Ethical Shopping: Why Good Intentions Go Bad Kyle Freund Julie - PowerPoint PPT Presentation

Ethical Shopping: Why Good Intentions Go Bad Kyle Freund Julie Irwin Daniel Zane Kyle Freund Consulting Business, Gov’t & Society Dept. Marketing Department Miami Business School (& Fairtrade America) McCombs School of Business University of Miami University of Texas March 13, 2019 - #SXSW2019 - #EthicalConsumer

Consumers are Terrible • A million plastic bottles are bought every minute; projected to jump by 20% by 2021. • There are more than 2 million children engaged in hazardous work in the cocoa fields of West Africa. • More than 100 million animals are killed in the U.S. every year in chemical, drug, food & cosmetics tests (Peta.com) • Trafficking and forced labor, e.g. Qatar (HRW 2016). March 13, 2019 - #SXSW2019 - #EthicalConsumer

But People are Wonderful • Charitable giving reached $410 billion in 2017 in US (2.1% of GDP) • In 2014, 5,537 people donated one of their kidneys to someone in need. • More than 35,000 in US have donated bone marrow to a stranger (ij.org) • 29% of cats and dogs are adopted from shelters and rescues, 35% of cats are adopted as strays (aspca.org) March 13, 2019 - #SXSW2019 - #EthicalConsumer

Why the disconnect? People see themselves as moral and ethical, but their buying habits say otherwise. Research in behavioral economics can help us understand. March 13, 2019 - #SXSW2019 - #EthicalConsumer

Two behavioral reasons consumers do not reflect their ethics in purchasing: 1. Willful ignorance 2. Faulty interpretation of attributes March 13, 2019 - #SXSW2019 - #EthicalConsumer

My Research: Willful ignorance People often avoid finding out if a product is ethical or not. E.g. If it’s made using child labor or if it has a negative influence on the environment. People will avoid the information even if they would use it if it were available (Ehrich and Irwin, 2005) March 13, 2019 - #SXSW2019 - #EthicalConsumer

Willful Ignorance § Willful ignorance is nonsensical in a rational sense. § The marketplace does not always provide information, however, and this nondisclosure does not seem to hurt companies March 13, 2019 - #SXSW2019 - #EthicalConsumer

Understanding Willful Ignorance § 182 Subjects ( Within subjects ) § Dependent Measures: § Blank matrix followed by § ‘Request’ & ‘Use’ of Attribute conjoint with full matrix Information § Shopping for wooden desk and chair set on 4 Attributes § Workmanship (designer, medium, low) § Comfort (excellent, medium low) § Type of Wood (tree farm, rainforest, combination farm/rainforest) Ehrich, Kristine and Julie R. Irwin (2005), § Price ($750, $550, $350) “Willful Ignorance: The Avoidance of Ethical § Likelihood of purchase Attribute Information,” Journal of Marketing Research , 42 (3): 266-277. March 13, 2019 - #SXSW2019 - #EthicalConsumer

Rank of attribute (higher = used more, requested sooner) • Comparison of Rainforest Attribute ‘Use’ to ‘Request’ 1.9 1.8 1.7 1.6 1.5 1.4 1.3 1.2 Use Request March 13, 2019 - #SXSW2019 - #EthicalConsumer

Importance of Rainforest Wood to the Consumer and Willful Ignorance 3 2.5 2 Use 1.5 Request 1 0.5 0 Low Importance Medium Importance High Importance March 13, 2019 - #SXSW2019 - #EthicalConsumer

Why Avoid? Avoidance Reduces Anger & Sadness 4 3.5 3 2.5 Predicted Sadness 2 Predicted Anger 1.5 1 0.5 0 1 2 3 March 13, 2019 - #SXSW2019 - #EthicalConsumer

What this means & what we can do If consumers knew about it, many would use ethical information • Marketers: Tell people what you are doing right • Governments: Do not expect people to find out who is doing something wrong (or right for that matter). • Consumers: Go find out. • Make yourself find out. March 13, 2019 - #SXSW2019 - #EthicalConsumer

Two behavioral reasons consumers do not reflect their ethics in purchasing: 1. Willful ignorance 2. Faulty interpretation of attributes March 13, 2019 - #SXSW2019 - #EthicalConsumer

Faulty interpretation of attributes • Research on implicit attitudes shows that people associate ethicality with gentleness and lack of ethicality (self-interest) with strength. Luchs, Michael, Rebecca Walker Naylor, Julie R. Irwin and Rajagopal Raghunathan (2010), “The Sustainability Liability: Potential Negative Effects of Ethicality on Product Preference,” Journal of Marketing , 74, 18-31. March 13, 2019 - #SXSW2019 - #EthicalConsumer

