Special Guests: Adam Chandler; Editor at DTC Magazine, Mandy Lozano; Chief Strategy & Marketing Officer at MiiR, Amanda Baudier; Vice President of Business Development at Sakara, Jasmin Singer; Vice President of Editorial at Kinder Beauty, and Aaron LaMonica-Weier; Senior Manager of Digital Platforms at Feeding America
On this episode of the Impact Exchange, we were joined by a panel of thought-leaders to discuss how the relationships between brands, nonprofits, and consumers shifted in 2020 and why more DTC brands are going to be turning to social impact this year. Panelists from MiiR, Sakara, Kinder Beauty, and Feeding America shared social impact trends that they’ve seen with their brands and discussed their predictions for 2021.
The Covid Effect on Buyer Behavior
The Covid-19 pandemic caused shifts in the lives of everyone, and the retail industry was not immune to these unprecedented changes. As businesses closed their storefronts and consumers flocked to ecommerce experiences, many brands struggled to stay afloat while direct-to-consumer and digitally native brands were at a slight advantage.
Even so, with many people suddenly facing unemployment, consumers were much more mindful of how and where they spent each dollar. This consciousness around each dollar spent brought social impact to the forefront of retail. Consumers wanted to make the most of their purchasing experience and stretch their dollars by supporting brands who were actively providing aid during the pandemic.
Appealing to Consumers in a Pandemic
This shift in buyer behavior forced brands to re-evaluate their social impact efforts. With 60% of American consumers wanting businesses to be vocal about societal issues, it quickly became clear that purpose-driven brands were being favored by consumers and other brands were scrambling to get social impact initiatives in place. The way that brands previously engaged and connected with consumers needed to change.
Kinder Beauty, a beauty subscription box, found that their customers wanted more than just a beauty box. When the pandemic hit, Kinder Beauty turned away from growth strategies and began focusing on retention instead. By tuning in to their core values, Kinder Beauty was able to bring social impact to the front of their business, and ended up growing 300% in 2020 as a result.
“When it became clear that Covid was going to be this big, awful thing, our immediate response was to focus on retention and profitability over growth. And a big part of this strategy was to focus on the cause component of Kinder Beauty” - Jasmin Singer, Vice President of Editorial at Kinder Beauty
Sakara also saw a change in consumer needs. Pre-covid, Sakara focused on promoting their products as something that provided natural beauty and glow, but once the pandemic hit, consumers became less attuned to these types of products. Sakara shifted to promoting their products as offering immune system support and even began donating meals to frontline workers to show their support.
Having a natural extension from your brand to social impact is key. Consumers want to see authenticity in your impact efforts and they want to hear a story about why you advocate for a cause. As a nutrition and meal delivery service, Sakara’s decision to donate meals to frontline workers during the pandemic was not only perfectly aligned with their brand, but engaged their customers as well knowing that by shopping for their own meals, they were helping to support frontline workers.
Value-Alignment as a Differentiator
As more consumers shifted their buying habits online during the pandemic, the noise within eCommerce became louder. Suddenly, there was more competition amongst digitally native brands and 36% of consumers actually switched brands during this time, even despite previous customer loyalty. Once the social justice protests of 2020 began, consumers became even more adamant about supporting brands who advocated for these social issues and began making the switch to brands whose values aligned with their own.
MiiR, a premium drinkware company, exists to empower people for a better future. Once the Covid-19 pandemic struck, the MiiR team asked themselves, “what does empowering people for a better future look like in 2020?”. With schools shutting down and forcing students to begin remote learning, many students from food insecure homes no longer had access to meals. Partnering with local artist, Kyler Martz, MiiR created the Alone Together mug and donated $5 from each purchase of the mug towards Feeding America to help provide meals to students and families living in food insecure environments.
“When people were going into lockdown and children were no longer going to school, with so many food insecure households we realized that school is the only opportunity for many children to get a good meal, and we decided that we needed to do something about it.” - Mandy Lozano, Chief Strategy & Marketing Officer at MiiR
For Feeding America, the influx of support for their organization during the pandemic was astounding. “Hunger used to be an issue that people thought of internationally, and not as much here in America. 2020 really changed that”. With the pandemic, more consumers and brands were stepping up to support their local communities and provide aid where they were seeing the need firsthand. 83% of Millennials believe that it’s important for the companies that they buy from to align with their beliefs and values, and by supporting the causes that matter most to their customers, brands can create more authentic, engaging interactions with these customers. This in turn, can lead to newfound loyalty.
The New Era of Customer Loyalty
With the growing population of conscious consumers, customer loyalty is up for grabs. Consumers are continuously demonstrating their commitment to supporting brands who are doing more in regards to social impact and are ditching those brands whose values don’t align with their own. With these consumer shifts, direct-to-consumer brands were able to better adapt to the challenges from the pandemic compared to other brands. These DTC and digitally-native brands were able to better reach their target audience through authentic personalization to gain a deeper understanding of what matters most to their customers— an ability that giant retailers don’t have.
Consumers are wanting to see the people behind the brand and have an understanding of a brand’s core values and mission. Kinder Beauty was able to use their position as a DTC brand to put a face and voice to what they believe in and share this with their customers in a more personal and authentic way.
The Future of Social Impact
In 2021 and beyond, more retailers are going to be looking at social impact from four core pillars— team, customer, community, and product. As consumers become more critical of a brand’s impact on society, more brands are going to be taking a 360 approach to social impact and integrating it throughout their brand’s DNA. Currently, social impact strategies are most common with DTC brands, but legacy brands will soon follow suit.
Communicating transparently with consumers will become more commonplace as well. Consumers are already taking the time to get to know a brand’s impact initiatives on a deeper level, and vague statements like “We use recycled materials” or “We donate a portion of proceeds” will no longer be sufficient. Consumers are demanding depth and transparency from the brands that they choose to support, and Feeding America has seen that consumers want proof of the good that is being done. Consumers are increasingly holding brands accountable, which means that brands need to hold themselves to a higher standard to do better.
As social impact continues to grow, the intersection between it and technology will grow as well. Social impact is no longer a nice-to-have, it’s a need-to-have. As consumers hold brands to a higher standard, more brands will turn to technology solutions to help them integrate social impact throughout their brand so they can ensure that their initiatives are seamless, simple, and effective.
While social impact is quickly becoming a differentiating factor between brands, it’s important to remember that transparency and authenticity will win every time. Making a statement on societal issues just because it’s expected is inauthentic and can be worse than saying nothing at all. Consumers are seeking value-alignment and brands should be true to their values in who they are and what they believe in.
If you’d like to gain more data and insights into the rise of conscious consumption and purpose-driven brands, the pressure for value-alignment from consumers, and trends on the future of social impact for commerce, you can download the full Direct-to-Consumer Brands and the Social Impact Loyalty Effect report.
Listen to the podcast to learn more about our thought-leader’s perspective on the following:
- How brands are shifting to meet the demands of conscious consumers
- How social impact is playing a role in customer loyalty
- Where the future of social impact is headed for DTC brands
We hope you enjoy this episode of The Impact Exchange, until next time...stay healthy, stay mindful, and create impact.
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