Recent years have seen a tremendous rise in consumer expectations surrounding sustainable brands, often basing their purchase decisions on how eco-friendly a product or service is. But with the cost-of-living crisis tightening our purse strings, the big question arises: are consumers still actively looking for sustainable options or have their priorities shifted? In this blog post, Rituparna Chatterjee, from our Insight and Strategy team, explores consumers’ mindset regarding sustainability in today’s troubled times.
- Interests in ‘helping the environment’ and ‘expecting brands to be eco-friendly’ were at an all-time high in 2020, but this has been steadily decreasing over the past 2 years, with consumers now prioritising budgeting and savings instead
- The second-hand market is booming, but consumers name ‘affordability’ and ‘value’ as their top reason for buying second-hand, followed by ‘variety of choice’ and ‘sustainability’
- While consumers may choose value over sustainability in today’s challenging economic climate, they still demand high standards from brands when it comes to environmental impact
The Rise of the Sustainable Customer
Although it may seem like a twenty-first century phenomenon, sustainability is not something new. During the nineteenth century, interest in preserving the environment grew, which led to the rise of environmentalist groups like the Royal Society for the Protection of Birds and the Sierra Club aimed at conserving wildlife.
This momentum continued into the twentieth century when, in 1952, 12,000 people in London were killed due to smog, leading to the passing of the Clean Air Act of 1956. Over the years, similar acts would be passed, including the Endangered Species Act of 1973 and the Forest and Rangeland Renewable Resources Planning Act of 1974.
During the 1990s, melting glaciers and extreme weather conditions caused further public concern and the new millennium witnessed consumers demanding and choosing sustainable products. As a result, businesses rushed to adopt sustainable practices and declare themselves as green.
Take the example of Levi’s, which centres their business on the three pillars of climate, consumption and community, or PepsiCo’s commitment to building a more sustainable food system through the PepsiCo Positive initiative. Sustainable practices are not restricted to top conglomerates, but have permeated into smaller indie brands — like Unless and 88 Acres — giving consumers the option to adopt a sustainable lifestyle in almost every aspect of their life.
Consumer Attitudes Towards Sustainability During Troubled Times
Let’s look at some pandemic and post-pandemic consumer data. As per a December 2022 Forbes news report, 82% of consumers want brands to practice sustainability and embrace people-first practices. Interestingly, another report by The Wharton School of the University of Pennsylvania highlights how Gen Zs are at the helm of shopping sustainably and partly responsible for persuading baby boomers to spend more for sustainable products.
A June 2022 Kantar survey shares a similar narrative. In their report, 61% of millennials believe that they are eco-conscious in practice, followed by 60% of Gen X, 59% of baby boomers and 51% of Gen Z. The small percentage for Gen Z could be a result of their higher standards for eco-conscious behaviour, along with financial constraints that restrict them from doing what they want.
All these reports paint a similar picture of consumers expecting brands to embrace sustainability, wanting to be eco-conscious and being willing to spend more on sustainable products, provided they have the financial capability.
The global pandemic coupled with recent environmental disasters have contributed towards this sudden spurt in the demand for sustainable practices and products. However, this shift was not born out of a conscious choice but rather a necessity. Last year (2022) was a year of global disasters, recording 10 climate-based global catastrophes, each causing more than $3 billion worth of damages. The pandemic brought about a global supply chain crisis, leaving the consumer with fewer choices in some industries and leading them to look for alternatives — making sustainable products that are durable, reusable and that can be repaired easily more attractive.
The Deloitte report below shows how consumers were focusing on buying just what they needed (+20 points), reducing meat consumption (+9 points) and opting for low carbon emitting modes of transport (+11 points).
Likewise, Google’s consumer insights report shows shifts in online search behaviour among UK consumers because of rising inflation. In 2021, search interest for terms like ‘smart radiator’ and ‘smart thermostat’ were up as consumers looked for products that would help them save energy. There is also a year-on-year growth in the search for second hand deals when compared to new mobile phones. This search behaviour highlights that, when faced with rising costs, people tend to proactively explore sustainable solutions that help them save money.
