We’ve been through years of promises that consumers are willing to pay higher prices for green or sustainable products, or – where prices are substantially equivalent – that they prioritize green products over others. However, most of those predictions haven’t borne out. Consumers aren’t particularly good about following through on what they say in surveys.
I wrote earlier this summer about a bold experiment by German grocery retailer Penny to empirically test consumer behavior towards “wahren Kosten” (“real” or “true” pricing) for one week. These “real costs” include impacts such as climate change, obesity, child labor and plastic pollution that don’t have actual costs at the company or product level. Final results of that experiment will be published early next year, but initial reports indicate consumers show a strong reluctance to spend more.
In contrast, a recent article in Harvard Business Review takes the position that change is coming:
“For most consumers, sustainability has been considered a ‘nice-to-have’ in the brands they buy, but it’s rarely been table stakes. That’s about to change. Our research suggests we’re on the brink of a major shift in consumption patterns, where truly sustainable brands – those that make good on their promises to people and the planet – will seize the advantage from brands that make flimsy claims or that have not invested sufficiently in sustainability…”
The authors explain the shift will be driven by young consumers willing to change their buying habits. The three most important things to know to capture this audience:
- Trust drives behavior and, ultimately, business outcomes.
- Sustainability promotes trust, particularly among younger generations.
- Younger generations will soon have most of the purchasing power in the U.S.
Against today’s current overwhelming trend of fast fashion for young consumers, such a change may be hard to see. The authors predict the tipping point may not come until 2030. Companies buying into the prediction need to start working now to not only make production and other business changes, but also to build a foundation of trust. That means making sure you avoid greenwashing, maximize consistency between ESG messages and company actions and be prepared to withstand slings and arrows of scrutiny. We have resources available to help you, including Guidebooks on Communicating ESG Value, Using FTC’s Green Guides for Marketing, and E&S Data Validation.
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