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Do company ethics ACTUALLY affect purchase decisions? [study]

For some corporations, ethics has become a big business. Companies have turned their focus on more than just the bottom line. But does it matter to the consumer?

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They’re on your side

For some corporations, ethics has become a big business. Companies have turned their focus on more than just the bottom line. They tout ethical practices as a central tenant of their business or seek to address social and environmental issues. By doing so, many businesses hope to influence consumer purchase decisions in their favor.

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Consumers punish rather than reward

But, do company ethics really affect purchase decisions? A recent study by Mintel and Lightspeed would suggest perhaps not. While consumers don’t necessarily reward ethical companies by shopping with them, they are more likely to punish perceived unethical companies.

Of the 2,000 US adult internet users surveyed, more than 50% said they would stop buying products from a company they believe to be unethical. When it comes to telling others, over one-third of respondents said they would.

While it seems pretty clear that just about anyone would prefer to buy from an ‘ethical’ company, their study found this may not be the case.

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In reality, less than half of internet users said they would buy products from a company they believe is ethical. However, they are more likely to stop supporting brands they think are unethical, and tell others about it.

Indeed, a 2008 experiment done by the Wall Street Journal found that consumers punished unethical goods more than they rewarded ethical ones.

The lure is in the product

Overall, both companies found that half of internet users were “sometimes” influenced by a company’s ethics.

Even though being considered an ethically good company doesn’t mean users will end up choosing them more often or recommending them to a friend, other research suggests that web users respond to ethical products instead.

One poll found that consumers tend to seek out products with social or environmental benefits. Therefore, while companies themselves are not more appealing, the lure for consumers may be in the socially or environmentally centered product.

#CompanyEthics

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Written By

Nichole earned a Master's in Sociology from Texas State University and has publications in peer-reviewed journals. She has spent her career in tech and advertising. Her writing interests include the intersection of tech and society. She is currently pursuing her PhD in Communication and Media Studies at Murdoch University.

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