Is there anyone better informed than today’s consumers? Before buying or using a product or service, customers now want to know everything about it, and use every available channel to find that information, from careful reading of labels to rankings in the trade press, Internet searches and apps.
Where was my product made? How was it made? Was it made with eco-friendly materials? On the basis of what values? Are the brand's employees happy with their working conditions? Before buying, consumers want to know everything about the product... and the company behind it! Consumers want to be able to measure the impact of the products they buy, understand how they are made, and are no longer prepared to condone corporate misconduct. Well-informed customers also mean more responsible, more virtuous brands.
Customers now have superpowers, because they are all-knowing! 68% of U.S. consumers believe they are better placed today than they were five years ago to make informed purchasing decisions.
The power of the wallet to make things happen
So what's changed in the last five years? Although prolific five years ago, sources of information have grown exponentially thanks to the Internet and apps. Alongside this digital leap, societal and ethical concerns have become major issues for consumers and businesses alike. Metrics that are easily understood and identified are now available on consumer product packaging. In Europe, Nutri-score rating of the food product nutritional qualities has become an integral part of consumer behavior since its introduction in 2016. Its impact on sales is clear: sales of top-rated products (A and B) are rising, while overall sales of products rated C, D and E are declining: a clear demonstration of the power of the wallet to make things happen.
As they continue to become simpler and easier for customers to access, metrics are becoming essential for all product ranges. Car buyers have known for many years how to interpret the fuel consumption, CO2 emissions and other figures quoted in advertising. The larger the purchase - like a new vehicle - the more customers will inform themselves...or even over-inform themselves!
Beware of information overload
Consumers are continually looking for more information and greater transparency. Labels are carefully read, but not always well understood as the volume of information grows with labels, eco-labels and a battery of indicators... Beware of information overload! Customers definitely want to be informed, but what people want most of all is to be well informed. In response to this growing demand for information, brands have an additional duty of simplicity, clarity and education.
Information is transparency, and that can have considerable consequences. Many apps designed to encourage more responsible consumption have been launched around the world, including Yuka (food), ThinkDirty (cosmetics), the EWG Healthy Living App and GoodGuide. The principle behind it is that users scan products via their smartphones to find out everything about their composition, ethical values and/or durability. The influence of these apps is growing all the time, and many manufacturers have improved some of their products to achieve higher ratings. The superpowers of customers!
Some apps now adopt a more global approach. Moralscore allows users to rate not only products, but also the ethical status of the companies that manufacture them, using a battery of indicators: respect for the environment, transparency, employee pay, tax contribution, use of personal data, etc.
From public to business
The development of tools that make it easier for end customers to choose between consumer products has its counterpart for products that are less everyday and are targeted at business users, from small-scale traders to major industrial companies.
EDPs (Environmental Product Declarations) provide standardized and certified environmental information based on the full life cycle analysis of construction materials. This information is available via public databases like the INIES in France, and its international counterpart EPD International. The number of EPDs in the INIES database has been increasing steadily since 2011, and jumped by 30% between 2018 and 2019. (source)
Transparency is a non-negotiable condition for transitioning to a sustainable business model. Professor Knut Haanaes of the IMD Business School believes that: “You can't judge improvement in business practices without transparency: it's as simple as that. The only way for companies to achieve transparency is to communicate openly with all their stakeholders by ensuring a high level of disclosure, clarity and accuracy of information” (source). More transparent companies, and customers who are becoming better informed all the time: it’s a virtuous circle.
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