News & Analysis

Gen X and Y switching to socially-conscious businesses

- April 1, 2014 3 MIN READ

According to a new study conducted by Di Marzio Research, Gen X and Y are increasingly switching over to socially conscious brands with the same offering – pointing to a ‘conscious consumerism’ trend and proving social responsibility to be a unique selling point.

A report titled ‘Switching Brands for a Cause’ commissioned by Cavill + Co – a company that creates partnerships between companies and charities – suggests that more than 3 million Australians switched from their normal product or service to another brand last year because the alternative brand supported a cause or charity.

Gen X and Gen Y – spanning from 20 to 49 in age – are leading the way with almost one in five (19 percent) changing brands to support a charity. These two groups combined represent 11 million Australians – half the nation’s population. 

Of all ages, incomes and family circumstances, one in six (16 percent) were found to have switched for a cause. 

In a recent media release, Hailey Cavill, social entrepreneur and Director of Cavill + Co, said the findings were encouraging for any marketer seeking to attract today’s socially conscious consumers: “The potential to win over even 10 percent of consumers would be good news, and our research shows partnering with a charity can almost double this”.

“A properly set up charity partnership is an absolute winner in today’s fiercely competitive retail environment. By comparison, advertising is often unreliable, brand differentiation can be short-lived, and social media can be frighteningly risky.”

Cavill adds that the right charity partnership has far-reaching benefits beyond retail sales.

“There is a strong business case for adopting a charity and then leveraging the partnership. It motivates staff and builds pride, differentiates your brand, builds trust, enhances your corporate reputation, provides emotive content for social media – but the conquest sales alone would justify the strategy,” she said.

“Any marketer trying to woo the cashed up Gen Y or the discerning Gen X consumer should consider partnering with a relevant charity and promoting this at the point of purchase. These groups care about the social implications of their purchases, and this research shows that they are flexing their altruistic muscle at the checkout.”

Cavill + Co’s research identifies Gen Y (age 20-34) as fickle consumers who have high levels of disposable income, like going out, love shopping (gadgets, clothing and takeaway food) and are concerned about social and environmental issues.

Gen X (35-49) comprises prudent purchasers, spending big on luxury items including fragrances, cosmetics, beauty products, fashion and alcohol, entertainment and health services.

Other results show that consumers in NSW were more likely to switch (21 percent) than those in traditionally philanthropic Victoria and home of leading social entrepreneurs like Daniel Flynn (10 percent). Blue collar workers more likely (18 percent) than retirees (10 percent); and singles more likely (21 percent) than couples (16 percent), those with children (15 percent) or empty nesters (12 percent).

Cavill said these figures are compelling for marketers weighing up the merits of supporting a charity and promoting that charity on product packaging or advertising.

“The question that matters is whether enough people will switch to your brand to justify what you invest in the charity, pack change or POS material, and leverage costs. The answer is clearly yes,” she said.

“But too many marketers choose the wrong charity or focus on the wrong message at the point of purchase – or fail to support the partnership with additional promotion. Getting the right charity and communicating it correctly are critical.”

Research methodology

It is important to point out that the sample size was actually 1,200 adult internet users across Australia’s mainland states and that percentage was used to make a national estimate. The research was conducted online, so it is possible that older generations (who aren’t as savvy with technology than the younger ones) weren’t represented accurately.

The sample is said to resemble the Australian public closely and the respondents were sourced from a online research panel specialist firm, MyOpinions Australia, which has almost 400,000 active and profiled members.

More information is available here.