Confronting capitalism and brand purpose in the age of anxiety
Capitalism has fueled countless human achievements. The Industrial Revolution, big tech, modern medicine and the green movement have all unequivocally benefited humanity by lifting people out of poverty, raising our standards of living and extending life expectancy. It has provided the tools to innovate against some of the toughest problems humanity has faced. But the shortcomings of our paradigm have also never been more glaring. In a world of free markets, brand-building, omnichannel strategies and new
product innovation, talk of managing our capital-driven predicament seems almost rude, or even politically incorrect.
The trade-off of short-term profits for what was once seen as vague, distant problems have returned to us with urgency, like the Ghost of Christmas Past. As the world faces an uncertain future of pandemics and climate consequences, political unrest and polarization, we seem to have crossed a Rubicon of discontent with the status quo. In fact, Edelman’s 2020 Trust Barometer found that 57% of people worldwide said that “capitalism as it exists today does more harm than good in the world.”
Under capitalism, people enjoy greater individual, political and economic freedom. But in many developed nations, the myth of infinite growth has contributed to a significant gap between the wealth of the richest and poorest people, a gap that grows wider every day.
Purpose vs. Infinite Growth
It is in this deep complexity that brands may face their toughest challenges. As we endure our current interconnected crises (implications of climate collapse, looming economic downturn, global pandemic, geopolitical uncertainty and pervasive human inequity), brands and their stakeholders need to ask themselves whether we are contributing to the problem or embodying solutions. Consumers are already asking this question, and brands without answers, even category leaders, risk losing their relevance. Shifting our understanding and our definitions of growth doesn’t mean we need to shrink, but it does require imagination, a keen understanding of the future landscape, and a fresh approach to innovation. Old metrics, models and assumptions may be our own worst enemy in a market where consumer demands have shifted to value trust over newness, lasting quality over flashy features, and humancentric purpose over hype.
Today, over 60% of consumers look for brands they can trust before they look at price. And their definition of trust has shifted; they expect brands to take an active stand on the issues that matter to them, while the products solve everyday problems. The tried-and-true emotional and aspirational drivers like image and status are taking a backseat to health, family, quality and social responsibility. Evidence of this consumer shift reveals itself in Edelman’s Trust Barometer Special Report “Brands Amidst Crisis.” Eight thousand people in eight countries were surveyed to uncover powerful insights that illuminate the shifting priorities of consumers.
Consumer fear has escalated.
Fear levels continue to tick upward around physical health and psychological resilience, economic stability and educational challenges. Trust in brands that alleviate their fears jumped a whopping 400%. Trust builds loyalty like never before: High-trust consumers demonstrate marked increases in brand loyalty, repurchase, engagement, sharing personal data and word of mouth brand advocacy.
Consumer values have evolved.
Spending time with family, making smarter purchases, and helping other people were top responses, while creating an external image, being seen as a trendsetter and indulging in the finer things have all dropped in priority. Brands are overwhelmingly expected to speak to the bigger societal problems of our time, and to act on these problems.
Brand action is the new price of entry.
Brand storytelling has shifted to brand-doing, where actions speak louder than taglines. Future plans and future talk mean little to these consumers, who want brands to act now. There’s a huge opportunity for brands to redefine their role by contributing to larger solutions, acting as advocates and change agents. There is no skirting this expectation, particularly with younger consumers: if a brand lacks purpose and societal value, they will deselect.
These findings mark a dramatic evolution in the way consumers make purchase decisions. If a problem has a powerful impact on the lives of consumers, and brands are contributing to that problem, how can consumers build trust? From safe working conditions and workplace discrimination to economic and environmental impact, brands are now accountable for their decisions.
Purpose-Driven Innovation: The New Rules
Through the lens of Maslow’s hierarchy, consumers are now living on the lower rungs of physiological and security needs. In many ways, we are back to basics. Consumers want to know that we understand and empathize, and they need us to meet them where they are. So how does this impact our innovation practice?
First, use it to find your purpose. And if you have one, use it to ensure that every facet of your business is living up to that purpose. This is easier said than done, and the fundamentals of brand-building is not the place where we typically think of innovation investment. But living up to a purpose that resonates with consumers, and that delivers on its promises in holistic and tangible ways may take some serious innovative thinking. It may even require revolutionary thinking. A successful brand can answer three pivotal questions: Who are you, what do you do, and why does it matter? A successful, purpose-driven brand answers these additional questions: What do we care about? What part of the world can we improve? How are we uniquely suited to improve it? What action must we take?
New action requires change. Change requires innovation. Innovating requires action. It’s a virtuous cycle that is inherently authentic and cannot be faked.
Janet Balis in The Harvard Business Review articulated the “new truths” of marketing in a time of crisis, with a few powerful shifts:
- Old truth: Your brand should stand behind great products.
- New truth: Your brand should stand behind great values.
In this crisis of trust, living up to your values and delivering on your promises carries new weight. Invest time in innovating how you live up to the values and promises your brand articulates, even if it takes radical ideas: What could the brand do? What partnerships help create your virtuous cycle? What will your brand action be?
- Old truth: Relationships matter.
- New truth: Relationships are everything.
Trust has always been important. But a brand promise is more sacred than ever, and if your product, service or experience fails to deliver on that promise, consumers can’t build authentic relationships with you. You will have betrayed their trust, and trust isn’t easily regained. In the current virtual retail environment, building these relationships can be challenging. Invest innovation resources to uncover surprising and delighting ways to create authentic connections with consumers.
- Old truth: You are competing with your competitors.
- New truth: You are competing with the last best experience your customer had.
Younger generations have grown up with technology woven into their day-to-day experiences, and today’s brand landscape is full of customized experiences and highly personalized product offerings. Consumers today expect more, in a time when we are all starved for immersive experiences. Invest innovation resources in developing experiences that put your brand purpose at the center, without the hype of borrowed interest.
The Future of Big Brands
Imagine this scenario: A global consumer packaged goods category leader, recognizing an opportunity and a gap in their portfolio, decides to act on these shifts. They develop a sub-brand with an ethical sourcing story, no harmful ingredients, zero carbon footprint, and an initiative to restore the Amazon rainforest. Their Masterbrand uses the worst types of plastics, pollutes the ocean, and exploits a workforce overseas. How successful will this new product innovation be?
The reality of innovation is, it’s hard work, full of uneasy decisions and calculated risk. And the bigger the brand, the riskier change can feel. But innovating your innovation practice is the most important work your teams can do, in an era of profound uncertainty and fear. We owe this work to our consumers, to ourselves and to our long-term resilience and growth.