As the international competition and e-commerce involving, for example, Asian companies are growing, it is important that the Finnish commerce sector identifies its competitive advantages. Responsible commerce may be one competitive advantage.
“During the COVID-19 pandemic in 2020, there have been even surprising changes in the consumers’ attitudes concerning responsibility,” says Jaana Kurjenoja, Chief Economist, Finnish Commerce Federation.
The number of people thinking that they are pioneers of online shopping has increased during the COVID-19 pandemic. Such pioneers have traditionally been extremely price conscious. The possibility to find the cheapest price in the international markets has been a major driver for buying online. They are still more price-driven than the average, but during the COVID-19 pandemic, the importance of the price as the primary factor affecting decision-making has started to decrease: in January, the price was not an essential factor when deciding on a purchase for 13 per cent of pioneers, but the share increased to 17 per cent already by this autumn.
“Price has become a more important factor for women and especially for women under thirty years old. This is most likely due to the decrease in employment for women compared to early winter, with many also having dropped out of the workforce,” Kurjenoja says.
Even though women’s attitudes towards various responsibility themes are generally more positive than the attitudes of men, their attitudes have become more negative during the COVID-19 pandemic in 2020. This change may well be only temporary and at least partly due to the more rapid weakening of employment for women compared to men, with the resulting financial worries also playing a role. When employment improves, attitudes may also change to a positive direction.
Many would like to receive information on ethical products, but only some are willing to pay for them as well
Many consumers would like to buy ethically sustainable and environmentally friendly products and would, therefore, need more information to support their decisions. Of all consumers, a little over 40 per cent would like to have more information to support environmentally friendly and ethical purchases, but only 30 per cent say that they also buy ethically produced products. The share of people who are not interested in this topic is just as large, and there has been no significant change in attitudes during the COVID-19 pandemic.
“People do not want to pay extra for ethical and environmentally friendly products. It is understandable that people who have difficulties in making a living are reluctant when it comes to additional payments, but the others are not too willing to pay either,” Kurjenoja states.
Unlike others, the pioneers of online buying have become even more thirsty for knowledge during the COVID-19 pandemic in spring 2020. In January, 48 per cent of them wanted more information, while in September the share increased to as high as 54 per cent. In addition, the willingness to pay for ethical production has increased among them: 40 per cent are now willing to pay extra for ethical products, whereas in January, the share of people willing to do so was only 34 per cent.
“What we now see in the purchase behaviour of pioneers may be a sign of a broader change in attitudes towards sustainable consumption. Increased desire for knowledge regarding the origin of products and whether they are locally produced and environmentally friendly was also highlighted in a survey we conducted earlier this autumn. Many retailers have already reacted to this change by providing product information more openly and by increasing the share of responsible products they offer,” says Noomi Jägerhorn, Head of Sustainability at Posti.
The changes in the attitudes of online buyers may be a general reflection of a future trend and relatively permanent, and there is no going back to the situation that prevailed, for example, once the COVID-19 pandemic subsides.
“Hunting for increasingly cheaper offers and marketplaces may already be so familiar to them that they have now become aware of their own consumption habits in a new way,” Kurjenoja says.
Even though people are not too willing to pay extra for products that are produced through ethical and environmentally friendly means, they are willing to pay for durable products that can be recycled. Two thirds of consumers are willing to pay more for durable goods. For commerce, it might thus make sense to combine various responsibility arguments with the life cycle and durability of products.
“People are not always willing to pay for ethical or environmentally friendly products of specific origin and for responsible supply chains, but if they are combined with durability, willingness could increase,” Kurjenoja estimates.
“The life cycle of durable products can be seen to be longer, with the increase in peer trading reflecting that. For example, the volume of consumer-to-consumer packages sent through Posti increased by 40 per cent this autumn compared to last year,” Jägerhorn says.
Delivery times are not yet a major factor – will this change with Amazon?
With Amazon entering the Nordic market, delivery times may increase in importance in terms of competitive advantage. So far, delivery times have not played a major role when competing in the Finnish markets, and it is not among the key criteria for consumers when they decide which online store to use. Only a little more than one quarter find delivery times to be essential when deciding on the place of purchase, while 36 per cent find them relatively unimportant.
For pioneers of online buying, delivery times are, however, more important: 42 per cent of them often select the online store based on delivery times.
“One of the major competitive assets of Amazon is an efficient storage and distribution network, through which the purchases of Prime customers, in particular, are delivered quickly. It will be interesting to see whether the importance of delivery times will increase and whether an environmentally friendly delivery method would be a competitive asset in the future. Many consumers are willing to compromise on delivery speed in favour of deliveries that are more environmentally friendly,” Kurjenoja says.
Pioneers are interested in second hand and peer trading
One of the major trends in the commerce sector is the growth of peer trading of used and recycled goods. Some companies in the commerce sector have also started to experiment with a selection of used products in addition to new products. In general, Finnish consumers do not yet feel the need to choose used products, except for the pioneers of online buying, of which 43 per cent already express a wish that they could choose a used product instead of a new one when visiting shops or online stores.
“In addition to many Finnish companies manufacturing high-quality products, such as Iittala, many large international giants from Ikea to Zalando are already interested in a market for used products for their own brand or own online store,” Jägerhorn says.
Particularly younger consumers may have the need to actively buy used products from sources other than from peer markets for consumers, where consumer protection, for example, is weaker than in European commerce.
Finns do not want their online purchases to be overpacked and they also otherwise prefer environmentally friendly materials in packaging. Environmentally friendly packaging is not seen as a choice for which one should pay extra charges but as something that online retailers should do as a part of online purchasing.
“Even though packages are primarily meant to protect goods, products may sometimes be packaged out of habit. This survey clearly indicates that a growing number of consumers already have a different view on this. Many Finnish companies have thus provided consumers with the possibility to choose, for example, between a used and a new package,” Jägerhorn says.
Attitudes of online buyers concerning responsibility 2020/summary (only in Finnish)
For further information, please contact:
Jaana Kurjenoja, Chief Economist, Finnish Commerce Federation, tel. +358 (0)40 820 5378, email@example.com
Noomi Jägerhorn, Head of Sustainability, Posti, tel. +358 (0)50 388 6104, firstname.lastname@example.org