Purpose and Provenance Drive Bigger Profits for Consumer Goods in 2020

IBM released a study on global consumer trends, revealing the importance of brand purpose surpasses cost and convenience for today's shoppers. The research, developed in partnership with the National Retail Federation (NRF), polled nearly 19,000 consumers from 28 countries, across all demographics and generations.

One-third of all consumers today will stop buying their preferred products if they lose trust in the brand, and one-third of consumers have already stopped purchasing their longtime, favorite brands in 2019. As such, consumers are prioritizing those that are sustainable, transparent and aligned with their core values when making these decisions. They're willing to pay more, and even change their buying habits, for brands that get it right.

At the same time, buying behaviors have changed drastically. Consumers shop whenever and wherever the mood strikes them, usually while doing something else. Whereas impulse buying was once the norm, impulse shopping is the current norm, 7 in 10 consumers now shop in "micro-moments", or shop simultaneously while conducting their daily tasks.

With a proliferation of brands and products at shoppers' disposal anywhere at any time, corporate values now outweigh product costs and convenience. Consumers of all ages and incomes pay much higher premiums for products aligned with their personal beliefs. On average, 70 percent of purpose-driven shoppers pay an added premium of 35 percent more per upfront cost for sustainable purchases, such as recycled or eco-friendly goods.

57 percent of them are even willing to change their purchasing habits to help reduce negative environmental impact. 79 percent of all consumers today state it is important for brands to provide guaranteed authenticity, like certifications, when they're purchasing goods. Within this group, 71 percent are willing to pay an added premium, 37 percent more, for companies offering full transparency and traceability.

"Shoppers today show an increased willingness to pay premiums for products that align with their values. The study's findings show that today's retailers need to be proactive in evaluating and understanding what drives current and future core buyers while still boosting margins for their business," said Mark Mathews, Vice President, Research Development & Industry Analysis, NRF.