What kind of a shopper are you?

Published in the Philippine Daily Inquirer, Business Friday, May 30, 2008

For many decades, the process of shopping was driven largely by consumers’ needs and eventually with a rising income, by pleasure.

Until very recently, most consumers were either largely hedonistic or pleasure driven; rational; economic or value driven; or simply lavish spenders.

Hedonism, Economy and Lavishness

Hedonistic buyers are self-indulgent, seek pleasure and shopping enjoyment, are large impulsive and ostentatious buyers. An article by Arnold and Reynolds published in the Journal of Retailing identified six reasons why hedonistic buyers shop. These include being motivated by adventure and an enjoyable experience (the adventure hedonist); gifts oneself with a special treat (the social hedonist); always compelled to buy anything new (idea hedonist); finds enjoyment in shopping for others (role hedonist) and enjoys bargain hunting (value hedonist).

Rational buyers plan their purchases and think about them extensively before finally buying. They are in full control of their buying motivations and act on the basis of a product or service’s perceived need and benefit, functionality and practicality. Necessity, cost and quality are main shopping drivers. Brands whose good quality and value for money reputation precede them gets into the rational buyer’s selection criteria. Buying is the result of a logical process – whether the benefit is functional, emotional or moral.

Pure costs and savings drive the economic buyer. Consumers typified by this segment are partial to deals and countless incentives; succumb to extensive discounts and price-offs, coupons, etc. – all in the guise of extending the value of their money. They buy when the price of goods fit their expectation. Whether brands or commodities, what matters is the final cost to them. A 2008 Global Nielsen Consumer Report on Grocery Store Choice and Value for Money lists the Philippines as having the most avid value-seekers, along with Singapore, Portugal, Germany, India and Austria.

The lavish shopper, also called the spendthrift, is no doubt an impulse buyer capable of spending money almost foolishly and needlessly. Money is no object. Driving the lavish shopper is the temporary happiness, pleasure, attention and enjoyment one gets from the momentary buying experience. Lavish buyers extol the virtues of affluent and designer brands, not many people can buy.

The rise of cause-oriented consumers

The nineties ushered a new segment of consumers, supporting the use of products and services that represents the good side of moral, ethical and social issues. Called the ethical or cause-oriented consumers, this segment buys available products and services that make a strong statement about issues that affect the world and mankind e.g. preservation of the environment, fair trade and fair workplace practice, human dignity, poverty, racism and multicultural issues, among others. Consumer purchase is made irrespective of cost mainly because the product or service’s attributes matches the personal moral beliefs and values of the buyer. Successful ethical brands integrate moral attributes and beliefs into their business processes strongly suggesting authenticity and is not a mere lip service or a promotional message of the company.

A 2007 study by Latitude Research titled “Good” revealed that consumers are willing to pay a premium for products that espouse goodness. The same study revealed that no less than 85% would like to see companies do more good.

Foreign brands take up the cause

Grameen Bank, founded by Nobel Peace Prize winner Muhammad Yunus is a living symbol of a successful ethical brand where the over-arching goal is to lift the poorest of the poor in Bangladesh from poverty, hunger and inequality. Grameen Bank pioneered an innovative micro-credit banking system that provided credit and financial capital to the poorest of the poor women in rural Bangladesh without any collateral enabling them to sustain their livelihood.

Another is fair trade fashion pioneer, People Tree, a strong advocate of fair trade, social justice and environmental preservation. People Tree prides itself in beautifully handcrafted cotton-certified garments and accessories through sustainable partnerships with fair trade and organic producers in developing countries.

Boot giant Timberland strongly advocates volunteerism, encouraging employees to participate in a company-sponsored volunteerism program called Path to Service, where employees get 40 hours of paid time for an equivalent donated time and service to a local community or organization. Timberland likewise strictly observes fair trade, fair workplace treatment and wages, and eco-awareness and consciousness in its production and shipping processes.

Designer clothing fashion brand, Edun, observes profit while sustaining employment in developing areas of the world particularly in Sub-Saharan Africa. Edun art-nouveau inspired fashion is founded by Irish music artist Bono, Ali Hewson and Rogan Gregory, and describes itself a socially conscious company.

Luxury fashion retail outlet, Barney’s New York stepped up demand for green fashion by introducing organic and eco-friendly products across all its product categories in all its stores. Julie Gilhart, Barney’s fashion director, in a remark made to WWD publication said, “Luxury in the future means buying merchandise that has both style and quality, yet is very conscious of organic principles and sustainable business models.

Filipino brands too, take up a cause

Proudly, Philippine-made, Naturescast green home furnishings include a line of biodegradable and renewable earth-friendly home and architectural products made from agro-forest wastes like fallen twigs, dried leaves and barks. These lines are carried by designer outlets and luxury retailers worldwide like Smith & Hawken, American Signature, Villeroy & Boch AG in Germany, Neiman Marcus and Crate & Barrel in the US, Italy’s Antonio D’ Erasmo and Nieukoop.

Philippine-made Naturescast® made from barks, twigs and dried leaves.

Cool Kids character-based brand of school bags, shoes and children’s accessories is the first Philippine brand to take up the cause of establishing eco-awareness among young children. The brand partners with the World Wide Fund for Nature (WWF), the world’s largest conservation organization present in more than 100 countries to help raise awareness among Filipino children on the value of preserving the natural environment and the challenges faced by mankind in preserving Planet Earth.

Marketed at nearly half the price of foreign character based brands, a portion of the sales from every item is donated to WWF. Likewise, with a minimum purchase, a child gets a storybook on the adventures of Cool Kids characters, Coco and Kimmy and their magical friends comprised of princesses, fairies and robots whose collective goal is to save planet Earth from environmental degradation. The book teaches kids how to reuse, recycle and reduce wasteful consumption.

Are ethical brands likely to stay?

Indeed, non-believers of ethical marketing, who think brands with a cause are merely riding on the bandwagon of a fad would do well to think twice or thrice, as brands with a cause are more likely to impact strongly on consumers’ lifestyle, motivations and aspirations.