Consumers News round up Jan 2004

January 01, 2004

Ethical shoppers

UK consumers spent £6.9bn on ethical goods and services during 2002, according to The Co-operative Bank’sEthical purchasing index. Published on December 8, the index aims to capture purchasing decisions made on the basis of a consumer’s ‘ethical’ principles, such as support for human rights, the environment and animal welfare. Examples of such ethical consumption include choosing to buy products that can be re-used and shopping to support the local community. Headline findings from the index include:

  • banking is the largest growth area of ethical consumption, with the market share increasing by nearly a fifth to £3.9bn,
  • more than half (52%) of people have avoided at least one product for ethical reasons, costing big brands £2.6bn last year,
  • the total market share of ethical goods and services remains less than 2%.

Contact Carolyn Hicks, The Co-operative Bank, on 0161 829 4252 (http://www.co-operativebank.co.uk)

How to raise funds and influence people

Awareness of cause-related marketing programmes is growing, according to new research from Business in the Community and Research International. The brand benefits 2003 study, published on Novermber 4, reveals that:

  • eight in ten consumers (83%) say they have participated in at least one CRM programme over the last year, compared to 68% in 2000;
  • half (48%) also say they have actually switched brands, increased usage or tried new products as a result of such campaigns;
  • the proportion of consumers attributing more positive feelings to a company as a result of a CRM initiative rose from 31% in 2000 to 50% in 2003.

A separate BitC survey released on October 30, entitled Giving now 2003, finds that lack of time and money are the most common reasons for not giving more to charity. It also reveals that CRM offers ‘time poor’ consumers the opportunity to support a good cause. Among the report’s other findings is the fact that women are more likely to give to charity (90% compared to 83% of men in the last year) – a gender difference mirrored by women’s greater awareness in the CRM study. Contact Laura Small, BITC, on 020 7566 8796 (http://www.bitc.org.uk)

Rewarding the faithful

EDF Energy is bucking the trend among other companies involved in the Nectar reward scheme by seeking to promote customer loyalty over and above consumption. The French-owned utility is using the scheme to reward users of its electricity and gas services according to how long they stay with the company. The initiative complements the company’s existing Green tariffs programme, which was introduced in 2001 to provide its customers with the opportunity of supporting investment in renewable energy projects. Contact Richard Robinson, EDF Energy, on 020 7752 2266 (http://www.e-energy.com/nectar)

in brief

Sales of organic food in the UK have topped £1bn for the first time, according to a report by the Soil Association published on November 5. Demand for organic products is growing by more than 10% a year, with sales of organic baby food increasing by a fifth since last year. Contact Sue Flook, Soil Association, on 0117 914 2448 (http://www.soilassociation.org)

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Editorial Comment

Studies of CRM suffer from the Mandy Rice Davis put-down “Well they would say that, wouldn’t they?” – a human tendency to overstate one’s virtues. What’s significant here is the clear and very believable upward trend in awareness and participation. Also significant is the hard evidence cited from case studies of individual campaigns, such as Persil’s 13% sales uplift during Comic Relief compared to the previous 12 weeks, with 1% continuing after.

For companies with consumer brands, thanks to BitC’s excellent series of studies, the weight of evidence is now so overwhelming that only the most perverse marketing director can deny the opportunities. Charities with a suitable cause are also benefiting greatly. Less clear is the impact of consumer purchasing power on making the world a better place.

Here The Co-operative Bank’s annual Ethical Consumerism Report (as we report opposite) shows a positive trend but from a very small base – with the market share for ethical goods and services still less than 2%. Possibly more powerful are boycotts, the flipside to CRM: half of consumers (52%) say they have switched away from at least one product in the last 12 months for ethical reasons (though Mandy Rice Davis would be rightly sceptical of the size of that claim too).

Corporate Citizenship Briefing, issue no: 73 – January, 2004

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