What is ethical consumption, and why is it important?
Ethical consumption is the conscious and intentional purchasing of goods and services that align with consumers' values and beliefs.
It considers the environmental, social, and ethical impact of products and services we buy and consume. It also involves supporting companies and practices that promote fair trade, social responsibility, and sustainability.
Ethical consumption empowers consumers to make a positive impact through their purchasing decisions and holds companies accountable for their impact on people and the planet. It also helps to promote a more sustainable and fair global economy and encourages businesses to adopt more ethical and responsible practices.
Why Gen Z is leading the charge in ethical consumption
Gen Z refers to people born between the mid-1990s and early to mid-2010s. They were born after the mass adoption of the Internet, making them the first generation to grow up with both social media and digital technologies as a central part of their lives.
Gen Z has been exposed to a wealth of information about the impact of consumer choices on society and the planet since they were young.
Continuous access to information has shaped Gen Z into a generation that's passionate about using their purchasing power to make a positive impact on global issues. As consumers, 4 in 5 (82%) of Gen Z want brands to take a stand on social issues, while 73% of Gen Z will only buy from brands they believe in. Gen Z is even willing to pay a higher price for ethical and sustainable products or services, and is prepared to boycott unethical brands.
The influence of technology and social media on Gen Z
The Internet and social media have become a key part of daily life for Gen Z. The rise of digital technology, including artificial intelligence, cloud computing, the Internet of Things (IoT), and social media, has given this generation unparalleled access to information and experiences. This enables them to understand the environmental and social impact of their consumer choice.
Today, it’s much easier to access news and information from various sources, giving Gen Z a broader perspective on the world and the issues that matter to them. They can easily research and compare brands, products, and services at the touch of a button. This technological evolution has facilitated greater transparency and accountability in business practices, enabling consumers to scrutinise companies' supply chains and production methods and demand greater ethical responsibility.
Social media platforms are a popular place for this generation to express opinions and ideas, discuss social issues and hold brands to account. While they utilise social media to create global communities and connect with like-minded people, they’re also prepared to use it to take collective action on the global issues they believe in.
However, Gen Z's demand for more meaningful online interactions is also creating a social media transformation. While 94% of Gen Z use social media, they are increasingly moving away from some of social media's oldest and biggest platforms, such as Facebook, in favour of Snapchat (96%), TikTok (91%) and YouTube (87%). This has also seen a wave of new platforms emerging in response, offering more authenticity and simplicity. For example, the messaging and voice app Discord launched in 2015 and has grown to 300 million registered accounts and 140 million active users.
Furthermore, this continuous exposure to innovative technology has created a generation comfortable with online transactions and mobile payments. This has led to an ecosystem of always-on retail and, along with it, an ecommerce boom. In 2021, global e-commerce sales generated 21% of total retail sales, up from 15% in 2019.
Gen Z's impact on ethical consumption
Gen Z's conscious purchasing decisions and online and offline activism have already begun to impact ethical consumption. For example:
Increased demand for sustainable products
Gen Z's concern for environmental and sustainability issues has led to increased demand for products and brands that are ethical and sustainable. They are also willing to pay 10 percent more for products produced ethically or made from sustainable materials.
Change in buying habits
While Gen Z remains a significant consumer demographic responsible for driving growth, their buying habits influence millennials (born in the early 1980s to mid-to-late 1990s). Between 2020 and 2021, 39% of adults purchased fewer items than the previous year, fuelled by Gen Z and younger millenials.
Brand boycotts
Gen Z is becoming increasingly aware of their purchasing power and how to use it to hold brands accountable. For example, in 2020, Shein experienced a significant drop in sales in several countries. This was a result of a Gen Z-driven social media boycott campaign over allegations the fast-fashion brand stole designs from independent designers, exploited its workers, and violated human rights.
Gen Z strongly focuses on social and environmental issues and will likely want to purchase from brands that align with their values. By understanding Gen Z's preferences and their impact on ethical consumption, businesses can make informed decisions about gaining the trust and loyalty of this valuable and influential market and meeting their expectations.
Having an awareness of your brand’s digital carbon footprint plays a part in this. Gen Z may avoid purchasing from brands that don’t mitigate the impact they have on the environment and reduce their carbon footprint. Gen Z is demanding that organisations promote sustainable practices and responsible behaviours, and will impact their purchasing decisions.
The carbon footprint of digital technologies and advertising
There are several ways in which digital technology and advertising contribute to higher carbon emissions. For example:
- Energy consumption of data centres - Data centres are responsible for storing and processing data. Data centres consume 3% of the world's electricity and this is predicted to reach 4% by 2030.
- Digital advertising accounts for 4% of global greenhouse gas emissions, due to the energy consumption of data centres, the devices used to access and view digital ads, and the energy consumed to produce and distribute physical advertising materials.
- Manufacturing digital devices such as laptops and smartphones involves energy-intensive manufacturing processes and mining raw materials. This has various environmental impacts, such as increasing carbon emissions, water pollution, and the destruction of habitats.
- Electronic waste - Digital devices typically have fairly short lifespans and frequently end up in landfills. The decomposition of materials and releasing toxic substances contribute to carbon emissions.
There are several ways that brands can adopt greener practices. For example:
- Power data centres with renewable energy sources such as wind or solar power.
- Consumers can extend the life of their electronic devices by repairing and upgrading them instead of buying new ones.
- Device manufacturers can switch to more sustainable materials and manufacturing processes.
- Consumers can change their digital habits by reducing unnecessary digital usage and opting for lower-quality video settings.
- Streaming companies can switch to more efficient video compression technologies.
