The coronavirus crisis, and the senseless killing of George Floyd, served as a relentless one-two punch for companies of all shapes and sizes. As the virus wages on, and the demands for social justice continue to be urgently needed, companies that have purpose built into their bottom line are the most likely to remain standing. Suddenly, having a purpose is a superpower.
This unprecedented time in our country will hopefully drive us toward meaningful and long-overdue reform in critical areas: healthcare, civil rights, and the criminal justice system. In the short term, current events have created a field of reputational landmines for brands as they try to say and do all the right things for their customers, their employees, and the general public. This pivotal point in time is also leading toward a shift in power toward purposeful brands. For the first time in history, the do-gooders might actually have the upper hand.
In normal times, it’s fairly easy for companies to put on a good show when it comes to socially conscious behaviors. There’s long been confusion among consumers when it comes to determining which companies have a true purpose and which ones are just really great at promoting it. But recent events have turned things upside down, shaken companies to their core, and, for most, exposed whether their core values are as meaningful as they say. It’s been hard enough for mission-centered brands to get it right. But it’s been nearly impossible for those that don’t have social responsibility baked into their business model to get anything right.
In normal times, companies that operate with socially responsible models have uphill battles, competing against bigger organizations that don’t hold themselves to the same high standards. Their competitors cut corners, have lower moral and ethical thresholds, and possess unlimited marketing dollars to publicly shape their story.
But now the tables are turning. What once was a competitive disadvantage against status quo corporations is now a strength. What once made it harder for socially conscious companies to thrive and grow and scale is quickly becoming a strategic asset.
As long-standing conscious brands like Ben & Jerry’s are applauded for their response to the Black Lives Matter movement, many companies have instead received social media calls to “open their purse,” after hollow and half-hearted offers of support. While some companies have been held up as heroes during COVID-19, many others have stumbled badly in response to the pandemic.
If your company isn’t built on purpose, it probably hasn’t performed well during these trying times. Just think about how hard it is to know how to do the right thing when your organization isn’t designed to do the right thing. And now, with everything going wrong around us, many companies can’t even say the right thing.
Our firm, Good Must Grow, recently polled 1,000 Americans to update our annual Conscious Consumer Spending Index data. This research typically takes place in late fall, but we felt it was important to publish a midyear report, gauging how current events were impacting purpose. At the time of our study, the country was well into the throes of the pandemic, but we hadn’t yet witnessed George Floyd’s death at the hands of officers in Minneapolis.
Here’s what we found. After a three-year slide, consumers have been spurred to significant increases in a range of “do good’ behaviors such as reducing consumption, donating to charity, and buying products and services from socially responsible companies. This rebound comes at a time when approximately one-quarter of Americans are reporting a decline in household income, their overall well-being or both.
Consumers are more focused on purpose than they were before 2020 fell apart.
Just as importantly, consumers are raising their expectations. Almost half of survey respondents expected brands to be more socially responsible post-pandemic. More than three-quarters of Americans say that how a company treats employees and customers during the COVID-19 pandemic will be an important factor when determining whether to support them following the pandemic.
I’ve long felt we needed a catalyst to spur on the next iteration of conscious consumerism. Our current environment may be creating a perfect storm to do just that. Recent events have helped many Americans reevaluate what’s most important to them. Frivolous purchases are largely out the window. Daily distractions, unnecessary travel, and the overall busyness of life have been set aside. Beliefs about right and wrong, about justice and injustice, have been forced to the surface. Stress, anxiety, and financial insecurity have increased our appreciation of organizations that we can actually trust.
And while everyone is paying more attention to purpose, we are seeing a very clear separation between the purposeful and the pretenders, between those that only offer lip service and those that serve their community well. As they say, you learn a lot more about individuals and organization when the pressure is on and things aren’t going their way.
In our survey, we asked consumers to name one company or cause that was doing a good job of being socially responsible during the pandemic. The two most popular answers were Walmart and Amazon. Interestingly, we also asked consumers to name one company or cause that was not doing a good job of being socially responsible during the pandemic. The top two answers? Amazon and Walmart.
So, what’s happening here? Is this just a love-it-or-hate-it scenario, like the New York Yankees or kale? Maybe. But I don’t think so. More likely, what we are seeing is that companies trying to walk the line between profit and purpose are finding the balancing act much more difficult to master.
For all of Amazon’s efforts to gain sustainability headlines, including the announcement of a $2 billion climate pledge fund, much of the company’s recent publicity has centered on its failures to fairly and safely manage its workforce.
When the pandemic pumped the company full of demand, the already noticeable issues with its employee relations struggles became unavoidable. Why? Because it had to choose between pursuing maximum profits or standing on purpose and caring for its employees.
Amazon’s inconsistent performance during the pandemic has shone a brighter light on criticisms that have existed for years. For organizations like Amazon, there’s always been a debate about whether they are helping or hurting society. There is a duplicity that exists, because at the end of the day, these brands are not built like Patagonia and Newman’s Own. Instead, they’re in constant conflict between profit and purpose. The pandemic has seemingly declared a winner in this internal tug of war, and a growing number of consumers are not okay with the outcome.
Amazon’s failure to do the right thing by its employees during this crisis has been part of the reason we see these results in our survey. Consumers have less tolerance for hypocritical business practices, and they are less likely to be duped by missions that are propped up by marketing.
Here’s my prediction for what we will see moving forward: Brands that were already passengers on the purpose train before the pandemic will see their companies moving full steam ahead. All others will find themselves running furiously alongside the tracks, trying not to miss the ride altogether. Mega brands like Amazon will survive either way, of course. But they are less likely to be respected and trusted after the pandemic and the protests.
Heath Shackleford is the founder of Good.Must.Grow., a socially responsible marketing consultancy that helps purpose-driven companies and nonprofit causes succeed. He resides in Los Angeles with his wife and two sons.