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Gen X, Y consumers choose brands that support a cause

31 March, 2014

More than three million Australians switched from their normal product or service to another brand last year because the alternative brand supported a cause or charity.

Leading the way are Gen X and Gen Y – spanning from 20 to 49 in age – with almost one in five changing brands to support a charity.

New research in the Switching Brands for a Cause report commissioned by Cavill + Co shows almost one in six Australians of all ages, incomes and family circumstances have switched for a cause.

Hailey Cavill, social entrepreneur and Director of Cavill + Co, said the findings were encouraging for any marketer seeking to attract today's socially aware consumers.

"The potential to win over even 10 per cent of consumers would be good news, and our research shows partnering with a charity can almost double this," she said.

"A properly set up charity partnership is an absolute winner in today's fiercely competitive retail environment. By comparison, advertising is often unreliable, brand differentiation can be short-lived, and social media can be frighteningly risky."

Cavill said the right charity partnership had far-reaching benefits beyond retail sales.

"There is a strong business case for adopting a charity and then leveraging the partnership. It motivates staff and builds pride, differentiates your brand, builds trust, enhances your corporate reputation, provides emotive content for social media - but the conquest sales alone would justify the strategy.

"Any marketer trying to woo the cashed up Gen Y or the discerning Gen X consumer should consider partnering with a relevant charity and promoting this at the point of purchase.

"These groups care about the social implications of their purchases, and this research shows that they are flexing their altruistic muscle at the checkout."

Cavill + Co research identifies Gen Y (age 20-34) as fickle, cashed up consumers who have high levels of disposable income, like going out, love shopping (gadgets, clothing and takeaway food) and are concerned about social and environmental issues.

Gen X (35-49) comprises deal-hungry prudent purchasers, spending big on luxury items including fragrances, cosmetics, beauty products, fashion and alcohol, entertainment and health services – and lots of coffee.

Combined, these groups represent 11 million Australians – half the population – and they are switching for charity more than any other Australian shopper.

In the survey Switching Brands for a Cause conducted by Di Marzio Research during the week of 3 March 2014, consumers were asked if they had switched products or services in the last year due to its support of a charity or cause.

Overall, 16 per cent of the population agreed, and 19 per cent of both Gen X and Gen Y agreed. The highest level of switching was for the 25-34 age group, with 25 per cent having switched.

Consumers in NSW were more likely to switch (21 per cent) than those in traditionally philanthropic Victoria (10 per cent), blue collar workers more likely (18 per cent) than retirees (10 per cent), and singles more likely (21 per cent) than couples (16 per cent), those with children (15 per cent) or empty nesters (12 per cent).

Cavill said the figures were compelling for marketing managers weighing up the merits of supporting a charity and promoting that charity on product packaging or advertising.

"The question that matters is whether enough people will switch to your brand to justify what you invest in the charity, pack change or POS material, and leverage costs. The answer is clearly yes," she said.

"But too many marketers choose the wrong charity or focus on the wrong message at the point of purchase – or fail to support the partnership with additional promotion.

"Getting the right charity and communicating it correctly are critical, and that's where Cavill + Co comes in. We've created 41 corporate-cause partnerships in 18 years, and we can help to make it a win-win for both the corporate and charitable partners."

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