Do consumers actually care if our business is sustainable or “green”?
Sustainability is something of a buzz word that people throw around casually and in daily conversation. While it speaks to a positive shift in public opinion and values do most people even know what this means or look to see which businesses are implementing sustainable practices? That depends on several factors including where they are in the world and if the issue is personal to them. When consumers feel either a direct impact to their lives, for example healthier food, they are more likely to pay attention to their choices and buy green. Likewise if a consumer believes their buying decision can have a direct impact on the environment they are more likely to chose a sustainable option. The rise of the Prius is a perfect example of this.
The grocery isle is a fantastic arena to test consumer preference regarding sustainability. With so many products to choose from it is easy for a consumer to take a few moments of time to compare brands while standing in the isle. Recently I went to purchase body wash for my daughter. I picked up three different baby products, looked at the front label and read the ingredients. I quickly discovered, much to my dismay, that the three brands were virtually identical. They had a different dye in them but other than that any claims of being “natural” or better for you were nothing but marketing hype. While this national grocery chain does not carry a sustainable, or natural, option a local grocery store does. As my desire to buy healthy products continues to increase I will be spending more time at the local store versus the chain. This creates a great opportunity for businesses willing to evaluate their practices and provide green options. Those that are not will continue to loose customers.
According to a study conducted by Delloitte and the Grocery Manufactures Association 54% of grocery shoppers care enough to make buying decisions based on green or sustainable business practices. Brian Lynch, GMA director of sales and sales promotion was quoted saying, “We found that for most shoppers, sustainable considerations are an important tie breaker when deciding between two otherwise equal products and they are a driver in product switching.”
On a global scale National Geographic produces a consumer study called Greendex that monitors consumer choice and the environment in up to 17 countries. They measure consumer behavior across 65 areas from housing to transportation and buying of consumer goods. According to their studies since 2008 there have been continued, increased trends in consumers making more sustainable choices. Whether this means purchasing solar windows, taking public transit, buying organic produce or simply having an increased awareness of the issues consumers are changing their behavior, even if slowly. While there has been some decline in certain areas like housing consumers overall are still positively trending toward sustainable behaviors.
As a business owner and capitalist, I must also point out the economic reality of consumer choices as pertaining to the environment. According to research done by GfK MRI the number of US adults willing to pay more for green products has declined over the past five years. The world has been in a recession, or as in the mind of many unemployed – a depression. Purchasing solar windows is of no relevance when you cannot pay the mortgage. Buying organic does not enter the equation when you have a small budget to feed a family. Researching sustainable corporations gets put on the backburner when you are looking for the less expensive option. People need money to pay the bills. They need money to live and when there is not enough of it to go around survival is the most important component. With that in mind the Grendex report is of greater interest to me. Understanding that in the midst of difficult economic conditions consumers are increasing their awareness, and making sustainable decisions when able, should be a huge wake up for business.
What do you think consumers will do when they have more disposable income? As a corporate board, leader or business owner this is not a question to be ignored. The future of your company could be tied to it. As business leaders and executives we need to do just that – lead. Large corporations have seen the trend and have started making strides toward being more green. Successful executives and entrepreneurs have the ability and take the time to see and evaluate the road ahead. Review your business model and identify ways that your company can become more sustainable. There are resources available to get you started. Additionally companies can benefit from an energy audit, look for ways to source local goods, and evaluate manufacturing and transportation processes.
Regardless of your stance on sustainability reports like Greendex make it clear that this is not a passing trend. The world economy is suffering yet people throughout the world are beginning to understand the need for environmentally friendly options and your company could be the one to supply them.