BeCause IT MATTERS: Australia

THE CONSCIENTIOUS BEHAVIOR

OF CONSUMERS

IN AUSTRALIA

SEPTEMBER 2014

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“BECAUSE IT MATTERS” COUNTRY REPORTS

Our “BeCause It Matters” reports are based on an insight and a belief, and they are designed to answer a question. Our insight: A worldwide trend toward conscientious consumption is traveling together with a shift toward conscientious capitalism. Our belief: This trend is net positive—good for business, good for consumers, good for the economy and good for general well-being.

As a PR agency, we are focused on communication and messaging, so the question we aim to answer is this: How can conscientious capitalists connect more effectively with conscientious consumers and with people who are likely to become more conscientious?

In these reports, we look at the rise of conscientious consumerism and the local findings of a massive

global online consumer survey commissioned by Havas Media for its Meaningful Brands study. The Havas PR Global Collective commissioned research in an additional two countries, bringing the total sample to 31,000 adults in 22 countries. The Australia part yielded a nationally representative sample of 500 adults age 18 or older, with a male-female split of 50:50.

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Like the rest of the world, people in Australia are still working through the aftershocks of what happened in 2007-08—dubbed the Global Financial Crisis, or GFC, by some influential Australians. Although the country managed to buck the worst of the crisis, it didn’t escape unscathed. The stock market has yet to recover to precrisis levels, and unemployment is around 6 percent of the workforce. What’s more, with a constant feed of global news and an economy dependent on commodity exports, Australians are inevitably affected by the ups and downs in the rest of the world. Australian environmentalist Paul Gilding has mapped out what he calls the Great Disruption in a book of the same name that aims to show “why the climate crisis will bring on the end of shopping and the birth of a new world order.”

Gilding’s notion of disruption is probably not a top-of-mind

experience for most Australians—certainly not when compared with many people in Europe and the United States. For example, despite frequent droughts, bushfires and the 2011 floods in Brisbane, a recent poll of more than 5,000 Australians from the Commonwealth Scientific and Industrial Research Organisation put climate change way down the list of environmental concerns. On the other hand, there are more than enough reasons to suspect that relatively carefree life as usual will not continue indefinitely without some significant changes. Almost half of Australians are worried about their working future in the face of technology and globalization. Inequality is becoming a fact of life for a nation that prides itself on its egalitarian ethos. The country now has one of the highest rates of obesity in the world, which has significant health and budget

DISRUPTION DRIVING THE GROWTH OF CONSCIENTIOUS

CONSUMERISM

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implications. And immigration is becoming a matter of popular concern.

As in other mature market economies, many Australians are concerned with the wider implications of what they buy and how they consume. The notion of “ethical” has expanded way beyond environmental concerns to touch on issues such as fair trade, equal opportunity, social justice, conflict sourcing, tourism and animal welfare.

In Australia, as in many other developed and developing countries, we are seeing the rise of a more conscientious spirit. On the business side it’s conscientious capitalism, which Havas PR has described as not just a different mind-set but also a different heart-set and soul-set. It’s about brands doing what’s right, combining profit and conscience, simply because it is the right thing to do rather than just another clever way to create photo and branding opportunities. Corporations that embrace conscientious capitalism have to walk a fine line between boastfully trumpeting their good work (and

irritating people in the process) and modestly keeping it so quiet that nobody knows about it. It’s essential to get this balance right because the counterpart to conscientious capitalism is conscientious consumerism. For consumers to be conscientious, they need to know what companies and brands are doing, and they have to believe it and respect it.

Today’s conscientiousness among consumers is a new phenomenon, not old-style standard consumer behavior. It’s not business as usual. Conscientious consumers are people going through a process of change. For some the change is deliberate, while for others it’s a gradual shift, going with the tide of changing public sentiment. For whatever reason, they feel concerned about the status quo, they have a sense that they want things to change and they recognize that they can have some influence in changing them. They actively seek information that’s relevant to their areas of concern and they look for—or at least respond to—opportunities to make a change.

