The reality of climate change is no longer a debatable topic. Research done in 2022, which assessed more than 88,000 peer-reviewed climate-related studies conducted since 2012, found that 99.9% of those publications agree: our global climate is deteriorating, and humans are responsible.
Consumers have certainly taken notice.
People who say they are “highly concerned about the environment and taking actions to reduce their waste” will grow from 1-in-5 to 1-in-3 over the next few years, according to GfK’s latest “Who Cares? Who Does? 2022” Report. This “Eco Actives” group is predicted to become a global majority by the year 2030.
A growing number of consumers claim they will inevitably switch to buying products from organizations that share their stance on the environment. Younger buyers lead the way here, with those aged 18 to 24 being 3x more likely to switch brands based on intrinsic values compared to those aged 65+.
And a substantial percentage of the global population already indicates a willingness to pay for sustainable products, which are often priced at a premium, in some cases upwards of +25%.
Source: Simon-Kucher Survey – Global Sustainability Study 2021
Simply put, there has never been a better time for companies to have an adequate portfolio of sustainable product offerings.
Be the Trusted Brand
The latest GfK research shows that more than 60% of consumers distrust what companies tell them about their sustainability practices. Additionally, 1-in-4 have doubts about the proper functionality of green products. This notion of trust (or lack thereof) has become a real deal breaker for brands. In order to win consumer loyalty and trust over the long term, we are seeing several manufacturers looking beyond product innovations and moving into other sustainable practices.
As an example, Samsung has publicly declared a commitment to business action that secures a sustainable future with eco-conscious advances in product components and manufacturing processes. These include the use of low-power semiconductors, a new SmartThings Energy service, smartphone components made from recycled discarded fishing nets, and more. Other brands like Dell, Huawei, and Lenovo are also committing to a similar range of sustainable actions.
Sources: Dell ESG Report 2022; Huawei Sustainability Report 2021; Lenovo ESG Report 21/22; Samsung Electronics Sustainability Report 2022
Knowing exactly how to communicate that your Environmental, Social and Governance (ESG) contribution is industry-leading is another thing. Any sustainability initiatives in place can only attract eco-consumers if they know about them and understand the importance of the actions you have taken (or will be taking). Thus, your efforts need to be communicated carefully – nothing turns consumers off a brand as quickly as greenwashing.
Companies are now expected to source various materials for their products responsibly; simply saying that you are doing so does not earn any more value from consumers. In fact, claiming to care about sustainability could result in a negative perception – that the communication is only for the good of your public image.
Social proof can be a key factor to providing sustainable intent, action, and evidence. In other words, have someone else talk about your brand! Social media and TV/radio programs show the highest influence on shaping consumers’ sustainable buying behavior. Conversely, brands’ own websites have shown the lowest impact.
Source: GfK Who Cares? Who Does? 2022 Report
Focus on Product Quality and Value
GfK’s research shows that while consumers want to buy products from brands whose commitment to sustainability aligns with their own principles, they will only do so if they believe those products meet a certain quality threshold and will provide an appropriate value-for-money benefit in the long-run.
Quality continues to be a critical barrier to sustainable purchasing globally. 40% of global consumers now agree that environmentally-friendly alternatives just do not work as well as non-sustainable products. This percentage has jumped +5pts from a year ago and demonstrates that consumers are increasingly disappointed with the performance of green products.
Furthermore, while we have shown consumers’ willingness to pay a premium price for sustainable products, they need to be convinced that these products will save them money long-term. Brands must educate and communicate about their products’ total cost of ownership. Since sustainability is becoming more about ‘reducing’ and ‘saving’ – whether it’s using less energy or water, reducing wasteful consumption, or recycling – these kinds of attributes can be highlighted to demonstrate true affordability and value.
Explore the Growing Circular Ecosystem
Despite products being made with more durable materials, T&D lifecycles are getting shorter over time, as rapidly changing technology shifts consumer purchasing habits. This has created product waste that can have a significant environmental impact. Think about the fact that an estimated 5 billion smartphones were thrown away in 2022 alone!
As a result, mechanisms such as rental models are on the rise. GfK research has shown an increasing trend of consumers who prefer to rent greener, higher quality products over buying a cheaper alternative with a bigger carbon footprint. Bosch, Decathlon, and Ikea are just a few of the names offering consumers this option and actively embracing rental programs.
GfK’s Green Gauge Report shows that 3-in-5 global consumers are interested in leasing or renting personal electronics, and 1-in-2 are willing to pay a monthly fee to borrow small appliances or electronics they do not use frequently. This is a familiar trend that has already seen success in large industries such as automotive and fashion.
Brands are also trying to extend the lifespans of their products by making them easier to repair/ recycle/ upgrade. Apple’s Certified Refurbished program provides an outlet for both sellers of pre-owned products and buyers wanting a bit of a discount. LG recently launched new home appliances whose software and hardware will be upgradeable. “Upgradeability challenges the idea that expensive appliances are designed with planned obsolescence in mind,” said Lyu Jae-cheol, President of LG Electronics Home Appliances.
Engage with the Right Consumer
Another aspect to consider is which consumer segment to focus on based on concerns, attitudes, and behaviors related to sustainability. The 5 key segments outlined in the GfK Green Gauge Report provide a detailed view of the sustainable consumer market.
From GfK’s segmentation, we know that “Glamour Greens” are the largest and fastest growing of all the consumer-driven sustainability segments. Companies could choose to hone in on this group as they tend to be younger, have higher incomes, and demonstrate an eagerness to showcase their own eco-friendly purchases and behaviors to others; these are the “green influencers”, so to speak.
Or maybe the “Green inDeeds” segment would be a better focus? Although a much smaller portion of the population, Green inDeeds let their actions do the talking, scoring highest on things like conserving energy and water, recycling, and considering the environment when making purchase decisions.
Knowing who your ideal sustainable consumer is and how to talk to them about your efforts to be green is vital to maintaining sustainable growth and future-proofing your business.
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