Social Impact: What it Means and Why It's Important to Your E-Commerce Business
E-commerce continues to grow consistently year after year and in 2022, it’s expected that 21% of sales worldwide – totalling a cool $5.55 trillion – will be made in online purchases. That’s up 3.2% from 2 years ago and it isn’t likely to slow down any time soon. In fact, online sales are expected to reach 24.5% by 2025, which means that, globally, e-commerce purchases are anticipated to see an increase of 6.7% in just 5 years.
While the earning potential for your e-commerce brand is huge (and growing), your social (and political!) views, how they align with your values and what you’re ultimately doing about them, now play a crucial role in the overall success of your e-commerce brand both internally and externally.
Traditionally, businesses tried to remain neutral in terms of broadcasting their stance on social issues to avoid rocking the boat. But, studies have shown that 70% of consumers actually want businesses to be vocal about their stance on social and political issues. Consumers and employees alike now expect businesses to have stronger views and take action to support them.
The truth is, consumers no longer want to only buy products and employees no longer want to just work for a paycheck; they want to support the brands who share their same values and take steps towards meaningful social impact.
What is Social Impact?
E-commerce brands do more than create products or provide services. Intentionally or not, e-commerce businesses have an impact on society, the environment, the economy and social change. Social impact is the effect – which can be either positive or negative – of the actions your e-commerce business takes.
Your e-commerce brand can generate positive social impact in a number of ways:
- Create products using sustainable materials that won’t harm consumers
- Ensure manufacturing of your products is safe for the environment
- Collaborate only with stakeholders whose values are aligned with your own
- Provide an ethical and equitable environment for employees
- Develop strategies that support social and environmental issues
- Create authentic partnerships with charities and donate regularly
Social impact refers to the difference your e-commerce brand is making in the world and highlights where you stand on matters that affect your surroundings by including a cause in your marketing strategy – a tactic referred to as cause-related marketing. Cause-related marketing allows e-commerce businesses to align themselves with social issues and non-profit organizations or charities to bring awareness to a cause and bolster their social responsibility.
The idea is to develop policies that reflect an increased commitment to your impact on society while boosting your brand’s image. Using cause-related marketing to garner a positive social impact allows your e-commerce build your business, create brand awareness, attract consumers and generate sales while driving awareness and donations to a worthy cause.
Why is social impact important to your e-commerce business?
Social impact serves as a platform for e-commerce businesses and consumers to work together to make a difference in communities, on both a local and global scale.
Data is now suggesting that the number of consumers making purchasing decisions based on the causes they care about is on the rise and people are now more likely to start shopping at companies who support issues they agree with. In fact, Millennial and Gen Z consumers are now actively seeking out e-commerce brands and causes that align with their values as 79% of consumers say they feel a deeper personal connection to companies with values similar to their own.
Social impact is important to your e-commerce business because it proves your commitment to your customers, shows you’re aligned with them and that you actively support the things they care about.
- 87% of Millennials and 94% percent of Gen Z expect companies to address social and environmental issues.
- 75% of consumers conduct their own research to verify whether a brand is being honest and actually backing up their statements through their actions.
- 64% of US adults say a company's primary purpose should be "making the world a better place".
- 71% of consumers are willing to pay more for products from brands that show they support a positive social or environmental cause.
- 92% of consumers take their friends’ and family advice when it comes to choosing a brand to do business with.
- 78% of consumers tell others to buy products from a business with a socially-driven mission.
- 81% of consumers believe companies should help improve the environment.
Your social impact not only allows you to reach your and build stronger connections with your consumers, but brand loyalty and customer retention can also be increased if you are making a positive social impact that’s consistent with your principles. Remember to be transparent about your social impact goals in order to maintain trust with those who matter most to your e-commerce business.
When determining social impact goals, it’s important to consider your e-commerce brand’s mission and vision statements so you can align your social impact goals with your fundamental values. To help with this, many e-commerce businesses are now building entire teams, called corporate social responsibility (CSR) teams, within their organizations to create, and execute, their social impact mission.
Investopedia claims that businesses who implement CSR strategies are ‘conscious of the kind of impact they are having on all aspects of society, including economic, social, and environmental’. By aligning the central components of your e-commerce business with your social impact goals, you are making a promise to improve society while also promoting a positive brand image of your e-commerce brand.
The importance of creating a positive social impact doesn’t stop with consumers, either. In terms of your employees,
one study found that globally:
one study found that globally:
- 64% of Millennials consider a company’s social and environmental commitments when deciding where they want to work.
- 64% won’t take a job with a company that doesn’t have strong CSR values.
- 83% are more loyal to companies that help them contribute to social and environmental issues.
- 88% say their job is more fulfilling when they are given the opportunity to make a positive impact on social and environmental issues.
The bottom line here is that your e-commerce brand’s social impact matters. In fact, it matters a lot. As online purchases continue to rise and this new way of business becomes an increasingly integral part of our society, the first dimension of a sustainable e-commerce business is its ability to align with its target audience’s values.
Now more than ever, e-commerce businesses are using their platforms to build strong brand images and connect with their target audience on a deeper level by shifting the social impact of their brands to the forefront of their efforts – and adQuadrant can show you how.
To build trust with your consumers and employees, enact real change and make a difference in the world, you need to consider your social impact and follow through on your promises. Not only will you build stronger connections with your employees, but it will also allow you to connect with potential and existing consumers who share similar values, build a brand you’re proud of and generate sales – all while making the world a better place!