There are variations in consumers’ behaviour and relationship to sustainability and it’s important to know how their views are rewriting the rules for companies. Different consumer segments define sustainability differently and these definitions are mostly based on misconceptions. Businesses marketing sustainability as a strategic tool need to acknowledge and address these fragmented consumer bases, to avoid making a general assumption that all consumers are concerned about climate change effect on the environment. According to new research by Bain’s Global Consumer Lab.
Their research found that consumers in fast-growing markets are more concerned about sustainability than those in developed markets. 79% of consumers in China, India, and Indonesia, known as the fast growing, are concerned about environmental sustainability compared with 55% in US and Europe known as the developed markets.
Businesses have long viewed younger consumers as more focused on sustainability than their older counterparts, but the reality is doubtful as 72% of Gen Z consumers – those born between 1997 and 2012 and 68% of boomers – those born between 1946 and 1964, globally are extremely concerned about the environment, but in countries as diverse as India, France, and Japan, boomers are more concerned. Furthermore, in the US, liberals are concerned about climate change while conservatives are concerned about preservation of natural resources and biodiversity.
Can higher premiums on sustainable products facilitate reduction of emission?
As those concerns grow, consumers are willing to pay more for sustainable products as a way to minimize the environmental impact but that seems to be challenge, as they are willing to pay an average of 11% premium for sustainable products while marketers insist on an average of 28%.
Can the average consumers to determine the complex carbon components in the value chain?
In the midst of all the unclarities around, 50% of consumers who were surveyed claimed sustainability to be one of their key purchase criterions but when asked to determine which of two given products generated higher carbon emissions, consumers were wrong or didn’t answer correctly about 75% of the time. Obviously, this laid the researchers to conclude that, consumers have been making decisions based on misconceptions.
The need to understand the ethnocentric bias
Societal norms and financial realities in the context of sustainability poses another challenge as 50% of the consumers from the developed markets – Europe and United States believe that living sustainably is too expensive compared to 35% of consumers in fast-growing markets – China, India and Indonesia. On the one hand, consumers from developed market consider sustainable lifestyle to mean avoiding excessive purchasing and affordable conveniences as against their overrated consumption culture. On the hand, consumers from fast developing markets consider sustainable lifestyle to mean buying at local shops, generating less waste, and eating a traditionally plant-heavy diet.
The need to develop an agile orientation to meeting the changing pattern consumer and regulatory behavior.
It’s obvious that understanding the momentum behind sustainability and dynamic shifts in consumer behaviour will have profound ramifications for companies. At the moment, consumer requirements are changing faster than companies can keep up with. However, to match this pace companies must create a future-proof and agile strategy that will accommodate changes in consumer behaviour, fast paced technologies and increasing government regulations in order to stay in business.
Clarifying the intrinsic trigger purchasing decisions.
Companies need to create products and designs to respond to consumers with a range of purchasing motivations shaped by their definitions of sustainability. This can only be effective if they acknowledge that the traditional consumer base has been fractured in relation to how consumer understand sustainability. It’s only the most passionate consumers that make sustainability the only purchase criteria. Most consumer are driven by a combination of factors ranging from price to life style.
Developing learning as a strategy
At the moment, with the dynamic nature of the sustainability space, companies will continue to deploy market experimentation tools to test, learn and determine what resonates with different segments of their consumer base. As this process helps the companies to adapt the product proposition and design and also helps the consumers make decisions that are consistent with the values. At the same, bring marketing team and consumers close, which will in most cases lead to strong sales figures.
Anticipating potential public policies and regulations.
Government policies are inevitably becoming a huge contributor to changing consumer behaviour. Sustainability has thought us that companies, across all industries who are in the forefront of helping to shape the regulations affecting their businesses stand to gain from impending changes. As such a company’s ability to anticipate policy shifts and build future-proof portfolios will help determine whether it can outperform competitors.