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How to build businesses around ethical purchasing needs

Ethical purchases are taken more and more seriously by consumers. Marc Morley, Senior Director, Product Marketing for Business Network, OpenText, explains how businesses can meet this expectation.

It is clear that sustainability is at the forefront of consumers’ minds with a world report showing a staggering 71% increase in online searches for sustainable products globally over the past five years (Economist Intelligence Unit commissioned by WWF).

Even though options to buy were narrowed and pragmatic decisions had to be made at the start of the pandemic, shopping during lockdown across the world has brought out the impact of every person in terms of waste, carbon and social footprint.

In fact, OpenText recently carried out global search with 27,000 consumers proving that the pandemic served as a catalyst; three in five UK respondents said Covid-19 made them more aware of the environmental and social impact of their purchases.

As we head into 2022, businesses need to understand that this increase in ethical buying is something they need to pivot and adapt, or they risk losing customers. It’s an opportunity to build a real competitive advantage and strengthen customer relationships. The facts speak for themselves. Our research has shown that nine in ten consumers (88%) around the world prefer to buy from companies that have ethical sourcing strategies in place. 83% are willing to spend more on a product if they can be sure it is ethically sourced. It is therefore essential that companies examine all of their sourcing strategies as well as their entire supply chain. Ultimately, brands need to proactively implement measures to make their operations sustainable.

So where do businesses even start? How do they establish and implement ethical and sustainable sourcing strategies that are not costly or have no negative impact on the quality of the product or service? Or, if they have already started this journey, how do they effectively revise their current strategies and improve their efficiency?

To start the process, companies need to ask themselves two main questions:

What do my clients value most when it comes to ethical practices?

The motivations of consumers to demand more ethical practices when it comes to purchasing goods can vary. Some consumers may be more interested in working conditions at product manufacturing sites than others wishing to buy locally because they are more concerned about their carbon footprint. Interestingly, our research showed that two-thirds (64%) of 18-24 year olds worldwide would never buy from a company again if they were accused of working with unethical suppliers, versus only two in five respondents (40%) aged 65. or above. Almost two-thirds (62%) of 25-34 year olds say it is important to know where the product they are buying comes from, compared to just 47% of those 65 and over.

What business leaders need to do is examine their own customers and understand their specific ethical purchasing priorities. You can do this by taking a social media poll or a customer survey to find out what they value most about you.

Once you understand what kinds of ethical factors influence your audience and their purchasing decisions, you can more effectively review and proactively implement supply chain practices with this in mind. You should, however, remember to map this to the larger context as well. In fact, consumers believe there are two things every business should be doing; Online retailers should ‘make it clear whether products are of ethical origin’, according to 85% of UK consumers, and 69% agreed that ‘governments should introduce legislation that holds companies accountable for responsible sourcing’.

What is the right technology to drive a supply chain and ethical practices?

Providing an ethical supply chain requires extremely high levels of transparency and end-to-end visibility into an organization’s operations and those of its suppliers and suppliers. It is vital that information is shared throughout the supply chain and by each participant on an ongoing basis. The technology required in a business to achieve this is a digital backbone that enables real-time data sharing and manages data from information capture and exchange to integration and governance across a network. internal systems, cloud applications, trading partner systems and connected devices.

The ethical purchasing opportunity

Businesses cannot ignore the desire of consumers to be able to purchase goods and services ethically. This requires ensuring that sustainability is applied throughout the supply chain – from manufacturing to final delivery – as well as truly understanding the specific needs and wants of your customers.

Most importantly, brands need to be transparent and proactive in meeting these needs and supporting the community as they attempt to reduce their waste, carbon and social footprint through 2022 and beyond.