Wealthy Consumers Put Less Value on Social Responsibility
Regardless of how much money they have, only 39 percent of wealthy Americans are willing to pay more for products made by social responsible companies, new research shows.
The study by the New York-based Luxury Institute revealed that while nearly half of wealthy consumers acknowledge they seek out brands with high ethical standards, such as Apple, BMW, Coach, Lexus, Mercedes-Benz, Nordstrom, Starbucks and Whole Foods, only 39 percent would be willing to pay a premium for their products.
That's down significantly from 2007, when 56 percent of affluent shoppers were willing to pay extra for socially responsible products.
"Even wealthy consumers have de-emphasized social responsibility as this economy focuses everyone on price/value and away from social issues," said Milton Pedraza, the Luxury Institute's CEO. "Nevertheless, we see that luxury and premium brands that are socially responsible do better even during recessions because doing well by doing good is a universal and timeless concept."
When it comes to learning about sustainable brands, the research shows increasing numbers of wealthy Americans are turning to social media.
Nearly 30 percent of rich shoppers learn about companies' socially responsible behavior via Facebook or Twitter, up from just 8 percent five years ago. Reading news articles is the most popular way to learn about corporate social responsibility efforts.
The study, "Corporate Social Responsibility: The Wealthy Consumer's Viewpoint," was based on surveys of consumers who earn an average income of $307,000 and have an average net worth of $3.1 million.