How are Sustainability and Consumer Spending Linked? (2024)

e-Commerce brands are having increased success with getting consumers to purchase more products online, including large ticket items. This trend is found most amongyounger shoppers led by Millennials and Gen Y who have increasingly casting off their fears of purchasing large ticket items from online brands. Even the less tech savvy generation of baby boomers are moving towards embracing purchasing items online that were often linked to "touching and trying" firsthand prior to purchase. It is largely due to reducing purchase anxiety. Of the five factors discussed in a Wall Street Journal article from December 15, 2018, one of the most interesting factors in reducing consumer anxiety is how brands are demonstrating concern for the future of our planet through such company policies as to how the company creates, sells and services products in a "sustainable manner."

Six Factors Today's Consumers Consider Being Important to Reduce Online Purchase Anxiety

1. Uncluttered web interfaces that foster engagement and are more editorial than commercial.
2. Simple decision trees, clean aesthetics,
3. Love of the planet, expressed, demonstrated,
4. Responsive customer service from the beginning,
5. Simple graphics compare the efficient direct-to-consumer model, transparency in pricing, costs; and
6. Clear and easy return policies and procedures.

Of these listed above, sustainability is making greater inroads into the mindset of consumers beyond the traditional user experience type factors previously identified.

Data shared byeMarketer,EuromonitorandSAPreveal that in the year ahead, conscious consumerism will continue to influence retail and e-Commerce. Reported in a recent issue of the Sourcing Journal,

"eMarketer’s Trends 2019 report found 48 percent of consumers who identify as “eco-conscious” read up on the clothing and shoes they’re interested in to understand the environmental impact as part of their buying decision. That’s an encouraging figure, but still a good distance behind categories like home cleaning and personal care products (73 percent apiece) and food (61 percent).

Most (70 percent) believe it’s up to everyday people to be good environmental stewards, though 52 percent want to see manufacturers of harmful plastic products take action themselves.

Nearly two-thirds (61 percent) of millennials (ages 22 to 35) say they’ll pony up a premium for products created with their impact in mind, just ahead of the 58 percent of Gen Zers (ages 16 to 21) who are similarly willing to part with more money for goods that won’t destroy the Earth."

Where does your brand stand on sustainability? What is your brand's sustainability policy?

Many brands are actively increasing theirsustainabilityquotient to reduce anxiety in consumers that purchase their product can both serve their need or desire as well as be produced in a manner that is tied to an important environmental goal customers share. The adoption of sustainable production processes is a powerful marketing tool it seems to be paying off.

For example,The North Facehas unveiled Futurelight, a breathablewaterproofmaterial developed using innovative “Nanospinning” technology and sustainable practices, and aimed at extreme climates. With Futurelight technology, The North Face, a division of VF Corp., said it is setting a new standard in sustainability through new practices in the fabric creation process.

Turtle Fur announced it is joining a pilot program with Limeloop reusable shippers. Limeloop created smart shippers, produced from recycled billboards that can be shipped to the customer with a pre-printed return label inside.

Customers can then place the label in the clear pouch on the outside of the bag, drop it in the mail, and send the reusable bag back to Turtle Fur to be reused for the next order. According to Limeloop, the reusable shipping package could last for as long as 10 years or more.

A Global Corporate Sustainability Report published by Nielsen indicates that, “globally, 66 percent of consumers are willing to spend more on a product if it comes from a sustainable brand. Millennials gave an even more impressive showing, with 73 percent indicating a similar preference.”

This data indicates that customers want the companies they buy from to practice sustainability,have strong ethical behavior and provide transparency. As part of the trade off, consumers are willing to pay more for products that use sustainable processes.

Consumers are already operating from a sustainability mindset, even if they struggle to make it a lifestyle. They are increasing the pressure on brands to make it easier for them to do so, calling for greater transparency and pushing for more sustainable options.

“The New Sustainability: Regeneration,” the latest report from The Innovation Group, explores the rising need for better sustainability. Doing less harm is no longer enough. The report further indicates, “The future of sustainability is regeneration: replenishing and restoring what we have lost and building economies and communities that thrive, while allowing the planet to thrive too.”

AGE MATTERS, BUT IT’S NOT EVERYTHING

For many brands seeking to imprint themselves on the Millennial generation, they have looked at research indicating this generation is closely identifies that sustainability challenges are a defining issue for them. of the Millennial generation — and research shows they’re willing to speak with their wallets the loudest.

