Transforming a complex supply chain to be more sustainable can seem daunting and
even unnecessary to some businesses.
COVID-19, which has
led to a significant increase in e-commerce activity, has added even another
layer of supply chain complexity that executives must grapple with while
considering how to change consumer
habits.
But as people begin to shift from a “me” to “we” mindset — brought into stark
relief by the pandemic — organizations must stay relevant by designing
with all life in mind.
As designers, we must embrace a broader, more holistic,
systems mindset — with particular attention to a growing trend
that the pandemic has unearthed, called "caremongering" — a new word
for looking after your extended community, beyond your immediate neighbors. Ultimately, what is good for
the planet and communities is also good for brands, as consumers continue to invest in brands that honor their
values.
At Fjord, we call this trend “life-centered
design,”
which we highlighted in our annual Fjord Trends
Report. We understand how this fundamental change
in perspective benefits the environment, enhances consumer satisfaction and
impacts brands’ bottom lines. Designing for two sets of values — personal and
collective — is critical. COVID-19 only accelerated an increasing shift from
“me” to “we.” At Fjord, we believe those designing for all life in an
ever-complex world — with their long-term impact on the planet and society top
of mind — will thrive now and in the decade ahead.
Whether it’s CEOs
declaring
the need to redefine capitalism and eliminate shareholder primacy, the drastic
shift in how we act in a post-COVID
world,
or even the climate
movement
sparked by Greta Thunberg, there is a re-examination of fundamentals
regarding the place and purpose of governments, businesses and individuals in
society. We anticipate that many people — enabled by social media — will
continue to exert pressure on organizations to redefine their success in ways
other than financial growth.
Consumers increasingly savvy about sustainability claims
Join us to hear insights from brands including Applegate on marketing lessons from consumer response to sustainability claims on CPG packaging, at SB'24 San Diego — October 14-17.
Our focus has shifted to what’s in it for the customer and their collective
cause across the political spectrum — a shift we’re seeing across industries; a
recent Accenture Strategy
study
found that 94 percent of CEOs believe that sustainable and/or a desirable
products or services also make business sense. For example, US skincare and
cosmetic business Beautycounter published “The Never
List,” highlighting the toxic
ingredients eliminated from its products. And French food giant
Danone launched Manifesto
Ventures,
which partners with a community of disruptive entrepreneurs focused on creating
a healthy and sustainable food future.
Purpose-driven organizations
Additionally, during this unprecedented pandemic, consumers are watching to see
how brands are contributing to societal, economic and environmental progress.
Regardless of size, businesses are quickly realizing the importance of investing
in purposeful strategies that prioritize sustainability and give back to the
environment, as these topics are top of mind for consumers when they make
purchases. Simultaneously, shareholders are demanding environmental, social and
corporate governance as it drives growth, market share and profitability.
Despite pockets of progress and innovation since the Sustainable Development
Goals
were agreed to in 2015, socioeconomic, geopolitical and technological
uncertainties over the past four years have significantly distracted CEOs’
sustainability efforts. But investors, customers and employees continue to urge
organizations to reconsider their view of the world.
The pandemic has forced CEOs to demonstrate their commitment to purpose-driven
business through relief
efforts,
including how they treat employees and whether their business is able to realign
priorities to meet public health needs. At the onset of the pandemic, companies
such as Pernod Ricard, LVMH and BASF were prime examples of this
mindset — and among the many companies to swiftly pivot to producing vital
products
such as hand sanitizer.
Today, stakeholders beyond just investors are demanding their employers be more
purposeful and ethical. And many large organizations are listening. In September
2019, the Financial Times introduced "The New
Agenda," stating: “The
long-term health of free enterprise capitalism will depend on delivering profit
with purpose”. Soon after, BlackRock — the world’s largest asset management
firm — confirmed a global
partnership
with the Ellen MacArthur Foundation to launch its first circular economy
fund.
This demonstrates how a growing number of business decisions are placing a
strong emphasis on purpose, not just profit.
Growing social consciousness
Now, consumers’ spending habits are based off their interests, beliefs and
personal values. Given the variety of ethical brands in the marketplace,
companies that fail to adapt to this new standard will be left behind. Many
consumers walk away when disappointed by a brand’s words or actions on a social
issue — but the ones that have acted, for example, to authentically address
racial
injustice
in the weeks since the murder of George Floyd are likely to see renewed
customer loyalty.
Not surprisingly, socially conscious millennials believe that corporate social
responsibility is the key to alleviating poverty and improving overall quality
of life. In fact, 79
percent
of millennial employees are loyal to companies that care about their impact on
society. Patagonia has publicly stated it is in business to save the
planet.
The company has always been a leader in corporate social responsibility trends
and is in a unique position to link its business goals with environmental ones.
We are witnessing this across industries. Recent
data
confirms that consumers frequently consider a corporation’s values and
commitment to social and environmental sustainability when choosing brands and
products. Food giant Sodexo, for example, factors in its progress in
reducing food
waste
when calculating success. We are anticipating a watershed moment when the cost
of a product or service is redefined to incorporate sustainability factors, as
well as the financial cost of generating it.
The sustainable products market
It’s impossible for retailers and brands to ignore the rising popularity of
sustainable products from a market perspective. The argument that natural
resources are finite and the planet cannot support limitless growth is
compelling. To be clear, this is not a question of sustainability versus profit,
but an essential strategy to staying in business.
The sustainable products market is growing exponentially and is estimated to hit
a whopping $150
billion
in sales in the US by 2021. A 2019
study
from NYU Stern’s Center for Sustainable Business found that 50 percent of
consumer packaged goods growth from 2013 to 2018 originated from sustainability
products. And while resources become increasingly scarce in the physical world,
those in the digital world are limitless — so long as we have the renewable
energy
to power them.
Looking ahead
As we look ahead to the next decade, we recognize that consumer spending habits
will continue on their trajectory from “me to “we,” which will also be informed
by the legacy of COVID-19. The future sustainable enterprise is dependent upon
how organizations and their leadership teams identify and execute a strategy
serving their self-interest — along with that of their customers and employees.
The “value add” that marketers have sought for decades is changing shape
rapidly, linked to unpredictable but salient forms of
self-actualization.
At Fjord, we feel optimistic about the evolving landscape of purpose-driven
business. As the pandemic has demonstrated, people’s sense of community has been
given a much-needed boost. The swift emergence of “caremongering” is
likely here to stay, and it is imperative for designers and business leaders to
take heed.
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Managing Director
Fjord
Martha Cotton is the Managing Director and Global Lead for Design Research at Fjord/Accenture. Prior to that, Cotton led gravitytank’s research team — helping clients understand their unique situations and clearly see new opportunities for growth. She is broadly recognized for her expertise in ethnographic and observational research, focus groups, user interface development, and data collection and analysis.
Published Jun 26, 2020 8am EDT / 5am PDT / 1pm BST / 2pm CEST