With the holiday shopping season underway, many are making a list and checking it twice. While some may want to focus on shopping ethically this year, a University of Guelph marketing researcher says higher prices could get in the way of that goal.
Dr. Jing Wan, a professor in the Gordon S. Lang School of Economics who studies ethical and sustainable consumption, says many customers claim they want to support products made in Canada or with fair labour, or using environmentally friendly practices. “But sales data shows these good intentions rarely translate into actual purchases,” she says.
So, what’s stopping people from following through on these goals? Cost.
“Ethical products tend to be more expensive than their conventional counterparts,” Wan explains. “These higher prices reflect the added expenses of fair wages, sustainable materials, and certification processes. However, because consumers don’t directly benefit from these ethical efforts, many struggle to justify paying the extra cost.”
When out shopping, particularly during the busy holiday season, many customers tend to weigh prices over altruistic values, Wan says. “As a result, even people who care about ethical issues often end up choosing the cheaper, conventional option to get more value for their money.”
Could smaller quantities sway shopping habits?
Wan recently co-authored a paper on costs and ethical consumption, exploring how lowering the quantity of an ethical product could make people more likely to purchase it.
“Consumers tend to focus more on price than quantity when deciding what to buy,” Wan says. “Even though price and size go hand in hand, most shoppers are drawn to the number they see on the price tag, less toward the amount of product they are receiving.”
Therefore, Wan’s research suggests companies can encourage ethical consumption by changing how products are priced and presented. Rather than charging more for ethical products, retailers could instead offer products at the same price as conventional products, but in smaller quantities.
“We find that consumers are more willing to pay the ethical premium by accepting less quantity than spending more money,” Wan says. “Framing the trade-off as a choice between quantity and ethicality, rather than cost and ethicality, reduces the sense of a price gap and makes ethical products feel more affordable, even though they still cost more per unit.”
Wan is available for interviews.
Contact:
Dr. Jing Wan
jingwan@uoguelph.ca