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Social Responsibility Drives the New Economy

Social Responsibility Drives the New Economy

By | 06.11.13
Social Responsibility Drives the New Economy

As the economic landscape continues to change, businesses and consumers are finding different, new, and creative ways to manage and recover from the long-running economic downturn and adapt to the new economy. And, part of this change includes a growing, universal conscience.

Take, for instance, how small business is providing consumers with increased value over brand- name products found at big department stores. Corey Epstein, founder of 20Jeans, says this is not hard to accomplish and suggests businesses stress ethical production to separate their business from the competition. He does just that with his start-up, which sells basic men’s fashions at price tags that are often about $20 per piece. Epstein points out that working with local providers when in the start-up scale is often the best way to go financially.

Cuyana has built on that approach and added a twist. “People in America are drowning in their belongings,” says co-founder Karla Gallardo. “We want to promote buying less and buying in a meaningful way.” Here’s what they do with their Lean Closet Movement: For every purchase, a consumer is sent a reusable bag to return an apparel item they no longer want or need to Lean Closet. Cuyana, in turn, donates that article and gives its customer a $10 credit to be used toward the next purchase.  The company contracts with craftsmen globally to produce what Gallardo describes as high-quality clothing and accessories with affordable price points.

Research indicates these approaches work. Public relations and marketing firms, Cone Communications and Echo Research, recently conducted a study that found that corporate social responsibility is a so-called “reputational imperative.” In fact, according to the survey, in excess of 90 percent of consumers across the globe say, if offered a product at a similar price and with similar quality, they would likely switch brands if the purchase supported a good cause. What’s more, most—90 percent of those surveyed—would stick with the socially conscientious business over big names and brands.

Not only do businesses without social compassion run the risk of losing customers, the research revealed that 90 percent of the shoppers surveyed would boycott those companies if they found out the company was involved in irresponsible practices. As a matter-of-fact, 55 percent said they did just that in 2012. “It’s no longer a question of if companies should engage in [corporate social responsibility],” said Alison DaSilva, executive vice president for research and insights at Cone Communications. “It’s now a question of to what extent will they do so, and how will they create and communicate real and meaningful impact.”

Today’s consumers expect more and, for the most part, do not condone business being in existence to simply earn money for shareholders. More want businesses to provide more products and services that reflect social responsibility. Today’s consumers not only want to the companies they shop with to be responsible, they feel they must also be accountable for their purchasing choices. What’s more, they are encouraging friends, family, and co-workers to do the same, with reasons ranging from a desire to improve society to protecting the environment.

And today’s shopper is using the Internet to research and spread the word and to engage with companies to discuss their issues. At least 25 percent say they have communicated negative news on social media. “Social media is changing the face of [corporate social responsibility] as citizens worldwide have unprecedented access to information about corporate behavior,” said DaSilva. “They are poised to not only engage with companies around vital issues but also serve as [corporate social responsibility] megaphones, equally propagating the good and bad.”

Business owners are beginning to learn that simply selling a good product or offering a good service is no longer sufficient when dealing with socially conscientious purchasers. Companies seeking to keep pace with the new economy and the changing face of their consumers should address issues concerning economic development, the environment, human rights, and poverty and hunger, according to the more than 10,000 consumers surveyed in The United States, Canada, Brazil, the United Kingdom, Germany, France, Russia, China, India and Japan.

Sources

Clark, Patrick. “Pushing Fashionistas to Buy Less, but Buy Something“. Bloomberg Business Week.  June 6, 2013.

Brooks, Chad. “Social Responsibility No Longer Optional for Businesses“. Fox Small Business. May 24, 2013.

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