Over the past 2 weeks, we’ve shown how ESG is influencing customer purchase decisions across the technology, financial, health and personal care, and investment industries, so this week we’ll keep the ball rolling by discussing the premium shoppers are willing to pay ESG-invested brands for their products/services.
Proving your brand’s ESG efforts is key to winning the customer’s heart and wallet: savvy purchasers are still looking for quality and innovation, but they also want to feel good about how and why they made their purchases. Shoppers still care about traditional influencers such as price and availability, but they are paying closer attention to the environmental and social impact of brands as well.
This week, our team wanted to take this line of thinking one step further. Where are shoppers most motivated by a brand’s ESG position? Does a brand’s ESG position only matter to shoppers when they are making a luxury purchase, or are shoppers going all-in and considering ESG on all of their purchase decisions, regardless of the price point?
Jason Ten-Pow, our CEO has long stated that “the approach to and the payoffs of ESG will differ by industry and price point”. Essentially, he has determined that the impact ESG has on shaping decision-making is deeply nuanced, requiring a deep understanding of customers’ wants, needs and desires. Particular products and services sold at specific price points face greater risks when it comes to ESG, but also offer greater opportunity for higher rewards. This suggests that a carefully articulated approach to ESG is necessary to maximize the ROI of ESG investments, so It’s not surprising that our research shows this to be true.
First, 30% of shoppers report ESG has a significant impact on their purchasing decision when it comes to buying products and services that are priced above $1,000.00. Here are some of the differences across sectors that are worth noting:
Products sold by healthcare & pharma companies: 34% report that ESG impacted their purchase
Products sold by Financial Services Institutions: 32% report that ESG impacted their purchase
Products sold by Personal Care Companies: 31% report that ESG impacted their purchase
Products sold by Investment Companies: 27% report that ESG impacted their purchase
Products sold by Technology Companies: 25% report that ESG impacted their purchase
Second, 28% of shoppers report that ESG impacts their purchasing decision when it comes to buying products and services that are priced between $200 and $1,000. As you can see, the impact ESG has at this price point is lower, but there are some dramatic differences to keep in mind:
Products sold by healthcare & pharma companies: 48% report that ESG impacted their purchase
Products sold by Financial Services Institutions: 37% report that ESG impacted their purchase
Products sold by Personal Care Companies: 29% report that ESG impacted their purchase
Products sold by Investment Companies: 17% report that ESG impacted their purchase
Products sold by Technology Companies: 9% report that ESG impacted their purchase
Third, 33% of shoppers report that ESG impacts their purchase decision when it comes to buying products and services that are priced lower than $200. As shown, the impact that ESG is having at lower price points is high, while the importance of ESG to tech purchases has jumped:
Products sold by Technology Companies: 39% report that ESG impacted their purchase
Products sold by Financial Services Institutions: 39% report that ESG impacted their purchase
Products sold by healthcare & pharma companies: 33% report that ESG impacted their purchase
Products sold by Personal Care Companies: 31% report that ESG impacted their purchase
Products sold by Investment Companies: 24% report that ESG impacted their purchase
Technology Products:
The technology marketplace is both competitive and unique from other sectors when we consider the impact of ESG. Technology companies selling products and services priced at more than $1,000.00 face both the greatest risk and opportunity since this is the price point where ESG will have the greatest impact on decision-making.
Out of all technology product/solution purchasers:
47% report that ESG will impact their purchase decision-making even when spending more than $1,000.00.
18% report that ESG will impact their purchase decision-making when spending more less than $1,000.00 but more than $200.00.
35% report that ESG will only impact their purchase decision-making when spending less than $200.00
Investment Products:
The investment products and services marketplace is growing with many new platforms and vehicle options available to investors. As competition grows, which group of investors will be most influenced by ESG investment? Our data shows that the greatest risk and opportunity lie with those who are investing the most, as 48% of this group report that ESG influences their investment decisions.
Out of all investors:
48% report that ESG will impact their purchase decision-making even when spending more than $1,000.00.
32% report that ESG will impact their purchase decision-making when spending more less than $1,000.00 but more than $200.00.
20% report that ESG will only impact their purchase decision-making when spending less than $200.00
Personal Care Products:
Many brands that specialize in providing personal care products and services have long been encouraging purchasers to consider more than just price when making a decision. Those spending more than $200 represent 80% of the customer-base impacted by ESG, and this high percentage of influence is most likely the result of the industry’s ongoing promotion of sustainable products.
Out of all personal care product purchasers:
41% report that ESG will impact their purchase decision-making even when spending more than $1,000.00.
40% report that ESG will impact their purchase decision-making when spending more less than $1,000.00 but more than $200.00.
19% report that ESG will only impact their purchase decision-making when spending less than $200.00.
Financial Services:
Financial institutions face growing demand for ESG-friendly products and services. Currently the greatest opportunity for FSIs lies with consumers who spend between $200 and $1000.
Out of all financial institution clients:
36% report that ESG will impact their purchase decision-making even when spending more than $1,000.00.
44% report that ESG will impact their purchase decision-making when spending more less than $1,000.00 but more than $200.00.
21% report that ESG will only impact their purchase decision-making when spending less than $200.00.
Healthcare/Pharma:
The pharma and healthcare industry has long struggled with how to attract customers directly. ESG offers this industry a unique story to tell, and that approach might allow some within the healthcare and pharma industry to carve out a unique position. The price point with the greatest risk and opportunity is for products between $200.00 and $1,000.00 dollars, with 50% of consumers reporting that ESG impacts their purchase decision.
Out of all healthcare and pharmaceutical product purchasers:
34% report that ESG will impact their purchase decision-making even when spending more than $1,000.00.
50% report that ESG will impact their purchase decision-making when spending more less than $1,000.00 but more than $200.00.
16% report that ESG will only impact their purchase decision-making when spending less than $200.00.
Next Week: Be sure to join us next week when we share the inside scoop on what types of customers are most likely to be influenced by a company’s ESG position.
Stay tuned!
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