Unveiling the halo effect: investigating the impact of organic labels on consumer behavior within the organic cosmetics segment

Abstract

The study aims to explore how organic labels influence consumers’ behavior through perceptions of products, specifically in the context of organic cosmetics. Investigating organic labels within Vietnam's cosmetics industry is necessary due to the significant market trend, where the value is expected to soar from $39.56 million to $67.39 million by 2027, highlighting labels' potential to sway the surging consumer interest and propel market growth. The focus is on how consumers perceive the health, safety, environmental friendliness, animal welfare, and overall quality of products with organic labels. Essentially, when a consumer sees an organic label, it activates a network of related concepts ins their memory, leading them to have a more positive attitude towards the product and a higher likelihood of buying it. Although previous studies have examined this topic in the context of food, beverages, and consumer goods, this particular research focuses on organic cosmetics. This research was conducted from June to November 2023 among consumers in Ho Chi Minh City and was analyzed using both qualitative and quantitative methods. This dual approach sought to verify the organic label’s halo effect in the cosmetics context. Subsequently, the Partial Least Square – Structural Equation Model was utilized to validate the fit of the research model and its hypotheses. The results showed that organic labels increased perceptions of health, safety, environmental friendliness, animal welfare, and quality. These perceptions, in turn, influence actual consumer behavior through increased purchase intentions for products with organic labels. This research is significant as it provides insights into the importance of organic labels in influencing consumer choices in the cosmetic industry. It’s not just academic; marketers and policymakers in the beauty sector can benefit from these findings, highlighting the role of labeling in shaping consumers’ decisions. This study also contributes to broader discussions about consumer behavior, sustainability, and the power of labeling strategies in influencing consumer choices.