The role of technology in promoting ethical consumption
Gen Z is a socially-conscious and digitally-savvy market that values transparency, diversity, and environmental responsibility. There are several strategies businesses can adopt to align with these values and help them attract Gen Z consumers and gain their loyalty. Here are some examples:
- Emphasise ethical and sustainable values - Focus on the issues important to this consumer group and demonstrate your commitment to them.
- Utilise social media - If it makes sense for your business, invest in social media, develop a strong presence, and engage with your audience across platforms such as TikTok, Instagram, and Snapchat.
- Offer unique customer experiences - Create unique and memorable customer experiences such as personalised products and services, interactive events, and pop-up stores.
- Be genuine - Be honest and transparent with customers about your products, services, supply chains, practices, and values.
- Celebrate diversity - Strive to be diverse and inclusive across all your marketing campaigns.
Technology is already facilitating ethical consumption in various ways, for example:
- Ecommerce platforms such as eBay, Amazon, and Etsy are providing information to customers on the ethical and environmental impact of products.
- Apps such as DoneGood and Good On You provide product reviews based on ethical and environmental impact.
- Blockchain technology provides supply chain transparency, enabling customers to track a product's journey from source to consumer.
- Social media hashtags such as #ZeroWaste, #PlasticFree, and #SustainableFashion help engage users and promote ethical and sustainable products.
- Augmented reality (AR) technology enables consumers to experience products before purchasing to reduce returns and avoid waste.
- Apps such as Good Maven and Too Good To Go help consumers reduce food waste by purchasing leftover food at a discounted price.
The top ethical consumerism trends for Gen Z buyers in 2023 and beyond
Ethical consumer trends are driven by a shared desire to improve the world. As ethical consumerism becomes more mainstream, several emerging trends are expected to dominate in 2023.
Plant-based products
To align with Gen Z's values around animal welfare and sustainability, we can expect to see an increase in demand for plant-based products - as Gen Z consumers become more aware of the impact of animal agriculture on the environment. 3D printing of plant-based meats is expected to become a $140 million industry by 2029.
Circular economy
Gen Z's focus on reducing waste and sustainability will drive the circular economy, which promotes a re-use and recycling philosophy to reduce waste. Blockchain technology can help consumers track the entire supply chain of recycled materials to ensure their ethical sourcing and authenticity.
Local, small-scale production
With 75% of Gen Z consumers intending to prioritise buying from local and small businesses as much as possible in the future, 3D printing and on-demand manufacturing will enable the small-scale production of goods and reduce the need for large-scale supply chains.
Transparency
As Gen Z increasingly pressures businesses to measure and disclose their carbon footprint, brands will increasingly invest in blockchain and augmented reality to provide greater transparency to consumers about their production and supply chain practices.
Minimalism and simplicity
Gen Z consumers embrace minimalism and a simpler, more sustainable, less wasteful lifestyle. This trend will drive the demand for durable products designed to last. This will see more businesses turn to technology like 3D printing to create customisable and long-lasting products that don't need to be regularly replaced.
Looking forward to 2024
As Gen Z's buying power grows, its values will continue to impact ethical consumption and consumerism in 2024, and Gen Z's passion for sustainability, health, wellness and social justice will likely shape their purchasing decisions in the future.
Companies wishing to tap into this lucrative market and gain a competitive edge must prioritise ethical and sustainable practices as Gen Z consumers focus more on finding products and services that closely align with their values.
There may also be a larger focus on locally-produced products or supporting minority-owned companies.
The relationship between technology and ethical consumption could also come to the forefront, with blockchain technology increasingly used to increase supply chain transparency or use emerging technologies to develop new sustainable materials.
Creating a sustainable future: How Gen Z buyers can drive change through ethical consumption
As we've seen, Gen Z can play a huge role in using ethical consumption to create a more sustainable future. Gen Z is passionate about environmental and social issues and they are becoming increasingly influential consumers. They’re already using their purchasing power to drive demand for products produced ethically and sustainably, signalling to brands that ethical and sustainable practices should be a priority.
With technology having a key role in Gen Z's drive for ethical consumption, here are things your business should consider incorporating:
- Sustainable production - Look at how your business can use renewable energy, eco-friendly materials, and sustainable production methods to reduce its carbon footprint and environmental impact.
- Transparency - Provide transparent information on your production methods and the business's social and environmental impact.
- Ethical sourcing - Ensure your suppliers and partners always adhere to ethical standards and have a responsible sourcing strategy.
- Digital innovation - Invest in digital technologies that help your business deliver a seamless and personalised customer experience and provide transparent supply chain tracking.
Your business can also make use of the latest technologies to accommodate Gen Z's ethical consumption preferences. For example:
- 3D printing can create custom-made products, clothing and even food while helping to promote sustainability and reduce waste.
- Smart home technology can help consumers reduce their energy usage.
- Mobile apps provide consumers with information about a product's sustainability credentials or impact on human rights.
- Blockchain technology enhances supply chain transparency.
In conclusion
Gen Z is undoubtedly leading the charge in ethical consumption. Driven by a concern for sustainability, the environment, and social justice, this generation harnesses technology to research ethical and sustainable productions, monitor their carbon footprint, and make greener, more eco-friendly consumer and lifestyle choices.
Prioritising ethical consumption is becoming increasingly important for driving change towards a more sustainable future.
As we continue to face significant social and environmental challenges worldwide, ethical consumption is an important tool to help consumers positively impact society and the planet. It's up to all of us to play a part and prioritise ethical consumption, but Gen Z are taking the lead in showing how we can use technology to support this goal.
How DCX can help
From creating personalised digital experiences, , managing millions of customer data records from across multiple sources and locations, to delivering multi-channel messaging and improving customer service, DCX can help your business implement digital technologies more sustainably to meet the demands of today’s ethical consumers and in years to come.
Get in touch with us today to find out more about how we can support your business with our range of capabilities.
