Welcome to the Values Economy: Why Brands Can’t Afford to Stay Put Post-COVID-19
Well before the COVID-19 crisis began, a shift was taking place in consumerism, away from the value economy we've grown up with — where price over quality was the standard formula for how customers evaluated what constituted good value for money — toward a more complex set of considerations, toward a values economy. Who made the product and under what conditions? What values does the brand have and do they align with mine? What good if any will come of my purchase beyond the transaction? How much damage (to society, to the environment) might my purchase cause?
While to some these questions may sound altruistic and wishful — that consumerism might unreasonably be expected to take a more active role in bettering the world beyond contributing to economic activity and enabling jobs — the drumbeat of change has been steady and getting louder. The COVID-19 crisis is now bringing it to a thundering crescendo.
Think of it in your own life and experience. Do you recall the Dove Real Beauty campaign and how remarkable that was at the time? Here was a mainstream packaged goods brand choosing not to position itself on features and benefits, as it had done for decades. It was conveying to consumers that it was worth the extra price above typical bar soap because it's “gentle enough for a woman’s face." Dove chose to actively engage and support an emerging and controversial social issue: body image and the negative impact to those considered offside of what society considered to be ideal. While the brand was hugely successful previously, it’s bold and genuine stand took it to stratospheric heights in terms of brand affinity and sales growth.
If the Dove example sounds like a one-off, consider its counterpoint: Victoria’s Secret, and the enormous media and consumer backlash it has received as its practices were increasingly perceived as tone deaf in a "me too" era. Could this be correlated to its steady decline as a business? Hard to make that case empirically, but surely it didn’t help.
Consider the spectacular early growth of TOMS Shoes and Warby Parker, both built on an explicit "give back" model of donating product to those in need (of shoes and eyeglasses, respectively) with every purchase. Consider the "do right for the environment" ethos of Patagonia, and how a niche brand became mainstream and a badge for those who value ethical practices. Think about why Chipotle exploded onto the scene and rose to prominence and scale in record time. Was it simply a delicious offering made available in accessible locations, or was it also about the resonance of its "clean food" ethos and practices?
Now, before you say these are well-worn examples trotted out when so-called experts want you to believe consumers are making purchase decisions differently today, while the evidence suggests most companies do little beyond their relatively lightweight corporate social responsibility (CSR) initiatives, consider Nike and its most recent Colin Kaepernick campaign. It started with a tweet on Sept. 3, 2018: “Believe in something, even if it means sacrificing everything. #justdoit.” With that began one of the most remarkable stands taken in modern marketing history. Here was an institution within the sports ecosystem calling out and openly defying its practices.
As Fast Company said in its analysis a year later, “People loved it. People hated it. People bought Nikes. People burned Nikes.” In the end, the company reported a 31 percent lift in sales and a $6 billion increase in brand value. As Phil Knight himself said afterward, “It doesn’t matter how many people hate your brand, as long as enough people love it.” Was it a calculated risk? Almost certainly. Was it true to what the brand believes? It continues to be debated, but the main point, as the article goes on to say, is that “… brands that don’t back up their purpose-filled advertising with actual action risk getting significantly burned.”
Nike certainly isn’t perfect (Allyson Felix and its pregnancy policy comes to mind), yet at the time it came across as genuine and further raised awareness of a real issue. Lacking as it may have been in follow-through, yet another brand took yet another step toward promoting and selling values over value (the Kaepernick ad that ran didn't feature an athletic shoe or speak to product features and benefits), moving closer to what Anne Field so eloquently termed the “not only for profit” companies that can be expected to take the field as the values economy takes hold. As a recent study by the global PR firm Edelman revealed, nearly half of all consumers believe that brands have better ideas for solving our country’s problems than government.
Consider the facts, now in the context of COVID-19 and inclusive of a proprietary research study my company conducted with 5,000-plus consumers across North America. We asked consumers about how their attitudes and values had shifted in response to the pandemic, and whether they thought that shift was temporary or permanent. Here’s what we found:
- 55 percent of consumers said they would forever be more likely to hold organizations accountable for their actions;
- 54 percent said they now believed they needed to be self-sufficient and prepared for anything;
- 51 percent felt a permanent increase in their sense of responsibility for others;
- 49 percent said they would try harder to set a good example for others going forward;
- 39 percent said they were more likely to consider being charitable a natural and essential part of life;
- 38 percent are permanently more likely to believe their choices make a difference in the world; and
- respondents were 1.5x more likely to say they had an increased trust in small, local stores and companies than larger national brands.
The shift from a value economy toward a values economy, where consumers consider social benefits of one kind or another when making their purchase decisions — beyond the traditional considerations of price, quality and access — began well before the arrival of COVID-19. Now it's clearly showing up with more force and in profound ways, such as:
- how we as citizen consumers relate with and treat others;
- how we value our communities;
- how we think about self-sufficiency and preparedness;
- how we think about and prioritize local over other options;
- how we contribute to society and rally around causes; and
- how we think about the future.
It's through a values economy lens that retailers and brands will be judged. What may have been OK before the crisis, and what's considered acceptable as we prepare to move forward from it, are different. The not-only-for-profit businesses that genuinely lead with intention and purpose, pitch in and make a real difference in the lives of customers beyond the transaction, these companies will be rewarded and lauded. Those doing nothing or little — or worse, those caught taking advantage of a crisis while pretending to do and be more — will face a merciless backlash.
No doubt there will be winners and losers through this. Companies that can identify what consumer shifts are going to stick and then prepare for them are the ones that will thrive. The evidence suggests that those that are expert and efficient at what they do AND take actions that meaningfully demonstrate their true purpose and values will ultimately come out of this stronger. Now is the moment to ask the most fundamental questions to refresh your strategy, boldly re-imagine your business, and prepare for the world of opportunity that will come post-crisis.
Joe Jackman is the CEO of Jackman Reinvents, the world’s first and foremost reinvention company and author of "The Reinventionist Mindset: Learning to love change and the human how of doing it brilliantly."
Joe Jackman is the CEO of Jackman Reinvents, the world’s first and foremost reinvention company and author of The Reinventionist Mindset: Learning to love change and the human how of doing it brilliantly. Throughout his 30+ career as strategist, creative director, marketer, and Reinventionist, he has helped companies create the most powerful and relevant versions of their brands and businesses in record time; he is widely considered to be the leading expert on rapid reinvention. To learn more, visit www.joejackman.com and connect with Joe Jackman on LinkedIn and Instagram.