get it there? The reason for REI’s ultra-dedicated customer base is because every product, experience, and offering is completely aligned with one of its core values. To be a true values-based business, each initiative should have a clear tie.
REI’s digital strategy starts and ends with its values
REI’s commitment to its values and its members isn’t time wasted. Aside from its members being responsible for a heaping 90% of its sales, its commitment also aids in the company’s digital transformation.
Being values-based allows REI to center the customer experience, working backward from the experience into the technology that supports it. With a strong member base, REI has even stronger data prowess that allows REI to implement digital transformation strategies that support its members (and its values as a business.)
The data is clear: Customers are more loyal to brands that align with their values. And, by now, we know that loyalty increases sales—especially through digital-first touchpoints. So, moving forward, brands that make their values clear will find themselves in a better spot not only with loyalty but also with sales.
There’s a long way to go before sustainability becomes more important than profitability, at least in the eyes of large retail enterprises. Big brands like Burberry and Nike have had a history of destroying millions of dollars in excess merchandise annually to maintain their exclusive appeal. Yikes. After public outcry, Burberry has since stopped the practice, but if they were (and others still are) recklessly disposing of end products, it’s hard to put much faith in how they prioritize responsible production.
But, thankfully, consumer values are shifting. Eighty percent of consumers say they value sustainability, and more than 70 percent say they would even pay more for products from eco-friendly brands.
Sustainable business practices are the reassurances that businesses offer these consumers. They promise that a brand will take whatever measures necessary to lessen their impact on the environment and boost eco-friendliness in their operations.
Businesses that undergo digital transformation find it easier to introduce environmentally friendly practices. These digitally renewed processes match the values of today’s consumers, improving brand perception and driving sales. So, yes, it is possible to be both profitable and sustainable.
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How does digital transformation drive sustainability?
Digital transformation drives sustainability mainly by giving businesses a very clear picture of what their environmental impact is. This is made possible through data collection and analysis.
The data collected is anything related to sustainability—resource consumption or carbon emissions, for example—and is most efficiently collected through the use of IoT sensors. These sensors collect and transmit data wirelessly in real-time, giving businesses precise insight into how they can improve.
According to Deloitte’s Sustainability Analytics Guide, “Thanks to the latest [digital] tools and techniques, companies can now conduct real-time (or near real-time) sustainability analysis on vast quantities of data in three dimensions of time: past, present and future.”
AI and machine learning have big roles to play, too.
Armed with the right data, machines and equipment can automate decision-making processes that reflect the sustainability goals of the business. An article by Wayne Thompson, Huy Li and Alison Bolen of SAS states: “Artificial intelligence (AI) brings with it a promise of genuine human-to-machine interaction. When machines become intelligent, they can understand requests, connect data points and draw conclusions. They can reason, observe and plan.”
Related: Humanizing digital banking through conversational AI
“Thanks to the latest tools and techniques, companies can now conduct real-time sustainability analysis on vast quantities of data in three dimensions of time: past, present and future.”
AI-monitored resource use at a facility leads to a better understanding of how wasteful production is. Machine learning algorithms can actually decipher this data in real time and then, within seconds, optimize processes for less waste. Similarly, automated reporting of greenhouse-gas emissions keeps the business informed of where changes need to be made so they’re in line with sustainability objectives.
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Which areas can businesses focus on digitizing to increase sustainability?
Companies can begin by focusing on three core business areas: supply chain, waste management and manufacturing. All three have the potential to make the biggest environmental impacts because they’re interconnected with it and consumers are aware of that.
Buyers want to know that their products were made from ethically sourced, renewable, raw materials. They also want to know that waste from production doesn’t end up floating in the middle of the ocean for decades.
Supply chain
Digitizing the supply chain (mostly) means making it completely transparent. As Harvard Business Review defines it, “Supply chain transparency requires companies to know what is happening upstream in the supply chain and to communicate this knowledge both internally and externally.”
This requires businesses to collect data at every link in their supply chain and make that information available wherever it’s relevant. This demonstrates that the business is willing to disclose proof of their sustainability efforts, and it holds them accountable for how they source materials.
But how does a business keep track of all that information? SaaS brands like Optimity have designed high-tech software with sustainable supply chains in mind. From demand planning to business visualization, these types of tools give businesses the digital ability to deliver that transparency to consumers.
Related: Retail analytics answer the “why” of business performance
Waste management
Man-made materials poorly disposed of wreak havoc on the environment. It’s no secret that plastic in landfills can take up to 1,000 years to biodegrade, and a lot of the refuse used in production shares characteristics with plastic.
This is especially concerning when businesses don’t make any attempt to recycle or redistribute products. And while waste is all but inevitable in consumer production, responsible businesses need to have a plan in place for disposing of or repurposing waste.
And there are brands making it their mission to innovate waste management, all with sustainability in mind.
Enevo, a Finnish company that uses technology to provide better waste-management solutions, is galvanizing the bond between digital and sustainability. They use a combination of their revolutionary sensor and dynamic analytics platform, as well as their routing and planning capabilities, to achieve this. It’s a way for the company to give businesses around the world the ability to collect, analyze and use data to improve their waste disposal systems.
Manufacturing
Sustainability in production processes is partly about waste but mostly about greenhouse-gas emissions from manufacturing. With millions of facilities across the planet pumping toxic emissions into the atmosphere 24 hours a day, the threat is very real.
For businesses that operate sustainably, it comes down to knowing precisely what the impact of their production processes is making and taking action to reduce it. The introduction of “smart factories”—digitally integrated manufacturing facilities that combine the philosophies behind digital transformation and sustainability—are the future.
Take Stratus, for example. They’re a leading brand specializing in using automation and AI to refine and optimize industrial processes. They apply these concepts in a manufacturing sense to automatically maximize yield while staying within environmental regulatory guidelines and protecting businesses’ reputations.
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Why are sustainable business practices so important?
Sustainable business practices matter not only for the longevity of the planet but also in how a company is perceived by consumers, prospective employees, partners and investors—and what this means to their bottom line.
Consumers prefer buying from eco-friendly brands, and their interest in these brands’ activities isn’t just superficial. A study by Maryville University discovered that 64 percent of North American respondents and 84 percent of European respondents, respectively, said sustainability must be a core part of a brand’s agenda, which was echoed by 89 percent of respondents everywhere else.
64% of North American respondents and 84% of European respondents, respectively, said sustainability must be a core part of a brand’s agenda, which was echoed by 89% of respondents everywhere else.
Job seekers are also more interested in working with companies that actively practice sustainability. Nearly three-quarters of surveryed millennials say they’d be fine with lower pay if the company they worked for was environmentally responsible, with a staggering 10 percent even willing to take a $5k-10k pay cut to work for a more sustainable business.
Partnering with like-minded brands causes a ripple effect where they thrive off each other’s sustainable business practices. This is most evident in the supply chain, where, if your suppliers are environmentally conscious, it reflects well on your brand.
These combined efforts of prioritizing sustainability increase a brand’s reputation and their chances of attracting investors.
Digital for a sustainable—and profitable—future
Sustainable business practices aren’t just a means of clearing business conscience or staying on-trend. They’re a practical way of securing business growth and solidifying brand position, with digital sustainability at the forefront of public interest.
By taking a data-driven approach, leveraging AI and automation and applying it to key business areas where it makes the most sense, businesses can be confident they’ll win more than just respect and admiration.
Remember, it’s possible to be profitable and sustainable. Stay green!
