Harvesting the Green Opportunity for Retail

“Going green” is officially mainstream. Topics such as global climate change, environmental migration, and the growth of islands of trash that fill our oceans are constant fuel for the news cycle. Consumers everywhere are becoming more cognizant of how their everyday purchase decisions can adversely impact the natural world, whether this means shopping for products sourced from sustainable farms; purchasing clothes made from fabrics that haven’t been processed with toxic bleaching agents; supporting local agriculture by shopping farmers markets; or buying products whose manufacturers have made an effort to reduce packaging. This increasing awareness translates to significant opportunity for retailers to act.

A.T. Kearney’s 2019 Earth Day Consumer Sentiments Survey polled 1,000 shoppers on how environmental considerations impact their purchase decisions. The survey found that while 71 percent of consumers consider the environmental impact of their purchases, only 52 percent are willing to make changes in their current purchase patterns.

The survey results aren't as paradoxical as they may first appear. Consumers are, in fact, vitally concerned about environmental impacts —particularly those impacts that they directly experience — with 66 percent of respondents indicating they intend to shift their spending to more environmentally friendly products in the year ahead. Moreover, while they're willing to change, they also expect businesses to do their fair share. More than 65 percent said corporations should exceed government sustainability standards.

What Do Consumers Want?

For retailers, finding out what consumers really think, and how that thinking ties to actual purchases, has long been a problem.

A.T. Kearney’s survey found that 80 percent of consumers believe changing their personal everyday purchase decisions is the most effective path for improving environmental outcomes. In fact, only 20 percent of consumers believe supporting NGOs and government is a more effective route.

Consumers simply don’t see all environmental benefit claims as equally valid. The survey found that, in terms of purchase motivation, there's a clear hierarchy, with “immediate” product benefit claims such as recyclability and reusability claims most commonly ranked in the top three of a list of benefit claims. Conversely, fewer than 25 percent of consumers ranked “intangible” claims such as “production method reduces water consumption” on their lists of influential purchase decision benefits.

Put more simply, claims of environmental benefits have a greater influence on consumers if these potential benefits are close to home and are something shoppers can directly see or experience.

Furthermore, when it comes to those tangible claims, consumers — even those who don’t currently consider the environment — indicated a willingness to sacrifice for a clear benefit. Nearly 80 percent of respondents said they would consider delayed shipping — opting for five-day delivery rather than two-day — if the environmental benefit were clearly articulated. The survey found consumers are unlikely to automatically accept higher costs in exchange for environmental benefits. Almost half of consumers across all income levels cited cost as the primary obstacle to purchasing “green.”

Before any claim is made, however, it should be verifiable by a source that consumers believe. Survey results clearly indicate consumers don’t exclusively trust retailer or manufacturer claims. Nearly 80 percent of consumers look to supporting factors or external certification to build credibility of environmental benefit claims.

Different Categories Can Expect Different Support

The survey also found that when it came to environmental shopping potential, some categories score higher with specific age groups. While all age groups see themselves shifting purchases toward “green” products in the coming year (70 percent of shoppers age 18 to 44, and 62 percent of consumers 45 and older), their spending will be in different categories.

Based on the results, apparel and personal care look to be the next “green” waves. When it comes to apparel, approximately half of respondents age 18 to 44 said they intend to shift toward “eco-apparel.” About 60 percent of shoppers age 45 and older intend to shift to “green” personal care purchases.

A Road Map For Effective Retail Action

A.T. Kearney’s survey concludes there are several specific actions retailers can take:

• Offer consumers easy choices to buy "green" to help them take action.
• Adopt a global citizen mind-set and take the lead on “green” outcomes.
• Ensure full coverage of reduce, reuse, recycle claims.
• Demonstrate impact — i.e., show results of shopping behaviors that progress environmental outcomes.
• Relate all benefit claims to the consumer — make it personal.
• Validate all benefit claims with objective, proven evidence or certification.
• Identify “green” benefits that come with limited consumer trade-offs.
• Expand availability of eco-apparel, especially with youth segments
• Emphasize “green” in personal care, especially for adults age 45-plus.

The good news is that the 2019 Earth Day Consumer Sentiments Survey found real, significant growth potential in “green products.” The bad news is that retailers and consumer goods manufacturers can’t rely on “green marketing” alone anymore. To succeed, their efforts have to be authentic and independently verifiable and must deliver immediate consumer-facing impact. Those willing to make the investment stand to gain significant returns.

Corey Chafin is a principal in the consumer and retail practice of A.T. Kearney, a global strategy and management consulting firm.