Inflation and Sustainability in 2023
How does sustainability look in 2023? Not particularly rosy, as we can see cracks creeping into the sustainability narrative. Though most reports confirm that consumers still care about the environment, GWI’s data over a period of two years (Q2 2020 — Q2 2022) shows a gradual decrease in consumer interest for helping the environment and expecting brands to be eco-friendly in over 20 countries.
This reiterates that consumer priorities are based on the situation they find themselves in. It’s not that people are suddenly less concerned about the environment but, when faced with recession, food shortages and geopolitical tensions, most consumers can’t mentally or financially afford a sustainable lifestyle.
Instead, they will be prioritising budgeting and savings, looking for second-hand products — the market for which is estimated to touch $82 billion by 2026 — and seeking alternative payment solutions like Buy Now Pay Later (BNPL) — which is predicted to have over 900 million users worldwide by 2027.
While there is no denying that sustainability is one of the major drivers behind the recent growth of the second-hand market, it is not the primary reason. As per Statista, 50% of consumers state affordability and value to be the major reason behind purchasing second-hand products, followed by variety of choice and sustainability.
Does this mean that consumers will suddenly stop expecting brands to be eco-friendly? The answer is no, as consumers still expect brands to progress the state of sustainability on a global scale. According to NielsenIQ survey data, 46% of consumers expect brands to take the lead on bringing about sustainable change. This means that brands can no longer greenwash themselves. Goldman Sachs, for example, came under scrutiny last year for failing to follow through the policies and procedures they had established for ESG (Environmental, Social and Governance) research. The onus will now be on brands to show real proof of change rather than rely on regulatory bodies to ensure compliance.
What Can Brands Do?
In this challenging scenario, there are three key recommendations that brands can adopt to show that they are genuine, ethical and competent when it comes to their sustainability practices, while giving consumers the option to make eco-friendly choices.
Define your eco-led initiatives
Consumers increasingly want brands to be authentic, which applies to sustainability initiatives as well. If you are a brand entirely rooted in sustainability, think about leading various initiatives that rely on your core ethos and lead the way for other brands to follow. Patagonia is a fitting example of a brand based on sustainability that has launched various initiatives like the ‘Worn Wear’ programme, which encourages second-hand purchasing.
If you are a brand that has just set out to incorporate sustainability into your business practice, you might want to clearly identify and state the purpose behind your eco initiatives. You also should ensure they align with your long term strategy and consumer values. Take the time to measure the impact you make by creating a roadmap with clear targets.
Be transparent about your eco practices
It’s crucial that you remain transparent about your eco-led practices in your communication, so consumers can see how serious you are and gain a sense of trust. So if, for example, sustainable packaging is your focus, try to ensure that you are open about your approach to it.
- Is your packaging made from recycled products and can it be easily recycled?
- Is your packaging free from plastics or synthetics?
If you have a broader approach to sustainability, highlight the different issues you are targeting across your plan and communication.
Unclear as to how you should communicate your sustainable credentials? Our Head of Insight and Strategy, Rosie, takes a deep dive into communicating sustainable credentials as a brand.
Encourage sustainability and savings
With savings taking precedence among consumers amidst the cost-of-living crisis, it is important that brands offer initiatives that combine both sustainability and savings. Think about Zara, who recently entered the resale market with their pre-owned service for users to resell, repair or donate clothing.
Highlight affordability and value along with sustainability in your messaging while promoting these green initiatives to your consumers. A good example of this is American cosmetics brand Kiehl’s ‘Recycle & Be Rewarded’ programme, which encourages consumers to recycle their empty containers against points that can be redeemed for cash vouchers.
Despite today’s economic uncertainty, consumers are still open to sustainable products/services if they are affordable and offer value. The challenge lies in integrating affordability and value into your sustainability narrative.
If you’re looking for a marketing partner that knows how to navigate the choppy waters of 2023, get in touch with us. We’re excellent problem solvers and we have experience crafting cross-channel strategies across numerous sectors.