Major brands are under pressure

The new generation has grown up with the Internet and social media as an integral part of their daily lives.

As a result, their behavior and spending patterns are vastly different from those of their age 20 years ago, which creates challenges and opportunities for companies looking to engage with them. This may be especially true with regard to assumptions about how companies treat our planet.

Companies selling branded goods are at risk in this brave new world of the mobile internet, where product quality and supply chain information is easily accessible through user reviews.

We believe these companies can continue to thrive, but only if they make a significant effort to be agile and innovative and demonstrate a genuine commitment to sustainable business practices.

The threat is particularly acute for companies with long-established brands, which used to command consistent loyalty and predictable consumer demand. The emerging new generation of consumers are more aware of the challenges facing the world and have a sense of collective responsibility to tackle them as global citizens.

As Richard Williams, Unilever’s head of investor relations, puts it: ‘With nearly 2.5 billion people around the world using our products every day, we have a duty to be responsible.’

Unilever’s results show that its sustainable brands are growing rapidly and all of its products have better-than-average profit margins.

There is much talk and some evidence that these new consumers are less loyal to brands than their parents and grandparents. This shift may be due to their exposure to alternative options through the time they spend online and a greater willingness to try out new brands in hopes of getting a better customer experience or lower price.

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There is also a growing distrust of institutions, the government and the media, as measured by the Edelman Trust barometer. The 2020 survey shows that most people do not trust institutions that track barometers. This makes the younger generation less inclined to defy the decisions and brands of their elders.

In Edelman’s latest survey, more than half of respondents globally believe capitalism in its current form is doing more harm than good. As such, consumers are less likely to trust big business and prefer to endorse smaller companies or brands – or at least ones that seem smaller and more authentic.

Consumers are increasingly inclined to endorse, and often pay a premium for, brands with a clear sustainable ethos and that want to help solve environmental or social problems.