Some of the most popular narratives about millennials are that they don’t buy cars or diamonds, they prioritize experiences over possessions, and they will never own a house due to expensive brunch habits. Meanwhile, the Gen Z cohort is painted as being entirely addicted to their smart phones, valuing social media interaction over real-life connections and only ever shopping online.
However, a look beneath the surface shows it’s not all about avocado toast and Snapchat for millennials and Gen Z. Even as some new insights about millennial and Gen Z consumer habits emerge almost every week, one trend remains consistent. Both groups have high expectations of companies to address important social and environmental issues—and any brand that targets either (or both) of these demographics ignore CSR in their supply chain at their own peril.
What millennials and Gen Z Expect when it comes to CSR
Up to 87 percent of millennials and a staggering 94 percent of Gen Z expect companies to address pressing social and environmental issues. As a rule, there isn’t just one issue the younger consumers care about, but a plethora: from poverty and hunger, economic development, job creation, health and education, to an array of human rights issues including women’s rights, LGBTQ+ rights, racial equality, immigration, and gun control, to environmental preservation and climate change.
The main reasons millennials and Gen Z consumers are, on average, concerned with a higher number of social issues than previous generations may have been, lie in the social and economic environments they grew up in. For instance, the formative years of most millennials took place in the era of unprecedented globalization and child labor scandals, and they were the first generation to grow up with “cause marketing” carried out by companies in support of a wide variety of causes, from anti-trafficking to world hunger. Meanwhile, Gen Z, being a generation brought up with recycling programs, climate change curriculum and diversity education, is a highly empathetic and socially conscious group. Should any older-generation executives decide to write these people off due to their youth, they would be making a big mistake: recent public protests and campaigns show people not old enough to drive or buy alcohol can become leaders in causes that strive to change the world for the better.
Having grown up in a world where social upheaval is frequent and the power of corporations obvious, millennials and Gen Z took the next logical step, and almost unanimously declared that with such great power comes great responsibility. In their view, businesses must do more than make a profit—but also make a positive difference.
The good news for socially responsible brands
If your brand has strong CSR credentials, you are much more likely to attract millennial and Gen Z consumers. Understanding the importance of voting with their dollars, 91 percent of millennials and 90 percent of Gen Z are more willing to purchase products with a social or environmental benefit. However, repeat business from them is not a given: not only would these consumers readily switch brands in favor of one associated with a good cause, they are more likely to be neutral when choosing between brands and private labels. Even good marketing is not a magic bullet here because 84 percent of millennials “just don’t trust” traditional advertising, and only 1 percent said a compelling ad would make them trust a brand more.
The takeaway is: if you want to win and retain millennial and Gen Z consumers, your business should put its best socially responsible foot forward. But make sure your efforts are genuine; you don’t want your brand to be accused of “goodwashing”—a term for actors that try to communicate positive themes without substantive action behind them, thus capitalizing on issues without supporting actual change.
Making the best of social media
Stereotypes aside, it’s a fact that millennials and Gen Z are the most connected generations to date. They spend at least six hours a day on their mobile phones, and a recent U.K. study found that millennials spend an average of 8.5 hours a day reading, watching, creating and engaging with content on their devices—while for Gen Z, the number was a whopping 10.6 hours.
However, social media is more than just a source of entertainment and recreation for millennials and Gen Z. It’s also a key outlet for their activism: over three-quarters of both demographics regularly share social or environmental information with their social networks. They also like to leverage social media for interaction with their preferred brands, and are looking for some transparent and authentic communication—not purely promotional content. In fact, being transparent on social media is one of the best things your brand can do when it comes to building a relationship with the younger consumers, as they are more willing to forgive a company that owns up to its errors and pledges to do better, while deceptive practices will earn you negative word-of-mouth or even product boycotts.
Key considerations for building an ethical supply chain
Younger consumer demographics actively seek out ethical labels and cause-oriented companies, and open their wallets more readily for ethically sourced goods. Therefore, if you’re looking to build a stronger relationship with your millennial and Gen Z consumers, building an ethical supply chain is an important step.
Making meaningful progress toward transparency and social responsibility in your brand’s supply chain requires active engagement and follow-up: from auditing and corrective action, to regularly re-auditing and monitoring the findings.
Here are some of the best practices for building a supplier audit program that can drive meaningful improvement in your supply chain:
- Total supply chain transparency. Audits should not only ensure ethical compliance, but also verify the GPS coordinates of finished goods against the factory coordinates, to prevent unauthorized subcontracting.
- Real-time supply chain intelligence. Online supplier management provides brands with a centralized platform to track KPIs and high-risk issues, helping them make better sourcing decisions faster. Online reports should include clear grading and category scoring, plus benchmark data by country and industry, for easy comparison.
- Closed-loop audit protocols that include a corrective action plan. Too many disasters result from problems that were identified but never fixed. Having a defined follow-up strategy is crucial to ensuring issues are actually solved.
- Long-term collaboration and communication. Suppliers that enjoy a long-term productive relationship with their buyer are much more likely to make lasting changes and invest in meaningful improvements resulting in greater worker safety and superior product quality. Cooperation and open communication consistently yield better results than the old “comply or die” approach.
- Supplier training. Regular supplier workshops are a great tool that connects all relevant parties, such as the buyer, the supplier and the third-party audit provider. This is the buyer’s opportunity to directly connect with the supplier’s management and explain the reasons behind the compliance requirements; while the audit provider can help educate the supplier on the practices necessary to close the gap.
- Follow-up and factory improvement. Audits, while being crucial for fact-finding, are only the first step. Improvement in the long term hinges on regular follow-up during the implementation of the corrective action plan. Proactive compliance solution providers offer factory improvement programs that drive improvement in real time, analyze the underlying causes of non-compliances and help the supplier take measures to rectify and prevent them.
Sebastien Breteau is the founder and CEO of QIMA (formerly AsiaInspection), a leading provider of supply chain compliance solutions, that partners with brands, retailers and importers to secure, manage and optimize their global supply network. QIMA has on-the-ground presence in 85 countries, combining industry-leading experts for onsite inspections, supplier audits and lab testing with a digital platform that brings accuracy, transparency and intelligence for quality and compliance data. For all our clients in 120 countries who use the QIMA platform and benefit from 24/7 support in over 20 languages, QIMA is Your Eyes in the Supply Chain™.