Call it a Tupperware party for the green and tidy. On any given night in Canada, you’ll find people passing brightly coloured mops and rags around their living rooms as a rep from ENJO Cleaning Canada Inc. explains what makes these products so great: they sanitize surfaces without the use of chemicals, help reduce landfill-destined waste and are manufactured under ethical working conditions.
More often than not, the pitch is successful. So much so that ENJO Canada achieved record-breaking sales in three of the past six months, even after the Mississauga, Ont.-based firm registered revenue growth of almost 1,500% over the previous five years.
Why is business continuing to boom? “The health factor is huge among buyers,” says ENJO Canada president Trish Ronan, “but it’s also about what the product allows them to do for the environment and their immediate community.” And, Ronan acknowledges, the expressive benefit is equally important: make an ethical or environmentally conscious purchase, and you can tell yourself—and the people around you—that you’re a good person.
If you can satisfy such “higher order” human needs as status and a life with purpose, your business—like ENJO Canada—will be armed with a potent value proposition in 2012 and beyond.
Although plenty of research suggests that buyers have grown weary of effusive and unfounded claims of environmental or social virtue, such “compassion fatigue” applies only to disingenuous marketing. When consumers find a brand they believe walks the talk, they will put the weight of their wallets behind it. “If a company is sincerely, thoroughly and thoughtfully engaged in initiatives that are really integral to its values and those of its customers, it can be hugely significant,” says Eileen Fischer, a professor of marketing and entrepreneurial studies at the Schulich School of Business in Toronto.
“Conscious consumers” have formed a vocal but small part of the consumer market for years. Not anymore. Thanks to the educational and connective power of the web, their ranks have grown quickly, with some estimates pegging their numbers at almost half of consumers. “We’re seeing more people really paying attention to the social or environmental harm that might arise as a result of their purchases,” says Michael Mulvey, assistant professor of marketing at the Telfer School of Management in Ottawa.
In a recent survey conducted by Toronto-based social-values research firm Environics/Lipkin, the need among Canadians to find meaning in their lives indexed at 154, against a base of 100 in 2009—a 54% increase over two years. The desire to demonstrate social responsibility and contribute to one’s community has increased by 49% in the same period. And a longing to improve one’s health and vitality is up by 40%. “More than in the past, today’s consumers want to be sustainable, both in terms of the environment and their own personal wellness,” says Mike Lipkin, president of Environics/Lipkin. “And they want to connect with others while they’re doing it.”
The result is a population for which purchasing decisions are not only a means of self-fulfilment but also a tool for achieving an exalted moral status—or, at least, avoiding social stigma. “People today don’t want to be the one who’s set apart for not doing something good,” says Telfer’s Mulvey. “They want to be seen as a virtuous consumer.” So, for many consumers, a stroll down the retail aisle is the first stage of an exercise in “conspicuous responsibility.”
This trend threatens any consumer goods or services company that doesn’t match the expectations of virtuous buyers, whether the failure is in the product itself or in the marketing of it. The good news, according to Lipkin, is that the idealistic consumer is interested in a vast array of products and services, so long as they give buyers the warm fuzzies about what they’re doing and allow them to share their moral choice with their like-minded peers. This translates especially into increasing demand for group-oriented services that allow people to make a difference—think: volunteer vacations and organic-gardening lessons.
It also means that consumers are more likely to support companies whose values align with theirs, regardless of what’s for sale. Consider the case of Port Coquitlam, B.C.-based fertilizer manufacturer Technaflora Plant Products Ltd. President and general manager Jason Goodman has judiciously chosen to support causes that reflect both the firm’s values and those of its customers. These include hunger-related charities and agricultural not-for-profits that benefit from the hydroponic nutrients the company provides. More and more, Goodman says, customers are asking about this work; he now considers Technaflora’s philanthropic footprint to be a competitive differentiator: “It affects a client’s decision to buy from us to a great extent.”
Of course, the purpose-driven consumer won’t always recognize a firm’s philanthropic efforts by paying more for a product. At Technaflora, giving back is more a means of boosting market share than boosting margins.
But shoppers often will shell out more when they believe their choice will confer a certain status upon them. Lipkin offers two successful Canadian companies as examples: Toronto-based Canada Goose Inc., which is well known for its made-in-Canada manufacturing practices; and Vancouver’s Lululemon Athletica Inc., which is associated with wellness and sustainability. Both are premium brands that stand for social causes; both serve as status symbols for the purchaser.
Invermere, B.C.-based Kicking Horse Coffee Co. Ltd. is another firm tapping into the “club” mindset. An integral part of the company’s brand since its inception 15 years ago is its status as a purveyor of Fair Trade and organic products, for which it charges a premium. The company’s devotees are as fervent as they are loyal; for instance, its Facebook page is full of enthusiastic testimonials from customers keen to broadcast publicly their love of the brand.
Kicking Horse CEO Elana Rosenfeld says her client base has grow noticeably in recent years, and she expects the trend to continue as idealistic Gen Y consumers gain greater buying power.
“More and more customers tell us they feel good about what they’re buying,” she says. “And that creates a deep connection with our brand.”