The ethical interests and behaviors of conscientious consumers vary widely and aren’t necessarily found all together in the same person. Some consumers might deliberately reduce, reuse and recycle and pay close attention to the packaging of the products they buy, yet pay little attention to animal welfare when they buy meat products. Others might be keen vegetarians but not give a second thought to packaging and waste disposal. Some could be outraged about big corporations paying little tax but feel indifferent to where the corporations source their products. Some might be conscientious one week and not another, depending on what they’ve read or seen recently, or whom they’ve talked to. And a few committed types might try to be conscientious in every dimension of their life all the time: buying food from farmers markets and ethical brands or growing their own; cycling and taking public transport rather than driving; banking with credit unions rather than commercial banks; and seeking out organizations that have impeccable ethical credentials.

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Our survey put conscientious behavior in three time frames. It asked respondents what they had done in the past—specifically, over the past 12 months. It asked what they currently do, in the present, and it asked them about their future behavior and intentions. Looking at the changes across these three time perspectives among Australian respondents, the trend they show is clearly moving toward greater conscientiousness. The statements about the past show between two-fifths and three-fifths of respondents not having engaged in conscientious consumption behavior. This probably reflects the deliberate choice of some (“rejecters”; see below) and a general lack of awareness or motivation among many others. Statements about current behavior show a strong shift in numbers toward more conscientious consumption, with fewer than one-quarter clearly not engaging. The

shift toward conscientiousness is even more pronounced in desired/future behaviors. The following table gives a handy view of this shift by

representing the mean (mathematical average) responses to the nine statements presented to survey respondents.

AUSTRALIA RESEARCH TOPLINES: OVERVIEW SUMMARY AND TARGETING IMPLICATIONS

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Focusing on responses to the three future statements, the following analysis identifies standout characteristics of conscientious rejecters and conscientious potentials. It’s important to understand two key points about these segmentations. First, rejecters and potentials are not mirror images of each other. They are derived from respondents who disagree (rejecters) and respondents who agree (potentials) across the three future-oriented statements. They do not include respondents who neither agreed nor disagreed. Second, the larger the segment, the more it will tend to share the same characteristics as the overall sample. Conversely, the smaller the segment, the more different it will appear to the overall sample.

Rejecters: In crafting communication about conscientious issues, it’s helpful to know who is most likely to reject or ignore messaging. We identified the

likely hard core of rejecters by finding those who disagreed strongly or somewhat with all three future-oriented statements. Specifically, they will not consider the contribution to well-being and sustainability of the brands they buy, would not like to buy brands that let them support issues of well-being and sustainability, and will not be likely to be more loyal to brands that are responsible, ethical and sustainable. Overall, 37 of the 500 Australian respondents, or 7 percent, were rejecters. Compared with the overall sample, they were:

• Far more male: 62 percent (vs. 50 percent of the Australia sample)

• More urban: 92 percent (vs. 85 percent)

• More graduates: 38 percent (vs. 31 percent)

Potentials: We identified the potential accepters of conscientious consumption messages by finding those people who agreed strongly

or somewhat with all three future-oriented statements: They will consider the contribution to well-being and sustainability of the brands they buy, would like to buy brands that let them support issues of well-being and sustainability, and will be likely to be more loyal to brands that are responsible, ethical and sustainable. Overall, 188 Australian respondents were potential accepters, equivalent to 38 percent of respondents. Compared with the overall sample, they were:

• More female: 57 percent (vs. 50 percent of the Australia sample)

• Slightly more single: 32 percent female (vs. 28 percent)

• Slightly fewer married: 39 percent (vs. 44 percent)

• More people with household income under AUD$30,000: 26 percent (vs. 21 percent)

2.66

2.68

2.59

2.34

3.34

3.20

3.36

3.54

3.57

AUSTRALIA: MEAN CONSCIENTIOUSNESS RESPONSES

1 = LOW CONSCIENTIOUSNESS; 5 = HIGH CONSCIENTIOUSNESS

RESULTS AND ANALYSIS

1.00 1.50 2.00 2.50 3.00 3.50 4.00 4.50 5.00

PAST: Avoided poor ethics brands

PAST: Bought more responsible brands over others

PAST: Paid more for better ethics brands

PAST: Looked for information about behavior of companies

PRESENT: Actively buy brands with ethical reputations

PRESENT: Recommend brands that contribute

FUTURE: Will consider brands’ contribution to sustainability

FUTURE: Would like to buy brands that support well-being

FUTURE: Likely to be loyal to ethical brands

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When people self-report past behavior, their answers are liable to several distortions. They might suffer consistency bias, recalling their past attitudes and behaviors as being similar to their present ones, even if they weren’t. They might make things up, not actually remembering but rather imagining what they have done. They could be inclined to report doing things that support their self-image rather than necessarily what they actually did. In the same vein, they might tend to report behavior that’s in line with what is socially acceptable—behavior that their peers would approve of. And they tend to second-guess what they think might be the “right answer” to the question.