“Despite the fact that Millennials are coming of age in one of the most difficult economic climates in the past 100 years, they continue to be most willing to pay extra for sustainable offerings — almost three-out-of-four respondents in the latest findings,” the previously mentioned Nielsen report states.

However, Nielsen went on to say that companies shouldn’t abandon Baby Boomers in their quest to appease and appeal to Millennials.

“Fifty-one percent of Boomers are willing to pay extra, an increase of 7% since last year,” Nielsen said. “This segment remains a substantial and viable market in the coming decade for select products and services from sustainable brands.”

"The buying preferences of Millennials absolutely need your attention. After all, millennial spending will grow to an estimated $1.4 billion andrepresent 30% of total retail salesby 2020. But consumers ofallages are becoming more environmentally conscious, signaling that sustainability should no longer be seen as a generation-specific value, but rather a growing societal value." - Antea Group

Sustainability as Part of Your Story

Brand stories can take one of a handful of fundamental story lines. In creating a brand's story, the story is not about you, it's about creating a story that weaves your customer into it. Understanding what challenges your customer is facing is an opportunity to identify a conflict they face and in which your product or service provides a solution towards it's resolution. Sustainability is a conflict customers of outdoor brands face in their own daily story narrative.

How Patagonia is Leading the Way

Patagonia has identified this conflict as a critical element in their story, which in turn, is a critical element in their customer's individual stories. As contrary as it would appear to fundamentals of the business strategy, Patagonia does not encourage it's customers to buy new clothing if they their existing garments work. Rather, they communicate to them not to do so, provide a service to repair their product if need be for the customer to continue using it, and they now provide a service where used merchandise can be returned for new merchandise credits. The used clothing is then cleaned and repaired and sold on their "Worn Wear" website.

This is part of Patagonia's commitment to and standing for sustainability in its business ethos. Patagonia uses the conflict between creating goods and its environmental impact to create contrast and its sustainability solutions to make their customers part of the company's story.

Other approaches to improving sustainability include:

• Designing products with durable materials and timeless designs that increase their longevity,
• Incorporating plastic recycling into the manufacturing process,
• Switching to bio-based and biodegradable bioplastics like Swedish brand Light My Fire has done with outdoor tableware, and
• Reducing pollutants by avoiding PFC (check out what Vaude has done).

Consumers Will Take Notice

Some might take the view that this is simply a way of giving back, but it is not. "Giving back implies that you have taken something away," as Denise Lee Yohn writes in What Great Brands Do. Environmental impact and sustainability provide big opportunities for brand transparency.

More than two-thirds of respondents to the new 2019 Retail and Sustainability Survey survey from CGS, a provider of business applications, enterprise learning and outsourcing services,said they consider sustainability when making a purchase, and are willing to pay more for it.

The study also found that,Gen Zshoppers make up some of the most socially-conscious buyers, with 68 percent having made an eco-friendly purchase in the past year. This poses significant implications as they begin to actively purchase products and services.

CGS surveyed more than 1,000 people in the U.S. between the ages of 18 and 65 on to what degree sustainable products and business practices are driving their purchasing preferences.

Consumers are putting an emphasis on sustainability, even though pricing remains a key factor in their purchase decision (62 percent). They are becoming more focused on researching and shopping with brands with a mission they care about.

Specifically, 34 percent of respondents said they would pay 25 percent more for products considered sustainable. CGS said more U.S. companies are implementing more eco-friendly processes and products. It cited Patagonia’s development of Woolyester, a material that blends wool, polyester and nylon to use approximately 50 percent of waste materials.

Consumer desire is driving this trend, according to CGS. Nearly 70 percent of survey respondents said sustainability is at least “somewhat important” to them when making a purchase and 47 percent would pay more for a sustainable product.

These are the most important environmental sustainable designation labels in the outdoor industry

Communicate Your Sustainability Commitment to Your Customers

Considering these findings and others regarding the growing role sustainability is playing with consumer purchase decisions, companies should consider how to incorporate this value and practice into its brand's ethos as a means to both grow customer purchases and loyalty. According to CGS survey findings, consumers are most likely to return to a brand for the product’s quality. However, the second highest reason consumers return to a brand is its sustainable or ethical business practices. Brand name and brand mission closely followed as reasons for loyalty.

“Today’s buyers are driven by more than price–they’re looking for brands that align with their own values and needs,” said Paul Magel, president of the business applications division of CGS. “To create a loyal customer base, brands must be transparent about the materials and development behind their products.”

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