Me, my life, my wallet: Third edition
Meeting customers where they are, with what they want and how they want it.
Interaction with customers is becoming less binary and transactional and more multi-dimensional and relational.
Insights from the third edition of KPMG International research, Me, my life, my wallet
The age of the integrity economy Purpose is the organization's answer to the perennial question: "Why are we here?" To answer that, leaders need to consider whether that purpose is relevant to customers and communities, is unique to them and is something they can do better than their competitors.
Once defined, purpose needs to be embedded into the organization's strategy, structure and culture. Executing purpose can entail breaking down silos, mapping and applying customer journeys, developing new sourcing models, attracting the right talent and reinventing products and services. Yet the rewards for organizations that embed purpose into their business are tangible, significant and potentially game-changing. Such actions can build trust, create authenticity and instill loyalty in customers, suppliers, employees and communities.
Several analysts have suggested that we are on the cusp of an "integrity economy". Organizations that can credibly demonstrate they are living up to their ethical, social and environmental promises gain significant competitive advantage. The concept is not new—American journalist Anna Bernasek argued that integrity was a precious economic asset as long ago as 20101—but it is more resonant and relevant than ever. The fact that actions—and, in particular, purchasing decisions—have profound consequences has become starkly clear to all of us. Our research shows that 85 percent of consumers say that a company's integrity is "important" or "very important" to them.
In the wake of COVID-19, a new consumer is emerging—more financially constrained, digitally aware and thoughtful in their decision-making. Our research shows that 80 percent of consumers want to purchase from a brand that reflects their values—a sentiment that is remarkably consistent across regions, generations and income groups.
Nine out of ten consumers say they will pay more to purchase from an ethical brand or retailer that gives back to society. Intent is one thing, but buyers are already putting that sentiment to work. One in four consumers say that such factors have changed their purchasing decisions (a proportion that soars to 42 per cent in Latin America) and roughly three out of ten Millennials say the same.
The changing nature of trust
One of the toughest challenges facing organizations today is to truly understand, without biases, prejudices or preconceptions, how the rest of the world sees them. Yet seldom has that task been so urgent. Purpose can bring the brand alive throughout the customer experience—but only if your customers genuinely trust you. The complicating factor here is that trust is "in play" in a way it has never been before.
Our research shows that only four out of 12 sectors are truly trusted by more than half of the world's consumers: healthcare (60 percent); technology (59 percent). retail (52 percent) and banking (51 percent.) The three sectors in which consumers have least faith are advertising (26 percent), wealth management (33 percent) and government (35 percent).
The degree of trust in sectors varies immensely across regions and generations. In the Middle East, 66 percent of consumers have confidence in government, compared to 32 per cent in North America and 28 percent in Europe. In a similar vein, 43 percent of Millennials trust the media, as opposed to 31 percent of the Silent Generation.
We are moving away from a world where the customer's interaction with an organization was primarily binary and transactional into one where it is multi-dimensional and relational. In this new world, trust is not defined purely by the quality of the customer experience but also by their judgment of whether the organization is living up to its purpose. Organizations that do not invest in their purpose are said by economists to be indulging in "cheap talk"2.
A customer's trust depends on three critical factors: honesty and openness, respect and inclusion, and the belief that organizations identify with—and care for—them. The bottom line is that every part of the organization can build trust—or destroy it.
of consumers say they prefer brands that align with their values3.
say an organization's integrity is "important" or "very important" to them.
of Latin American consumers have changed a purchasing decision because of an organization's environmental or social record.
of Millennials have changed a purchasing decision because of an organization's environmental or social record.
trust healthcare, making it most the trusted sector, ahead of technology (trusted by 59 percent) and banking (51 percent).
The power of purpose
COVID-19 has already reshaped customer attitudes, values and expectations and it is clear there is more significant change ahead. We are seeing a shift towards "buying into"an organization rather than 'buying from' it. As customers make their purchasing decisions, they are giving increasing weight to brand purpose and reputation, quality, safety, security, convenience, reliability and value for money.
In the 1980s and early 1990s, it was often suggested that the only purpose of a company was to create value for its shareholders. After a decade of change topped off by a year of historic turbulence, consensus is shifting to something broader. There is a growing recognition that value must be targeted to a greater set of stakeholders including shareholders, customers, employees and communities. Purpose helps to establish a north star to navigating value creation across these stakeholders.
1 http://content.time.com/time/business/ article/0,8599,1970964,00.html
2 https://hbr.org/2019/09/put-purpose-at-the- core-of-your-strategy
3 KPMG International research July 2020
6 Adobe UK content consumption report