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Will U.S. Holiday Shoppers Reward Companies for Doing Good?
Gallup Blog

Will U.S. Holiday Shoppers Reward Companies for Doing Good?

During the holiday season, Americans embrace the spirit of giving. That spirit is reflected not just in a consumer spending surge as people buy presents for loved ones, but also in an increased likelihood to make charitable donations to causes they believe in. Holiday sales represent about 20% of annual retail sales in most industries -- but nearly one-third of annual charitable giving in the U.S. occurs in December. For many Americans, the idea of using their consumer dollars to support companies that are having a positive social impact may be particularly appealing.

The recent Bentley-Gallup Force for Good study found that most Americans are willing to pay a premium for products from companies that have a reputation for doing good. Specifically, majorities of at least 60% said they would be willing to pay extra for a simple consumer good -- a T-shirt -- if the company that made it was known for making a positive difference in four specific areas.

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These findings are all the more noteworthy given that the survey was conducted at a time of high inflation when many Americans were likely particularly price-sensitive.

Younger Americans, Women Most Likely to Say They Would Pay Extra

Most Americans across age groups said they would pay extra if the company was known for making a positive impact on 1) the environment or 2) its local community. However, younger adults -- a key target market for many companies -- were particularly likely to respond this way, at 79% and 82%, respectively. Women were also more likely than men to say they would pay extra for products made by companies that had a positive impact on the environment and on the local community.

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How Much Extra Would Americans Pay?

When people were asked how much they would typically pay for a plain T-shirt, with no additional information or explanation, the median response was $10. They were then asked how much more they would pay if the company was known for each type of positive behavior. People were willing to pay the highest premium -- $7.00 -- for a T-shirt made by companies known to have a positive environmental impact, meaning the total cost would be $17. Having a positive impact on the local community was worth $6 to consumers, while people were willing to pay an extra $5 if the company was known to treat its employees well or contribute to charities.

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Implications

The Bentley-Gallup “T-shirt experiment” shows that, at least in theory, Americans will pay more for a product from a company known to do good things -- an important consideration for companies as consumers decide where to spend their holiday dollars. The results demonstrate that businesses’ financial goals and commitment to making a positive impact can be complementary rather than competing priorities. Americans themselves agree with this idea; in the same study, about seven in 10 said businesses that prioritize making a positive impact on society are just as profitable (47%) or more profitable (22%) than their competitors.

Read more about the findings from the Bentley-Gallup Force for Good Survey.

Author(s)

Steve Crabtree is a Senior Editor and Research Analyst at Gallup. 


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