Who are ethical consumers?

Think back to the last time you went shopping. What did you buy?

Perhaps you chose free-range, organic eggs, or Fairtrade coffee from the supermarket. Or when you last bought some new clothes, you opted for a locally made item from a boutique, as opposed to products from a global chain.

If you make decisions like these, then you’re an ethical consumer – and you’re part of a growing group.

The Ethical Consumer Markets Report 2017 published by Ethical Consumer, a UK not-for-profit publication, found that ethical spending was valued at £81.3bn.

But what does it mean to be an ethical consumer, who are they and what do ethical shoppers expect from businesses? We’ll provide more information on these topics to help develop your understanding of this consumer base.

In this article, we’ll cover:

1. What does it mean to be an ethical consumer?

When the phrase ethical shopping is used, it refers to more than only food and fashion. Almost anything that can be bought or used can have an ethical alternative. Examples of types of ethical shopping include:

• Household products
• Cosmetics and toiletries
• Bank accounts
• Travel and holidays
• Technology

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Ethical consumers act and buy with respect for the environment, society, health and planet in general around them. They use their buying power as a form of voting – to show support (or objection of) companies and policies that match or conflict with their values.

Essentially, ethical shoppers ask: what type of relationship do we want with the products and services that we buy?

These consumers think about, and look into, the detailed process that goes into consuming and shopping. It involves thinking about how your day-to-day actions have an impact far away from you, both geographically and socially.

An example of this is examining the supply chain, such as opting for farm-to-table produce that shortens this process as much as possible. Also, it means questioning and verifying the process so you understand it better and know what the impact is of what you choose to purchase.

In addition to conscious consumerism, ethical consumers consider how to reduce or remove the need to buy, with reusing or recycling items where possible.

The voluntary simplicity concept promotes the idea of buying and spending less – or nothing at all – to lower overall consumption levels. An example of this is choosing organic or carbon neutral products. Plus, how a product is disposed of is important for ethical consumers too.

Read more about commercial waste collection options for start-ups with this article.

2. Who are ethical shoppers?

The Organic Market Report 2018, published by the Soil Association, found that people under 35 spent upwards of £3.1m on organic shopping last year.

Often, it’s millennial or younger consumers who are prominent when looking at this consumer base in terms of age.

That being said, ethical shopping requires spending power that may not be available to younger people as much as it is to older people who may be more financially secure.

In addition, there’s some level of cultural and educational knowledge and economic power required and to be aware of how to use this power positively. This level of awareness isn’t open or accessible to everyone, for a number of factors.

In fact, some argue that ethical consumption could be seen as reproducing social inequalities, as being an ethical shopper can be seen as superior to other forms of consumption.

What’s the aim of ethical shopping?

What ethical consumption does try to encourage is a return to community values – so starting a social enterprise could be an ideal business model to target this type of customer. See below for more ethical business ideas.

It’s important to note that ethical shoppers usually focus on a few issues, as it’s difficult to tackle all issues at once, and they can conflict too. Plus, there isn’t a set path of what it means to be an ethical shopper.

For example, some may focus on purchasing cruelty-free toiletries whereas others favour eco-friendly, non-toxic cleaning items. Or for some people it’s wearing clothes that are made from sustainably sourced fabrics.

Ethical shoppers are likely to research or get advice about ethical products and where to find them. Then, once they’re interested in buying, they may ask questions or want further information about products and services.

These customers are socially engaged, and this extends into other forms of consumption too, such as banking choices, as well as supporting campaigns or boycotting businesses that aren’t ethical.

Ethical consumers tend to think about what they consume and participate in at many levels, which can extend beyond shopping. For example, in terms of employment choices, the types of start-ups they run and which companies they support.

Sometimes, though, there may be a disconnect between ethical thoughts and intentions and how these actually translate into taking action.

So, as a business, if you’re saying you’re green, you’ll need to be prepared to support this claim thoroughly. It comes down to really understanding who your particular customer base is – knowing who you’re trying to target and why. This is something to focus on when writing your business plan.

3. How your business can target ethical shoppers

The Ethical Consumer Markets Report 2017 also found that 24% of those surveyed said they had bought products in the last year because of the product’s ethical reputation.

With ethical products gaining popularity, there are a number of ways in which you could start a business that reaches this market. For example:

• Open a vegetarian or vegan restaurant
• Start a bicycle shop
• Open a vintage clothes shop
• Run a market stall in a farmer’s or organic market
• Set up a social enterprise or a charity
• Sell unique or handmade items online

For more information on selling online, check out our step-by-step guide on how to start an Etsy shop.

Think about how your business operates too. This includes considering:

• Accreditation – get your products certified from recognised ethical organisations
• Energy – you could opt for green business electricity
• Pay – ensure you understand the law around fair wages and equal pay
• Supply chain – know where your products come from and how they’re made
• Transparency – be clear and honest about your company policies and processes

In 2018, an online survey by EY found that 78% of shoppers in the UK specifically seek out products grown or made in Britain over imported items.

The research also found that 38% would be inclined to pay up to 10% more for domestic goods than their international counterparts.

Summary

At this point, you’ve learned more about what it means to be an ethical consumer, and who exactly they are. We’ve also looked at what ethical shoppers expect from businesses and how your start-up could match these expectations.

So what’s next? From here, it’s a good place to start thinking about green and social business ideas. Or, if you’ve already started your business, ensure you have a corporate social responsibility plan in place. Good luck!