In short, people’s recall of past behavior

is typically more impressionistic than factually accurate. Nevertheless, it gives a useful indication of where people think they have come from.

CHECKING UP BEFORE BUYINGThe Internet and social media have made it very easy for anybody with a connection to check for information about pretty much anything. Typically consumers want to know how products and services differ in terms of performance and price. These are common questions and there are plenty of ways to check those things out before buying. But what if they want to find out about a company’s behavior before

buying? Which search terms will find reliable sources of information? Corporate ethics and responsibility is a category of information that is much less straightforward than price and performance, and it’s often much more complicated to evaluate.

Despite the huge availability of information online, more than a quarter (28 percent) of Australian respondents reported that they had never looked for information about the behavior of companies before buying their products or services in the previous 12 months, and the same number had done so rarely. At the other end of the scale, 10 percent had searched often and 4 percent always. The most common response was “sometimes” (30 percent).

LOOKED FOR INFORMATION ABOUT THE BEHAVIOR OF COMPANIES BEFORE BUYING THEIR PRODUCTS OR SERVICES

IN THE PAST 12 MONTHS

AUSTRALIA SURVEY FINDINGS: CONSCIENTIOUS BEHAVIOR

IN THE PAST 12 MONTHS

Never 28%

28%

30%

10%

4%

Rarely

Sometimes

Often

Always

In short: Most Australian consumers have not checked up on the behavior of companies before buying their products. This might be because they didn’t care, or perhaps because they felt they already knew enough.

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FAVORING MORE RESPONSIBLE BRANDSIt’s one thing to gather information about brands; it’s another to act on that information. If a consumer cares about a brand’s behavior, then learning good things or bad things about that brand should influence their behavior toward the brand.

In the previous 12 months, just over two-fifths of Australian respondents had never (17 percent) or rarely ( 24 percent) bought one brand over another because it was more socially responsible. Just 16 percent had done so often and only 5 percent always. By far the most common position was “sometimes” (38 percent). In the language of politics, these are “swing” consumers. They are not totally committed to ethical behavior and they are not staunchly indifferent to it.

BOUGHT ONE BRAND OVER ANOTHER IN THE PAST 12 MONTHS BECAUSE I’M AWARE IT IS MORE SOCIALLY OR

ENVIRONMENTALLY RESPONSIBLE

Never 17%

24%

38%

16%

5%

Rarely

Sometimes

Often

Always

In short: Less than half of Australian consumers have been indifferent, but many have been positively influenced to favor a brand by knowing it is more responsible.

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AVOIDING LESS RESPONSIBLE BRANDS The corollary of favoring more responsible brands is avoiding less responsible brands. This may not necessarily involve a boycott or a flat-out rejection. It may be simply a matter of passing over brands with a patchy reputation. It might involve no more than a second’s thought while choosing between alternative offers.

Across the Australian sample, a hard core of 6 percent had always avoided brands with poor ethics in the previous 12 months and another 16 percent had often done so. More than one-third (35 percent) had avoided them sometimes. This leaves more than two-fifths who had avoided them rarely (24 percent) or never (19 percent).

AVOIDED A BRAND IN THE PAST 12 MONTHS BECAUSE OF ITS POOR SOCIAL OR ENVIRONMENTAL ETHICS

19%

24%

35%

16%

6%

Never

Rarely

Sometimes

Often

Always

In short: Knowing that a brand has a poor reputation for responsibility has influenced well over half of Australian consumers against buying that brand.

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PAYING MORE FOR RESPONSIBLE BRANDS In many of today’s fiercely competitive markets, consumers have come to expect extra features and benefits for little or no extra cost. Hence, the ultimate test of consumers truly valuing a more responsible brand is when they are willing to pay a premium for it over comparable brands.

On this toughest test of conscientious-ness, a little under half of Australians were clearly unwilling to pay more (19 percent never and 28 percent rarely). A small but solid minority was willing to pay more (4 percent always and 14 percent often). Once again, the largest single mind-set was the 36 percent who answered “sometimes.”

