Can Consumer Conscience promote Green Business?

The spontaneous answer is Yes and No. Sounds frustratingly like political speak. No wonder the green sustainability journey feels more like an obstacle course than a sane path to a secure future. Some insight can be gained by unpacking the question of consumer influence. Re-Thinking Consumption a survey completed by the Regeneration Road Map Project in November 2012 is worth a closer look (see links below). The survey identifies 4 types of consumers and provides clues to their response to and influence on products. Through an assessment of what motivates concerned consumers, their potential to support `green’ products and environmentally friendly business practice is identified.

I have to say at the outset that the Re-Thinking Consumption survey appears to be more about greener consumption rather than less consumption. One of the key strategies arising from the survey is a marketing approach that promotes responsible consumerism through the development of green brands. Are green brands a vehicle to move consumers from a `born to shop’ to a buy just what you need mentality? I received an uncomfortable personal prod when I read that the green Advocates (the consumer type I identify with) have little influence on business / companies for two simple reasons – we don’t consume enough and apparently our membership is not growing enough to be a significant influence on business. But I am jumping the gun…

Chicken or Egg – What comes first Green business or Green consumers?

Most businesses wanting to switch to green products and an environmentally sustainability business practice are battling for a number of reasons. Firstly, the number of consumers willing to pay more for an accredited green product or service hits a ceiling at 15% – and has not changed in recent years. In addition the recession is threatening the switch to green products by putting pressure on consumers to buy cheap now rather than worry about future eco consequences. Does a critical mass of green consumers come from companies promoting green products or from concerned customers pulling them? Although awareness about environmental issues is at an all time high, according to the Regeneration Road Map Project corresponding green action is still low. More worrying are increasing reports that people are switching off to depressing news of environmental degradation and disasters and simply ignoring them. It is not surprising that companies struggling with understanding their own sustainability issues are battling to identify and respond to the shade of green of their potential customers.

The Role of the Consumer in an Environmentally Sustainable Economy!

In response to the questions that businesses were asking about green consumer behaviour, the Regeneration Road Map Project initiated an online survey of 6224 consumers in the USA, Brazil, UK, Germany, India, China. (Africa is absent / omitted!!) The focus was to understand consumer attitudes, motivation and behaviour and to bring the consumer voice into green business practice by exploring consumer priorities, engagement pathways, issues of company transparency, social issues and consumer advocacy. Note that the survey asked consumers their opinions but did not record actual behaviour.

Summary of the Key Findings of Rethinking Consumption:

1 Consuming less and different rather than more: The good news first. 66% of the respondents claimed that we need to consume a lot less for the sake of the health of the environment for future generations.

2 Green Demands especially in Emerging Markets: Consumers in Brazil, China and India (51% ) are twice as likely as those in Germany, the UK and USA (22%) to report that they purchase products because of environmental and social benefits.

3 Price, Performance and Credibility are key to Responsible Consumption: 75% of consumers surveyed agreed they would purchase more environmentally and socially responsible products if they “performed as well, or better than products they usually buy”. 70% said they would “if it did not cost more”. 64% said they would if the “health and environmental claims were more believable”. (Eds comment: This is inconsistent with the ceiling of only 15% of consumers actually paying more – but it at least demonstrates a greater awareness of the need for responsible consumption.)

4 Top Issues Consumers want Companies to address: 92% of those surveyed say “it is very important for companies to address `safe drinking water’ as part of their products, services or operations followed by health care (87%), fair wages and safe working conditions (87%), jobs and economic opportunity (86%) and waste reduction (86%)”. (Eds comment: The focus on human health and safety potentially provides a strong connection between our and the Earth’s health and safety.

5 Being part of a sustainable green solution: 67% of those surveyed expressed “interest in sharing their ideas, opinions and experiences with companies and to help develop better products or create new solutions.” (Eds comment: The old take it or leave it top down model is being challenged as consumers become more actively involved and call for business’s claims about products to be credible and their operations to be more transparent.)

