In the UK, the Institute for Fiscal Studies (IFS) reported an initial drop of around 25% in consumer spending over the first three months of lockdown, which restored in July and beyond to a level of around 90% of expected spend in the absence of the pandemic. However, aside from demand-related purchase peaks and troughs, it seems 2020 has seen an already emerging trend expedited by the arrival of Covid-19. According to research by McKinsey, 63% of UK shoppers have changed the stores, brands or the way they shop, adopting new habits to save money and becoming more mindful of how they spend.

EY, in the third edition of its Future Consumer Index, echoed this, stating: “The experience of the pandemic has made consumers more mindful about what they buy and how. They want to know where and how products are made and sourced, about the real cost of what they buy… and demand purposeful brands that reflect their environmental and social values. This consumer demands brands that have a clear purpose that aligns with their values; they reject those that don’t.”

The groundswell of support for frontline workers and the sense of community that emerged at the beginning of lockdown has put many people’s priorities into sharp focus during 2020. Enforced time at home, whether working or not, plus enforced time with (or without) loved ones has shed a different light on how we want to live our lives, compelling us to make choices about how and where we spend.

“Humans need to feel pain before they implement behavioural change,” comments Julietta Dexter, author of Good Company: How to Build a Business without Losing Your Values, and founder and chief growth and purpose officer at brand-building agency ScienceMagic.Inc. “Covid – compounded by the Black Lives Matter movement and the political landscape – has started to impact on consumers at a level where they’ve felt fear and other painful emotions for long enough to make them consider their everyday actions.

“Historically, businesses have operated by creating product, selling it to people, then adding purpose as an afterthought. Pre-Covid, there was a momentum towards putting purpose at the heart of business, but the pandemic has expedited consumers’ demands that business leaders be a force for good.”

Sainsbury’s commitment to “feed the nation” saw the grocery giant innovate initiatives to ensure access to key workers and elderly customers during Covid. It also instigates regular, conversational communications from chief executive Simon Roberts, which made its wider customer base feel warmly towards the supermarket chain.

IKEA has always had a clear purpose, which it set out as “working to create a better everyday life for many people. As a home furnishing store, we do this by producing furniture that is well-designed, functional and affordable”. The Swedish brand underpins this with clear sustainability credentials that place its customers as part of a circular economy, introducing a Buy Back scheme.

In the depths of the pandemic and beyond, successful businesses will be the ones where purpose and people – and that means employees, customers and the wider community – now come first, with the product following. Simon Sinek, author of Start with Why, which explores the psychology of human decision-making and why we buy from some organisations and not others, puts it simply: “It’s not what you do, but why you do it.”

However, reflecting on purpose doesn’t mean sidelining profit. Business is a commercial enterprise, after all. Alex Edmans, professor of finance at London Business School, recently published Grow The Pie: How Great Companies Deliver Both Purpose and Profit. He says that while it’s crucial for companies to serve society, they also have a duty to generate profit for investors – savers, retirees, and pension funds.

There is growing evidence that businesses with a clearly defined purpose to do things right and do things well, offer lower risk to investors and are more likely to reap the fiscal rewards of that corporate responsibility. According to Deloitte, “Purpose-driven companies witness higher market share gains and grow three times faster on average than their competitors, all while achieving higher workforce and customer satisfaction.”

Indeed, Larry Fink, chairman and CEO of $6.5trn (£4.9trn) asset manager BlackRock Inc, took the decision to solely invest in businesses operating with authentic and solid ESGP (environmental, social, governance and purpose) credentials. He communicated this in a letter to CEOs in January 2019, stating that the “purpose is not the sole pursuit of profits but the animating force for achieving them”.

There is a plethora of brands that have raised the bar over recent years, driving a purpose-driven economy: The Body Shop, Patagonia, Allbirds and Toms are obvious examples. Gemma Moroney, co-founder and behaviour designer at agency Shook, explains that heritage brands and global behemoths can and should operate with purpose. “If you look back, Unilever, which began as Lever Bros, was originally built on the promise ‘to make cleanliness commonplace; to lessen work for women; to foster health and contribute to personal attractiveness, that life may be more enjoyable and rewarding for the people who use our products’.

“When he was appointed as CEO in 2019, Alan Jope started culling brands in the Unilever portfolio that are not able to stand for something more important than just making your hair shiny, your skin soft, your clothes whiter or your food tastier.”

“You can’t just align with initiatives by putting money into something: you have to back your chat,” adds Katy Stolliday, co-founder of ESGP creative consultancy Blurred, which works with clients such as BT Group, Lidl, Coca-Cola and Nomad Foods (Findus, Birds Eye, Aunt Bessie’s). “Traditionally, businesses have looked at their own corporate and reputational risks: actually, they need to get their own house in order and assess what risk they put out into the world. The essentials of being a responsible corporate citizen – minimising carbon and environmental impact, respecting human rights, transparent and ethical supply chains, for example – are fundamental to good practice, and if those aren’t in place, employee activists and consumers will call out businesses.”

As consumers reconsider their spending power in a post-Covid world they will be actively seeking out businesses and brands that operate with purpose, perhaps demonstrating a comprehensive set of credentials by acquiring B Corp certification – a corporate badge of honour that is beginning to act as a consumer benchmark in the way that Fairtrade has become a conscious choice for some shoppers.

As Unilever’s Jope told Bloomberg recently: “Our company is guided by three deeply held beliefs: that brands with purpose grow, companies with purpose last, and people with purpose thrive. And we think that refrain is going to be even more relevant in a post-coronavirus world than in a pre-coronavirus world. So, we will not waver one iota in our commitment to purpose-led business.”