Has someone ever told you that they chose your business because it hires refugees, sponsors cleanups or is minority owned? According to new Points of Light publication, this customer is using their “purchase power.” Purchase power is “is an individual’s ability and influence when they make decisions around spending or consumption of goods or services.” Increasingly, consumers use purchase power to promote causes aligned with their values. Another Points of Light report on civic engagement found that 41% of adults and 59% of Gen Z in the United States have deliberately used purchase power.
Furthermore, it appears that the pandemic has accelerated the use of purchase power across the globe. An Accenture survey found that consumers "have dramatically evolved": 60% have made more environmentally friendly, sustainable, or ethical purchases since the pandemic started and the vast majority of these conscious consumers plan to make this a permanent change.
The rise of purchase power makes it more urgent that companies establish what values they uphold and what corporate social responsibility (CSR) they pursue. Otherwise, they are forgoing the opportunity to understand, attract and retain customers. Indeed, some companies already work effectively with this force. Target, for example, posts online "gifts that support Black-owned businesses," alongside "gifts for him," "gifts for her," "gifts for your kids."
Another reason to pay attention to purchase power, however, is to minimize the risk of being surprised by the negative side of this force: a boycott. In 2018, for example, a boycott against companies that supported the NRA likely dampened sales and sullied the reputation of Delta Airlines, Enterprise Rent–A–Car, United Airlines, Hertz, Budget, Avis, Best Western, Wyndham Hotels and other brands. It appears that purchase power really does have power. All these brands severed ties with the NRA.
The bottom line is that businesses now have one more trend to follow and manage: consumer purchase power.