Study Finds Millennial Consumers Are Heavily Swayed By Ethics and Practices of Marketers

By John Consoli -- Broadcasting & Cable, 10/23/2012 2:29:53 PM

The most important key for marketers hoping to gain brand loyalty from millennials is not promoting the attributes of products through advertising, but the respect they earn from the ethics, practices and image each company exhibits, according to a study released Tuesday by consumer insights company The Intelligence Group.

The study, part of Intelligence Group's ongoing Cassandra Report "Good Guide," surveyed 900 14-34--year-olds online, asking about a variety of social issues related to their social consciousness. It was conducted from June 23-July 3, 2012.

Among those surveyed, 59% expressed that a company's ethics and practices are important factors in deciding what brands they will buy.

"When I disagree with a brand's ethics, I seek out their competitors, or alternatives to their product or service," one respondent said.

"I like supporting brands that I know are socially conscious and will spend a little extra to [be] so," said another respondent.

"If a brand I liked or bought from severely broke my moral code, I would probably boycott the brand," said a third. And still another said, "Ethics play quite a large role in what I do or do not consume."

Citing what it calls "wallet activism," the survey finds that in the past year, 30% of respondents to the survey have stopped supporting a brand because of something they learned about its corporate practices or ethics. Included among those brands are Walmart, McDonald's, BP, Tyson, Chick-fil-A and Gap.

"I rarely went to Chick-fil-A before, but I will no longer give money to that company," one respondent said. "I can't support a company which has funded a cause that I'm opposed to."

Another said, "I refuse to go in Urban Outfitters because of the CEO's political views and the organizations that he chooses to give his money to." And still another said, "I have bought chocolate bars with the free trade logos as opposed to Hershey or Nestle. I like knowing that the cocoa farmers are getting paid a fair wage for the beans."

Conversely, in the past year, 27% of respondents said they have started purchasing or supporting a brand specifically because of its socially responsible practices or ethics. Included among those brands are Procter & Gamble, Ben & Jerry's, Microsoft, Toms and Kellogg's.

"First I was annoyed that Toms was more expensive than before, but then I thought about their mission to donate a pair of shoes for every pair purchased and so I decided to buy them anyway," said one respondent.

Some other "good brand" comments:

• "P&G is a brand that I try to stay loyal to. Their detergents are known for being environmentally friendly."

•  "Kellogg's does a great job using their ‘power of breakfast' standpoint to promote healthier diets and support all kinds of athletes, including Olympians, youth and those with handicaps."

•  "If I am going to give my money to multimillion-dollar corporations, I would like it to at least benefit others in a positive way."

Joe Kessler, president of The Intelligence Group, believes the survey provides a different, valuable picture of millennials. "Gen Y may have a reputation for being slacktivists, but the reality is, this is a generation with a strong social conscious and they are a force to be reckoned with," said Kessler in releasing the results of this latest survey. "This generation of 80 million-plus cares about the world around them and they show and share their social consciousness through the products they choose, the entertainment they consume and the experiences they pursue."

And what do the millennials surveyed believe are the most important characteristics in a brand?

A total of 81% said affordability, 79% said quality, 78% said trust, 71% said environmentally friendly and 71% cited ethical practices, with 61% saying alignment with a cause or social issue, and 60% stating the importance of it being American-made. Only 56% said a great website is important and 51% said great advertising is important. Only 29% believe celebrity endorsements are important for brands. And the percentages in demo groups 14-18, 19-24 and 25-34 were all pretty much consistently the same in all of the above categories.

In discussing the question of what the good brands do, the survey found that millennials don't just want to hear about causes and issues brands care about, they want to actually see the brands take action. Among survey respondents, 53% would like brands to respond and react to disasters and crises by helping out immediately to show their support. And 43% would like brands to create events and experiences that support different causes.

And when brands are preparing their next ad campaign, here are some areas to consider: 47% would like brands to take them behind the scenes to show where and how their products are being made; 43% would like brands to talk about issues and causes they believe in; and 41% would like brands to show the people behind the brand and the contributions employees are making to the company and brand.

"When buying a product, I want to know its origin, where it has been manufactured, whether it is affordable and what other people think of it through reviews," said one respondent.

"Eco-friendly is very important," said another respondent. "Cage-free and humane food products are as well. I will pay the extra $2 to ensure my chickens were not kept in tiny cage enclosures."

In keeping with that thought, the survey finds that 45% believe that in the future, all brands will need to be socially and environmentally conscious in order to survive.