REPUTATION AND SUSTAINABILITY
The future according to Italian consumers
Reputation creates value for companies and for their shareholders, and this is the reason why it’s a strategic asset. Naturally, a brand’s reputation increases when the company does something seen as good, and goes down when it does (or it’s accused of doing) something wrong. In 2018, financial markets have severely punished the capitalization of companies involved in scandals related to their production processes, their products and services.
For brands looking to improve their reputation, it helps to first define it. Reputation is how consumers evaluate a brand or a product based on their experiences, whether direct or mediated by different ways of communication.
Reputation relates to how brands have behaved in the past, and to expectations of how they will behave in the future, with us and with others. This is a key point: reputation is connected to sustainability, because consumers are also interested in the way the brands behave towards others.
How much does reputation count in the Italian market? Without doubt, a lot!
According to Lorien National Observatory on Italian Population, about 80 percent of Italians say "brand reputation is very important" to them, and 20 percent say "reputation is the most important driver" to consider during the purchase of a product or service. Those most concerned about a brand’s reputation tend to be more affluent consumers, professionals and seniors.
As well as considering the merits of a product, 19 percent of Italians say sustainability is a significant factor in their purchase decision making, and only 5 percent say this is never a consideration for them.
Who are the most sustainability-conscious consumers in Italy? It’s those who live in the northeast and the center of the country, as well as those who value a strong corporate reputation, who tend to be the self-employed and seniors.
Food for thought
Consumers pay more attention to sustainability when choosing products that are likely to have a direct impact on their health, which explains why sustainability is a consideration for 66 percent of people buying food, 52 percent buying personal care items, and 50 percent choosing household products.
Consumers of transport, home furnishings and home construction also place great emphasis on sustainability, but in fashion only 35 percent of shoppers rate sustainability as a key factor in their decision making; trends and personal style are much bigger considerations.
There are many ways that the reputation of a brand can be put at risk, each with different levels of gravity; 50 percent of Italians would never buy products or services if they knew the company had committed certain kinds of abuse. They consider unforgivable brands that:
- pollute the environment
- violate human rights
- use child labor
- commit cruelty toward animals
When two products or services appear equal, Italian consumers say they opt for the brand that pays attention to the environment (50 percent say this), the rights of the workers (41 percent), and transparency in the production process (35 percent).
Values for a new age
Millennials generally place less importance on a brand’s reputation than older people; only 10 percent consider it the most important driver when making a purchase decision. Innovation (37 percent) and being a sector leader (24 percent) are more often described by Millennials as key factors in their decision making.
To Millennials, violations of human rights are more serious than causing pollution (55 percent say it’s their greatest concern, against 42 percent for pollution). They are tough on brands found to have been cruel to animals, but slightly more tolerant than average of brands lacking transparency and those that have been caught up in scandals. When Millennials shop for personal healthcare products, this is when their sustainability concerns are most sharply focused.
It is essential today that products and brands have a web and social media presence; 60 percent of consumers say a brand’s reputation is affected if they can’t find anything online about them. Even for Millennials, who are less concerned than most with brand reputation, more than three quarters say an online presence is essential.
Who should promote a culture of social responsibility and sustainability, according to Italian consumers? For 56 percent of people, this is a responsibility everyone should share, a view expressed most strongly in the north of Italy.
Then, people consider associations (43 percent) and national institutions (41 percent, more often in the south of Italy and in the small cities) responsible for promoting such a culture. The Millennial view is that European institutions should be key players in promoting a culture of sustainability. Ultimately, Italians assume sustainability is the responsibility of everyone.
The Lorien National Observatory research involved 1,000 interviews in October 2018. Representative sample of Italian population 18+ by sex, age, area and population size of municipality.