Younger consumers are seriously concerned with social and environmental causes, which many regard as being the defining issues of our time. How will this shift impact business? How will this shift impact Arizona consumers? It appears the writing is on the wall.
Younger, urban progressives are the future of luxury consumerism and a population that increasingly backs their beliefs with their shopping habits, favoring brands that are aligned with their values and avoiding those that don’t.
Brands are responding by integrating social and environmental themes into their products and services. The benefits of these policies are clear, but as the causes that some brands champion venture into controversial territory there are risks and consequences for those that fail to get it right.
Nine in ten Generation Z consumers believe companies have a responsibility to address environmental and social issues. The inclusion of the latter is a departure from the views of the previous generation of millennials, which had a greener focus. The change is reflected in the higher profile of social issues, and campaigns such as #MeToo, #BlackLivesMatter and #TimesUp, all of which have entered the mainstream lexicon over the past couple of years.
The views of Gen Z and millennial consumers are critical. Together, these cohorts represent around $350 billion of spending power in the US alone (~$150 billion spent by Gen Z and ~$200 billion by millennials) and Gen Z alone will account for 40 percent of global consumers by 2020. But concern over environmental and social issues is not restricted to younger consumers. Some two-thirds of consumers worldwide say they would switch, avoid or boycott brands based on their stance on controversial issues. Half of these regard themselves as activists, driven by passion. The other half are less dogmatic, tailoring their decision to the situation at hand.
Still, the dynamics behind the numbers are compelling. Over the past three years a third of consumers worldwide have expanded the scope of their purchasing decisions to incorporate principled values and views. A new global ethos is emerging, and billions of people are using consumption as a means to express their deeply-held beliefs.
Signs of this evolving agenda can be found beyond consumer sentiment too. Fashion companies are showing signs of getting “woke” (a phrase defined as “alert to injustice in society,” popularized on social media). For example, based on a “data scrape” of over 2,000 high-end retailers, the appearance of the word “feminist” on homepages and newsletters increased by a factor of more than five from 2016 to 2018.
Many brands and retailers including Nike and Levi Strauss are on board, and both companies have taken a clear stance on social issues in recent months, and in light of the 2020 elections, it appears the tide is turning in favor of kindness-centered companies and inclusive efforts.
One thing we know for sure, when the tide turns in Arizona, we’ll be at the front of the march.