IN THE PAST 12 MONTHS, PAID MORE FOR A BRAND THAT HAS BETTER ETHICS THAN OTHER SIMILAR BRANDS

19%

28%

36%

14%

4%

Never

Rarely

Sometimes

Often

AlwaysIn short: More than half of Australian consumers have been willing to pay more for brands with better ethics.

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When people self-report their current behavior, it tends to be more accurate than past behavior. Statements about current behavior are more about people’s general principles of thought and action in the here and now, so they are less vulnerable to memory biases or plain forgetfulness. On the other hand, they might still be skewed by wishful thinking, by what’s socially acceptable and by some respondents second-guessing what they think researchers want to hear.

ACTIVELY BUYING RESPONSIBLE BRANDSMultiple motivations can drive the active buying of brands with a good reputation for responsibility. It might be about the consumer taking a principled stand and systematically identifying and buying responsible

brands. It could be that the consumer has learned about a brand’s credentials and wants to encourage its good behavior. It might be about the consumer wanting to feel virtuous. And it may well be a combination of all these factors and more.

A substantial 47 percent minority of Australian respondents reported

actively buying brands that have a reputation for behaving responsibly and sustainably (10 percent strongly and 37 percent somewhat). A much smaller minority of 18 percent disagreed with actively buying responsible brands—5 percent strongly and 13 percent somewhat. More than one-third (35 percent) were noncommittal.

AUSTRALIA SURVEY FINDINGS: CURRENT BEHAVIOR

I ACTIVELY BUY BRANDS THAT HAVE A REPUTATION FOR BEHAVING RESPONSIBLY AND SUSTAINABLY

5%

13%

37%

10%

Strongly Disagree

Disagree Somewhat

Neither Agree Nor Disagree

Agree Somewhat

Strongly Agree

35%

In short: Compared with their past behavior, more Australian consumers are now actively buying brands with a positive reputation.

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RECOMMENDING RESPONSIBLE BRANDSPurchasing responsible brands doesn’t necessarily need to be a deeply thought-through behavior reflecting a conscientious commitment. It can be as simple as a see-buy response in a store—seeing a brand with ethical credentials, experiencing a moment of good feeling and buying it. By contrast, recommending responsible brands to other people is a stronger behavior. It indicates deeper involvement with the conscientious cause. It’s advocacy.

A solid 39 percent of Australians actively recommend responsible brands: 30 percent somewhat and 9 percent strongly. At the other end of the scale, just under a quarter of Australian respondents are not recommending responsible brands (9 percent strongly not and 14 percent somewhat not). The largest group is the 38 percent who are undecided.

I RECOMMEND FRIENDS/FAMILY/COLLEAGUES BUY FROM COMPANIES OR BRANDS THAT CONTRIBUTE TO WELL-BEING

AND BEHAVE RESPONSIBLY

9%

14%

30%

9%

Strongly Disagree

Disagree Somewhat

Neither Agree Nor Disagree

Agree Somewhat

Strongly Agree

38%

In short: Australian consumers lean toward recommending responsible brands to other people.

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IN THE NEXT YEAR, I WILL CONSIDER THE CONTRIBUTION TO WELL-BEING AND SUSTAINABILITY OF THE BRANDS I BUY MORE

6%

8%

37%

41%

8%

Strongly Disagree

Disagree Somewhat

Neither Agree Nor Disagree

Agree Somewhat

Strongly Agree

People’s notions of what they will do in the future are more an indication of what they aspire to do than what they will actually do. Typically, people talk as if their future self will somehow be more virtuous than their current self; somehow their future self will eat more healthily, exercise more regularly, watch less TV and get more sleep. Marketers are therefore well advised to take any consumer statements about future behavior as wishes rather than commitments, especially when it comes to ethical behavior.

CONSIDERING BRAND CREDENTIALS MORE IN THE FUTURESwitching to a future perspective, the survey gave respondents a chance to think about whether they would pay more attention to the responsibility

credentials of the brands they buy. Specifically, it asked them to rate their agreement about whether they will more often consider brands’ contribution to well-being and sustainability in the next 12 months.

