ZMI ALPHA:Why more brands are merging e-commerce with social good initiatives – Glossy

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ZMI ALPHA:Why more brands are merging e-commerce with social good initiatives – Glossy

Many digitally-native brands use their e-commerce platforms to encourage customer contributions to social causes, especially if social impact is ingrained in their brand DNA. Data shows the events of 2020 have accelerated the trend, with brands increasingly incorporating cause marketing into their business operations. 

According to research conducted by DTC Magazine and ShoppingGives, a technology company that helps brands integrate nonprofit donations directly into their shopping platforms, since the pandemic’s onset in March 2020, and civil unrest over racial injustice in the U.S. in June 2020, there have been significant increases in customer donations and order values across multiple charity categories. 

  • ShoppingGives saw a 203% increase in brand partners supporting COVID-19 causes in Q2 and Q3 of 2020 compared to Q1. 
  • From May to December, donations to civil-rights organizations reached more than 150,000 instances. The health category during the same period saw more than 50,000 donations with an average order value (AOV) of more than $75. 
  • Overall, the data showed that brands saw 18% higher AOV on orders with donations in 2020, with a 21% quarter-over-quarter increase from $103 in Q3 to $124 in Q4. 

These data points present a small picture of how the past year made people more aware of brands’ values and more willing to merge their shopping habits with activism. As the pandemic continues to influence the ways people physically and ethically shop, e-commerce brands are implementing social good programs as a crucial strategy for long-term growth. 

Customers buy from brands that publicly align with their values

Research shows that companies are indeed spending money on social good programs, especially as customers continue to migrate their shopping habits online — and they’re willing to shift loyalties to new brands. A 2020 McKinsey study found that the pandemic prompted 75% of customers to try a new shopping behavior, while 36% switched brands and said they would continue to do so, despite previous brand loyalty. Conscious capitalism has become another avenue to attract and earn a share of wallet for people in that mindset.

The practice of conscious capitalism, in which customers are aware and care about how products they buy impact society, is now complemented by shoppers wanting brands to publicly advocate for values that align with their own, be it sustainability or social justice. A 2020 research report, ‘The Corporate Social Mind’, found that nearly 60% of customers in the U.S. want businesses to be vocal about issues.

“When you are buying from a brand, you are buying what it stands for and how it makes you feel or the conversation you are having with it,” said Alexa Buckley, founder at direct-to-consumer footwear retailer Margaux, in the DTC-Magazine-ShoppingGives report. “It would be difficult for a brand to ignore the conversation we’re all in on a global level because we are all living a very shared experience as humans in this world. It’s a brand’s responsibility to engage in a conversation with their community.”

Authentically championing a cause 

Companies are also working to ensure their social impact messaging fosters connections with returning and new customers and fits in with their brand story. Brands that excel at cause marketing are increasingly aligning a specific cause with a specific product. 

“Direct-to-consumer companies, who have a one-to-one relationship with their consumers, know and are hearing that giving back is something their consumers care about, so this is how they can connect with them,” said early-stage investor Tina Bou-Saba, as part of the DTC-Magazine-ShoppingGives report. “It’s a really big opportunity for differentiation.”

Sakara, a plant-based nutrition brand that sells prepared meals and supplements, partnered with ShoppingGives in late 2020 to launch a donation widget on its website’s product pages. As part of a larger cause marketing strategy, the widget directs customers to make a donation with each order to Wellness In The Schools — a national nonprofit that promotes healthy eating and fitness in public schools — or a cause of their choice. 

“The widget makes the onsite journey for customers super straightforward,” said Megan Fleishman, director of growth marketing at Sakara. “There’s not a lot of selection or follow-up required to make the donation.”

Fleishman said the brand has seen successful ROI with the widget integration on its Shopify platform, as well as positive customer engagement and an increase in conversion rates over the past few months. Sakara forecasts that more than 50% of its charitable contributions this year will come through its ShoppingGives integration. 

Fleishman noted the brand is also driving customers to its product pages through dedicated emails, paid Facebook ads and organic social posts that include messaging about giving back. 

“The response has been really strong,” Fleishman said. “Ultimately, it’s a win win when you can give back and also improve your conversion rate.”

Social impact reaches younger customers

When it comes to connecting with younger customers, brands are additionally investing in social impact programs. The millennial demographic, in particular, responds well to corporate social responsibility (CSR) initiatives — CNBC reported that three out of four millennials donated money during the pandemic. 

For brands looking to recruit younger talent, social good integration has been an effective approach. The ‘Cone Communications Millennial Employee Engagement’ Study found that 64% of millennials would not take a job if their employer did not have a strong CSR policy, while 83% of millennials would be more loyal to a company that boosted their efforts to support social causes. 

Social good initiatives are also influencing younger shoppers’ purchasing decisions. According to a 2019 Cone Communications study on Gen Z, 90% of Gen Z believes companies should act to help social and environmental issues, and 75% will conduct their own research to see if a brand is backing up their statements with actions.

“For legacy companies, this is a totally different way of thinking because traditionally those businesses have been very apolitical,” Bou-Saba said. “They’ve been trying to remain neutral. On the other hand, you have direct-to-consumer companies that have a one-to-one relationship with their consumers. They know these are the things their consumers care about, and this is how they can connect with them and the online life of younger generations of consumers.”

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