Faulty interpretation in action March 13, 2019 - #SXSW2019 - #EthicalConsumer

Ethicality & Functional Performance: Purex versus 7th Generation People worry ethical means not strong, but… March 13, 2019 - #SXSW2019 - #EthicalConsumer

What this means • Sustainable products suffer from ‘Sustainability Liability’. If a product is sustainable, people think it’s not strong. • For products people expect to be gentle (e.g. baby shampoo), sustainable is fine. • For products expected to be strong (e.g. tires), fix the liability by reassuring consumers that the product is strong. • The key is knowing what consumers are worried about… • Do they think grass-fed beef is less delicious? • Do they worry that organic perfumes don’t last as long? • Do they assume sustainable means more expensive? • If you know what they worry about, you can address their fears. March 13, 2019 - #SXSW2019 - #EthicalConsumer

Does our social environment help or hurt ethical purchasing? Our propensity to compare ourselves to others affects ethical purchasing, and perhaps not as expected. March 13, 2019 - #SXSW2019 - #EthicalConsumer

What happens when other consumers seem more ethical than us? How do willfully ignorant consumers respond after seeing these posts? March 13, 2019 - #SXSW2019 - #EthicalConsumer

Two possible reactions when a consumer’s willful ignorance is highlighted by others: • Feel inspired à Moral elevation • Feel threatened à Denigration (Haidt, 2003) (Fein & Spencer, 1997) • When viewing exceptional acts not related • When viewing relevant acts directly related to to something you failed to do something you failed to do! Zane, Daniel M., Julie R. Irwin, and Rebecca Walker Reczek (2016), “Do Less Ethical Consumers Denigrate More Ethical Consumers? The Effect of Willful Ignorance on Judgments of Others,” Journal of Consumer Psychology, 26 (3), 337-349. March 13, 2019 - #SXSW2019 - #EthicalConsumer

Study: Jeans Decision Task • Four brands of jeans differed on four attributes 1) Style: Boot Cut or Regular Cut 2) Price: $65 or $75 3) Wash: Regular Wash or Dark Wash Ethical Attribute Control Attribute 4) Labor Practices of Manufacturer: 4) Delivery Time: OR Employ Child Labor or No Child Labor Three Days or Five Days • Participants freely chose 2 out of 4 attributes to view • One of the attributes they did not view was the focal attribute March 13, 2019 - #SXSW2019 - #EthicalConsumer

If you are a more ethical consumer than I am, you are also… Dependent Variable: Positivity Score of Focal Other (Positive traits – Negative traits) • LESS: 3 • Fashionable 2 • Attractive 1.28 Positivity Score 1 • Sexy • etc. 0 • MORE: -1 • Odd -2 • Boring -2.65 -3 • Preachy Willfully ignored Ignored delivery • etc. ethical attribute time attribute March 13, 2019 - #SXSW2019 - #EthicalConsumer

Social comparisons (especially in the online age) make willful ignorance worse #SXSW 2019 - #EthicalConsumer

Putting down ethical others is a short-term solution with potentially significant future consequences Disparaging consumers who LESS anger towards LOWER Willingness to take consider whether products use underlying ethical issue eco-friendly pledge recycled materials March 13, 2019 - #SXSW2019 - #EthicalConsumer

Might this social comparison issue scale up beyond individual consumers? • Third-party industry reports implicate several companies at once • No need for a single company to change if it isn’t less ethical than others • Implicated companies might find easy ways to distance themselves from firms not in the report (product quality, price, corporate culture, etc.) • Advocacy groups might catch flak in part because audiences feel threatened by their perceived moral superiority March 13, 2019 - #SXSW2019 - #EthicalConsumer

On Social Comparison • It’s hard to feel bad, it’s even harder to acknowledge that you’re feeling bad for deeper-rooted reasons! • Marketers: • Stop social comparisons by providing ethical information from the start • Consumers: • Don’t make others feel bad about their choices • Question your own motives when criticizing ethical consumers March 13, 2019 - #SXSW2019 - #EthicalConsumer

From the ethical trenches Future depends on changing consumption habits. How do we get over these issues? March 13, 2019 - #SXSW2019 - #EthicalConsumer

Ideas for marketers • Consumers do care – they want to do what’s right • Make people feel good • Make it clear on the label, but… • Be authentic & honest – don’t overclaim • Open the door by figuring out what matters • Whether we start introducing more sustainable products or not, we’re all going to have to do better soon. March 13, 2019 - #SXSW2019 - #EthicalConsumer

Stories from the ethical trenches March 13, 2019 - #SXSW2019 - #EthicalConsumer