Purpose-Driven Brands See a 3x Return on Investment
Purpose-driven brands are proliferating alongside the expansion of ecommerce and becoming increasingly popular with consumers. A recent study by Accenture highlighted that 63% of consumers prefer to purchase products from a brand that stand for a mission or purpose that resonates with them. Purpose-driven brands are defined as those that consistently place the “why” in their communication and advertising efforts.
While the distinction between purpose-driven, sustainable, organic, and other similar terms is not always clear, an easy way to tell if a brand is purpose-driven is that it places an either altruistic or otherwise not commercial goal prominently on its website. Being purpose-driven can manifest itself in the form of a particular mission or in the consistent (not one-time promotional) commitment to donate proceeds, goods, or services to a specific cause in connection with a purchase.
"At Jonas Paul Eyewear, preventing childhood blindness is a passion that inspired us to create our business. And we are not alone, as today's consumer, more than ever, wants their purchases to make an impact, and are much more loyal to brands that are socially conscious." - Ben Harrison, CEO of Jonas Paul Eyewear
Brex analyzed the ecommerce businesses using its credit card and split them into two categories— those highlighting a non-commercial purpose on their primary website and those not doing so. The first group, purpose-driven brands, spent an average of 8% of their monthly sales on advertising and marketing expenses such as online ads, print ads, and outdoor advertising. The second group, those not highlighting a specific purpose on their websites, spent 3x more, with an average of 24% of their monthly sales on advertising and marketing.
While correlation does not necessarily equal causation, the marked difference in advertising does suggest that purpose-driven brands are seeing a considerable ROI for the efforts they drive into highlighting the purpose of their brand. Potential drivers of this could be enhanced word-of-mouth, referral and press — each a largely free avenue for customer growth — taking the place of paid marketing channels.
Interestingly, purpose-driven brands are common across all areas of ecommerce. According to Brex data, the top three most popular types of ecommerce brands to be purpose-driven are Food & Beverage, followed by Accessories and Home & Furniture. Interestingly, Pet Care has among the fewest purpose-driven brands, despite the high emotional attachment people often maintain with their pets.
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