Consumers consider ethical sourcing when buying goods, OpenText survey says

Friday, 01 October 2021 10:47

Consumers consider ethical sourcing when buying goods, OpenText survey says

By OpenText

GUEST RESEARCH: More than half (57%) of local consumers would never buy from a brand again if it was accused of working with unethical suppliers, according to research findings by OpenText.

The OpenText study says consumers would just seek an alternative brand that engages in responsible sourcing, adding that the pandemic has made them more mindful of the impact of their purchases.

Post-pandemic, 84% of consumers plan to prioritise buying from companies that make it clear they have ethical sourcing strategies in place. This is higher than the 73%, who said pre-pandemic, they prioritised buying from companies with such strategies in place.

The study, which polled 1,000 Australian respondents, highlights the importance for brands in proactively ensuring all suppliers in their supply chain operate ethically.

It considered the extent to which environmentally sustainable and socially responsible business practices matter to the public and influence their purchasing behaviour.

The business case for ethical supply chains

Nearly half (48%) of consumers judge not only the brand but also the actions of its suppliers as well. In fact, consumers place such value on buying from ethical brands that over three quarters (81%) are willing to pay more if they can be sure a product has been ethically sourced or produced.

More than three in ten (32%) are willing to spend between 25% and 50% more for that product.

Purchasing ethically sourced or produced items matters to 77% of Australian consumers, though just under a quarter (24%) admit it has only started to matter to them in the last year or so.

The majority (81%) of consumers are even willing to compromise convenience, such as accepting a slower delivery, if they can be sure an item has been ethically sourced or produced.

Over half (59%) agree they would only opt for this sometimes or for certain items, but more than a fifth (22%) are always willing to make this compromise.

“Creating an ethical supply chain requires having visibility into every supplier,” says OpenText senior vice president and chief marketing officer Lou Blatt.

“The ethically minded consumer is exercising more control over their buying power. Brands can no longer claim they act responsibly if they have no visibility into their operations or those of their suppliers,” Blatt adds.

Rising demand for ethical business principles

When shopping online, 49% of Australian consumers are now aware to purchase locally sourced or produced items to support local businesses and reduce their carbon footprint.

Almost two thirds (65%) of consumers agree businesses have a responsibility to ensure their suppliers abide by an ethical code.

More than half (58%) believe that businesses need to rethink their supply chain if they don’t know where their goods are sourced.

Increased focus on transparency and accountability

Nearly two thirds (61%) of consumers agree government should introduce regulation that holds businesses more accountable for responsible sourcing. The majority (83%) also think online retailers should clearly mark whether or not products are ethically sourced where they can.

More than three quarters (78%) admit that knowing where a product has originated from or where parts are sourced is important to their buying decision.

For the 48%, this information always or often impacts their buying decision.

“Transparency is paramount in building an ethical supply chain, and this can only be achieved through the utilisation of trustworthy information,” concludes OpenText regional vice president business ecosystems George Harb.

“Having full visibility across the supply chain empowers organisations to do more to meet customers’ expectations when it comes to ethical sourcing and practices, and enables them to hold partners and suppliers accountable,” Harb says. “By embracing a single, unified, cloud-based integration platform, organisations will not only optimise the flow of information across the supply chain, but have the transparency to ensure it operates ethically at every stage.”

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