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15 maltatoday | WEDNESDAY • 01 SEPTEMBER 2021 NEWS EY Future Consumer survey GILBERT GUILLAUMIER THE 4th EY Future Consumer Survey tells us that people are feeling the highest levels of com- fort in carrying out various ac- tivities since the start of the pan- demic – an important outcome from the continued roll-out and take up of the vaccination pro- gramme locally. While current attitudes seem to have become more optimistic, our research in July 2021 indicates several behavioural changes that may have a lasting effect. Around 57% of respondents expect to keep working from home more often, 51% will shop online, and 42% of respondents will replace interna- tional vacations with domestic travel. Spending considerations are also emerging that need to be considered carefully. 64% of re- spondents will focus on value for money, while 34% expect to save more than before the pandemic. 58% say that they will be cautious about their spending. Consumers indicate an evolving perception on company behav- iour, with 25% of respondents saying that companies have a role to play in making positive change and 24% who expect companies to be more transparent about their environmental impact. At a glob- al level, the EY Future Consumer Index suggests 43% of global con- sumers want to buy more from organisations that benefit society, even if their products or services cost more. And 64% are prepared to behave differently if it benefits society. Consumers often say they will pay more for sustainable products and services, but then don't sup- port that intention with action. As the world slowly emerges from the pandemic, there are signs this gap will close. That would create a ma- jor growth opportunity for con- sumer-facing companies. But they need to transform now to seize it. In particular, they need to create products that reflect the nuanced concerns of target consumers, and they need to make sure the busi- ness operations behind the brand meets those expectations too. How can CEOs respond? These five strategies will help your or- ganization give consumers the sustainable products they increas- ingly want, at a price they are will- ing to pay, while meeting their evolving expectations about how companies should behave: Embrace sustainability as a driver of value creation How are you changing the cul- ture in your organization so peo- ple see sustainability as a way of growing the business, finding ef- ficiencies and creating new value pools – not just a cost? Globally, 54% of consumers have reduced or stopped altogether purchasing from organizations they believe acted inappropriately on environ- mental or social issues. This isn't just a turn away from brands that are part of the problem; it's a turn towards those that are an active part of the solution • Position your pur- pose-led brands for growth. Sus- tainability is a differentiating factor that drives growth. Even if most consumers are unwilling to pay more for sustainable brands, they are still more likely to buy them than alternatives. • Invest in sustainable practices that drive efficiency. Products that produce less waste or fewer emissions, and last for longer can drive down costs, mak- ing sustainability more affordable for the consumers. • Create value, don't just avoid harm. The sustainability agenda is focused on reducing negative impacts. But a more re- generative mindset actively cre- ates value. This is about designing new products, services and busi- ness models that can profitably serve people and the planet as part of a circular economy. Take a holistic perspective, but act on what matters to your business How are you balancing the need to track your performance on sus- tainability issues against the need to deliver a broader vision? Indi- vidual ethical, social and govern- ance metrics and targets need to be met, but it's their collective im- pact that drives change. And con- sumers expect you to make a dif- ference on issues that are beyond the traditional remit of a business. For example, globally, 38% say ending poverty should be a prior- ity for their country, the world as well as for businesses. • Think beyond single-is- sue sustainability. Sustainability isn't just about the climate and the natural world. In different markets consumers prioritize diversity, in- clusion, inequality, labour practic- es, health and safety and modern slavery differently. All these issues are important, but companies perform better when they focus on what matters to their specific business activities. • Consider the interde- pendency of issues. Carbon has been the focus of many compa- nies over the last two decades but carbon is linked heavily to other priorities such as waste, water in- tensity, plastic pollution and bio- diversity. • Build expertise but avoid siloes. Sustainability is a complex and involving issue. Your re- sponse needs to be led by people with deep expertise in this rapidly evolving area. But make sustain- ability part of your company cul- ture, not a standalone business function, and embed it into deci- sion-making so everyone is work- ing towards a common goal. Be authentic and be prepared to prove it How are you making your or- ganization more transparent, so people can see what's behind your products and how you really do business? This is an opportunity to lead the market and build trust among the 80% of global consum- ers who expect brands to be trans- parent about their environmental impact. It's important to use the most appropriate data to demon- strate progress and to leverage technology to provide the trans- parency and traceability consum- ers increasingly demand. • Set ambitious, measur- able and credible targets. Com- panies will be punished for vague commitments they can't evidence and for underdelivering against targets that could never realisti- cally be achieved. • Use non-financial KPIs. Measure progress using the most appropriate, clearly defined met- rics that are aligned to your incen- tives. • Be open and honest with all your stakeholders. People will be more forgiving of a company that openly tries to address short- comings than one that brush- es over them with high-profile, low-impact initiatives. Drive positive impact across the value chain How are you getting more vis- ibility into the behaviour of your suppliers and partners and their impact on sustainability issues? Companies set global targets but often must rely on local, piece- meal execution. Many are ex- posed to financial, regulatory and reputational risks from upstream and downstream impacts that they cannot always see or control. Yet 68% of global consumers say businesses must ensure all their suppliers meet high standards of social and environmental practic- es. • Scale successful initia- tives across the business. Leaders need to ensure that high-profile achievements in one function are scaled widely. • Look beyond your im- mediate activities. Companies are judged not just on their own activities but on the impact their products and partners have throughout the product life cycle. Technology-enabled transparen- cy can measure, improve and sup- port more sustainable activities. • Collaborate for systemic solutions. Many companies face challenges that can best be re- solved by working together and sharing responsibility. Find op- portunities to work with others – even competitors – on issues that have a global impact. Re-design your operating model for sustainable execution, then build it fast How are you creating the flexi- bility needed across all your oper- ations to meet and shape evolving consumer expectations around sustainability? This isn't just about reducing cost. For example, 27% of global consumers would pay more for products that ensure safe and inclusive labour conditions and fair employee pay. All these strategies are an oppor- tunity to rethink how you create and measure both value and im- pact. Your operating model needs to efficiently support not one or a few business models, but a plu- rality of new strategies for staying relevant to the consumer. To- morrow's operating model should incorporate these five design ele- ments: • Dynamic ecosystems that foster profitable agility • A listening organiza- tion built on data and analytics for real-time decision making • Talent flexibility that reimagines how people do their work • An innovation plat- form that fosters ideas that can scale • An enduring purpose that drives all decisions and ac- tivities Methodology The 4th EY Future Consumer Survey Malta was carried out in July 2021 across a stratified random sample of 1,038 partic- ipants. The survey is conducted periodically to capture changes in consumption and consumer behaviour. Gilbert Guillaumier is an As- sociate Partner at EY Malta within the Strategy and Trans- actions team Gilbert Guillaumier

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