Bain & Company published a new report The Sustainability Puzzle: What Do Consumers Really Want? offering new perspectives on how sustainability intersects with customer needs. The report indicates that more consumers “want to live sustainably and that they believe their personal actions make a difference.” Sustainability then is – to use a phrase I coined several years ago – a key customer buying criterion. In theory, this sounds rather simple but Bain makes it clear it isn’t.
To begin with,
“… consumers have trouble figuring out how to live sustainably and look to brands and retailers, in addition to government, to help them. This opens up opportunities for companies that can support consumers’ continuing quest for a sustainable lifestyle. But it also surfaces some fundamental issues that raise the stakes for businesses in the current economic climate…”
If this is correct, companies must define sustainability buying criteria for their customers – essentially telling them what their need is and then explaining why/how they fill the need. Unless done carefully, this can backfire in general, but the risk is greater in today’s era of greenwashing and consumer mistrust of corporate sustainability efforts/claims. In yesterday’s blog, I mentioned three factors to consider when pushing back against negative NGO reports. Those can also be principles to consider when attempting to define sustainability buying criteria for customers. But the upside of connecting is meaningful:
“Consumers say that brands and retailers play a big role in their sustainability journey: 28% indicate that awareness campaigns by brands and retailers prompted them to start buying more sustainable products. As a sign of retailers’ part in the equation, 33% of consumers report that they started buying sustainable products because they became available in the places they shop.”
Another difficulty in engaging successfully with customers is price. Customers differ on whether product sustainability is a luxury worth higher pricing or a basic tenet of reduced consumption and operating cost management. The old “greenium” approach may no longer be a viable pricing strategy:
“The common perception that a sustainable lifestyle is expensive poses a challenge for brands, especially amid intensified cost-of-living worries. Conversely, consumers in some fast-growing markets believe that living more sustainably would actually cost them less. The frugal behavior they associate with sustainability could lead to an overall reduction in demand and consumption, complicating companies’ growth plans.”
The report isn’t that long and is good reading.
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