The balance was clearly in favor of being more conscientious in future. A little short of half of Australians

agreed either strongly (8 percent) or somewhat (37 percent) that they would give more consideration to brands’ ethical contributions in future. By contrast, a holdout segment amounting to 14 percent said they would not do so. As on most of the other statements, the most common response was neutral (41 percent).

AUSTRALIA SURVEY FINDINGS: LIKELY, DESIRED AND

FUTURE BEHAVIOR

In short: A strong minority of Australian consumers intend to pay more attention to the responsibility of the brands they buy in the coming year.

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WOULD LIKE TO SUPPORT RESPONSIBLE BRANDSDoing good by shopping is an attractive proposition. Rather than having to give something up or to make a personal sacrifice, the consumer gets the goods and enjoys good feelings of virtuousness from buying them.

Comfortably more than half of Australians agreed they would like to buy brands that let them support well-being and sustainability—12 percent strongly and 46 percent somewhat. A small hard core of 11 percent just weren’t interested, with 5 percent disagreeing strongly and 6 percent disagreeing somewhat.

I’D LIKE TO BUY BRANDS THAT LET ME SUPPORT ISSUES OF WELL-BEING AND SUSTAINABILITY THROUGH MY PURCHASE

5%

6%

46%

31%

12%

Strongly Disagree

Disagree Somewhat

Neither Agree Nor Disagree

Agree Somewhat

Strongly Agree

In short: Supporting ethical issues through buying brands would appeal to most Australian consumers.

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LIKELY LOYALTY TO RESPONSIBLE BRANDSTaking a different angle on the future, the survey asked respondents to think about what they would be likely to do. In other words, rather than making a commitment about what they will do, they were asked to predict their

probable actions in the future. It’s a small but significant difference.

The “likely to” scenario shifted opinion toward more conscientious thinking and—potentially—more conscientious behavior. Rating their agreement to “I am likely to be more loyal to brands that are responsible, ethical and sustainable,” the proportion

of non-conscientious respondents dropped to 11 percent—4 percent disagreeing strongly and 7 percent disagreeing somewhat. The proportion of undecideds (neither agree nor disagree) shrank to 31 percent, while the percentages predicting they would be more conscientious increased, with 44 percent agreeing somewhat and 14 percent agreeing strongly.

I AM LIKELY TO BE MORE LOYAL TO BRANDS THAT ARE RESPONSIBLE, ETHICAL AND SUSTAINABLE

4%

7%

44%

31%

14%

Strongly Disagree

Disagree Somewhat

Neither Agree Nor Disagree

Agree Somewhat

Strongly Agree

In short: Being a brand with a positive reputation is likely to earn the loyalty of many Australian consumers.

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Page 1 creativecommons.org/U.S. Department of Agriculture

Page 2 creativecommons.org/Kevin Dooley

Page 3 (clockwise from top) creativecommons.org/Salvatore Barbera; vaticanus; Robert Couse-Baker; Steve Cadman

Page 4 creativecommons.org/THX 1139

Page 5 (from top) creativecommons.org/Takver; OctaviusLucien

Page 8 creativecommons.org/Mike Gifford

Page 9 creativecommons.org/Takver

Page 10 creativecommons.org/Mel Green

Page 11 creativecommons.org/Walter Lim

Page 12 creativecommons.org/Aurelien Guichard

Page 13 creativecommons.org/Walter Lim

Page 14 creativecommons.org/megan ann

Page 15 creativecommons.org/bindarri

PHOTO CREDITS

Red Agency Australia, BrisbaneThe Limestores, Level 3, 33 Longland St.Newstead QLD 4006 Australiaredagency.com.au61-7-3837-3870

Red Agency Australia, MelbourneCentury House, 132B Gwynne St., RichmondMelbourne VIC 3121 Australiaredagency.com.au61-3-9670-8350

Red Agency Australia, SydneyLevel 12, 60 Miller St.North Sydney NSW 2060 Australiaredagency.com.au61-2-9963-7711

About Havas PRHavas PR is the public relations and corporate communications arm of global advertising and communications services company Havas Worldwide, present in more than 75 countries on six continents. Our two dozen agencies and networks worldwide include founding members of AMO (the leading global network of strategic and financial communications consultancies) and Cake Group (a top social experience agency). Together, we are one collective connected to one commitment: Future First. For more information, go to havaspr.com.