Monday, July 22, 2024

Growing importance of positive social impact for retailers

Australian consumers expect companies to act in a more socially and environmentally responsible way and many are willing to pay more for products and services that are values aligned, according to new research from the Australian Retailers Association (ARA) in collaboration with the Queensland University of Technology (QUT).

The in-depth survey measuring how Australian consumers perceive a retailer’s corporate purpose, how it impacts behaviours and how perceptions differ across industries and product categories found:

  • A majority (69%) of consumers believe that the purpose of a retail company in general is to respond better to social and environmental issues
  • Consumers are willing to pay more to buy products/services with retailers whose values align with theirs, with 24% willing to pay more than 5% and 13% willing to pay more than 10%
  • Transparency around performance reporting and the retailers’ willingness to openly reveal their negative results (mentioned by more than 50%) are very important indicators for consumers in their perceptions of a business a high corporate purpose
  • Retailers operating in the food and grocery sector are perceived by consumers as doing well in terms of corporate purpose, ahead of furniture and housewares, books and magazines and pharmaceuticals and cosmetics.
  • Younger consumers are more aware of a retailer’s corporate purpose, whereas older consumers show more concern on health and safety issues and regulation compliance
  • Consumers believe retailers should focus on ensuring human rights and developing sustainability initiatives, over putting efforts into political lobbying or added value for investors.

ARA CEO Paul Zahra says the findings show how important it is for retailers to lead on social and environmental issues.

“Consumers are becoming more values driven when it comes to their shopping, and they will actively pursue brands that resonate most strongly with the social and environmental issues that are important to them. Consumers will even pay more for products and services if a retailers values align with theirs,” Mr Zahra said.

“Addressing the impacts of climate change and strengthening sustainability initiatives are a key focus for the retail industry as we transition to the low carbon economy of the future. What this research shows is that businesses risk alienating their customers of they’re not able to demonstrate a high corporate purpose. They need to talk the talk and walk the walk when it comes to delivering better outcomes for the environment. Honesty and transparency around how businesses are tracking on their sustainability journeys are also important indicators.”

Chair of the ARA’s Consumer Research Advisory Committee and QUT Professor Gary Mortimer says: “Having the right corporate purpose is more important than ever. A proper corporate purpose allows retailers to effectively communicate their social and environmental initiatives and demonstrates their commitment to corporate social responsibility

“Our research indicates consumers highly value retailers that care about their employees first and foremost, then the communities and consumers they serve by establishing a healthy and safe working environment.”

“Consumers now also have higher expectations of retailers and brands that are aligned with intrinsic value towards social justice and equality, as well as environmental concerns,” Professor Mortimer said.

The ARA is uniting the sector behind a common vision for change through its Climate Action Plan and Net-zero Roadmap and was the second retail association in the world to sign the UN-backed Race to Zero Accelerator Pledge.

 

*QUTs in depth research is based on a 22-item, quantitative, online survey that was circulated across a sample of 200 respondents, equally distributed across Australia in NSW, Queensland and Victoria with a balanced gender representation.

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