Four Consumer Groupings identified by Survey

6 Identification of consumer sets: Statistical modelling of the survey results revealed four sets of consumers on the green sustainability spectrum, namely:

Committed green Advocates make up the smallest group, only 14% of those surveyed. They believe that individuals have the responsibility to purchase products that are good for the environment and for society and are willing to pay more to do so. They are the original green consumers, are generally well informed, sceptical and vocal. Their support for genuine green products carries a lot of clout but equally false claims can result in the Advocates generating a lot of bad publicity for a company.

Style and status seeking Aspirationals make up the largest group, at 37% of those surveyed and the majority of their members come from India and China. These developing world consumers are concerned about social and environmental issues but want to express their status and style through material possessions. They love to shop and are more likely to be influenced by branding than the other groups – especially if the brands connect them to a peer group who share similar values. .

Price and performance minded Practicals represent 34% of consumers surveyed. They are price adverse and are generally sceptical of companies’ environmental and social claims. For the Practicals, proven products are important and environmental and social benefits are viewed as add-ons. However they could readily shift and help to mainstream green products if they are convinced about price and quality.

Less engaged Indifferents fortunately make up only16% of those surveyed. They look primarily for convenience when choosing products and are sceptical about green issues claiming that the concerns are exaggerated. Only one in four Indifferents said that they feel guilty about their impact on the environment and they generally believe that individuals have little influence.

7 A Growing Tension between money and possessions vs time and happiness. Respondents stated overwhelmingly that “friends and family are the most important thing in life” (85%). A closer look reveals an interesting conflict. Consumers in developing markets (62%) are twice as likely as those in developed markets (28%) to prioritize “time with people and projects I care about over income”. But they are also twice as likely to say “having a lot of material possessions is important to my happiness” (49 to 23% respectively). (Eds comment: This tension is best illustrated in the description of the values of the so called `Aspirational’ set of consumers from Brazil, India and China. )

8 Aspirationals as a clue to responsible consumption: Aspirationals are the largest consumer set and significantly are dominant in India (42%) and China (53%). Aspirationals look for brands that reconcile their aspirations for social status and material things with their desire to be socially and environmentally responsible and accepted.

Strategies for Businesses / Companies arising from Rethinking Consumption:

With the world’s economy about to hit `Peak Everything’ and a growing consumer pressure to include the Environmental and Social costs of production into the price ensuring that products are affordable is likely to be a challenge. The following strategies provide keys for businesses looking to move toward green consumerism.

1 Provide three in one value – price, quality and responsibility.

Quality and environmental and social responsibility in the entire process of production and delivery of a product or service are important drivers for especially Aspirational consumers who do not want to feel guilty about their purchases. Brands that guarantee three in one value and successfully promote a sense of belonging to an in group of people concerned about the future will be better able to cushion higher input costs.

2 Embrace Connecting Stories and Invite Shared Solutions.

Today’s consumers are highly mobile and connected. Brands that embrace this connectivity and invite consumers to find out about the life cycles of their products, about the people who make them and social and environmental success stories and problems they are working on can build transparency and credibility leading to consumer support and even to shared solutions.

3 Harness Consumer Collaboration

Marketing used to be strictly top down with companies convincing their target audience to purchase. Today consumers use their online social networks to discover and share brands and products and place a high level of confidence in the opinions of friends and contacts. This network provides a vast and available marketing opportunity to promote products.

4 The Power of Tribes.

According to the survey, consumers really value belonging, especially in the developing world. Remember the 85% who said that friends and family were the most important to them. The study suggests that green branding offers a way of connecting a community of people who share similar environmental and social values. So a company that is genuinely committed to a green business journey, could use green branding to harness the `Power of the Tribe’ to promote and mainstream more sustainable form of consumption.

(Eds Comment: Whether a product is meeting a real need or a green want will determine whether or not the company is providing a genuine environmentally sustainable product or service. Can an Aspirational move to be a green Advocate while there is still time and without economic chaos?)

KimK April 2013

One Response to Can Consumer Conscience promote Green Business?

  1. Grass October 21, 2013 at 8:47 pm #

    Thought provoking. Consumers need to be more aware of the power they wield and the impact their choices have.

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