Beyond Value: How Environmental Impact Is Redefining Consumer Choices

July 17, 2024

 

In the past, top executives had to worry about their product’s utility, value for the money, availability and exposure to their target markets. That is changing. “More than ever, today’s consumers are considering a company’s impact on the environment before buying,” said marketing agency Galactic Fed in July 2023.

That shift started in 2016. In the following four years, “searches for sustainable goods increased globally by 71%,” The Economist Intelligence Unit reported.

The COVID-19 pandemic only increased that awareness. In February 2022, an IBM Institute for Business Value survey found “93% of global respondents said the pandemic had influenced their views on sustainability.” It added that “environmental issues [will] become even more important” in the coming years.

That translated into more demand for eco-friendly (green) and sustainable products. IBM’s survey found that “half of consumers said they were willing to pay … an average of 59% more for products branded as sustainable or socially responsible.”

To capitalize, “companies need to implement sustainability and eco-friendly marketing strategies to stay abreast of changing trends,” noted Galactic Fed.

The big challenge is to win consumer confidence, as cases of greenwashing, where companies fake their green credentials to charge a premium, are increasing. “The lines between sustainability and greenwashing are subtle, yet, if confused, can be extremely damaging to the brand’s reputation,” NoGood, a consultancy, said in March.

The sustainable product

Research published in 2023 from SRM Institute of Science and Technology defined sustainable and eco-friendly (green) products as those “that have been intentionally developed, produced, and disseminated in a manner that minimizes their adverse effects on the natural environment.”

Such products could be made of or contain “sustainable and renewable sources, [such as] bamboo, organic cotton, recycled plastic, and recovered wood,” the research said. “These materials aid in mitigating the depletion of natural resources and minimizing waste.”

Green products also must “refrain from utilizing detrimental substances, such as … pesticides, artificial scents, and perilous cleaning agents,” the SRM research said. “They [are detrimental to] safety for both human health and the environment.”

Products that operate using natural resources need to be designed to minimize their consumption. Examples include “LED bulbs or water fixtures with low-flow capabilities [such as] low-flow showerheads and rainwater-collecting systems,” the report said.

Green products should be “biodegradable or compostable, thereby enabling them to undergo natural decomposition … without inflicting any detrimental effects upon the surrounding ecosystem.”

Packaging is part of the “green product” classification. The SRM University research said “packaging [must be] simple or designed with eco-consciousness in mind,” such as using recycled or biodegradable materials.

Classifying a product as sustainable also “links to fair trade and ethical principles,” the research said. “This contributes to the promotion of social sustainability alongside environmental considerations.”

Long-term growth

Raising public awareness about a company’s green and sustainable products has long-term benefits and could save companies during economic downturns. Having “an environmental awareness plan … gains trust and sustains loyalty,” said Adam Butler of Jiffy Junk LLC and Jiffy Junk Franchising LLC, a waste management company.

Gen Z, born between 1997 and 2012, is at the “helm of these new, eco-savvy, and outspoken consumers worldwide,” consultancy NoGood’s report said. “The younger generation is not afraid to call out brands if they are blatantly choosing to be unsustainable.”

According to Deloitte’s Sustainable Consumer 2023 survey, “Nearly one in three consumers stopped purchasing from certain brands because they had concerns about their sustainability.” That impacts corporate growth. A 2023 survey from McKinsey found that between 2017 and 2021, eco-conscious companies were twice as likely to grow by more than 10% compared to those that were not sustainable.

Top practices that swayed purchase sentiments were reduced waste, minimal carbon footprint, sustainable packaging, ethical commitment and respect for human rights, Deloitte’s report said. Also, 67% of consumers surveyed considered sustainable materials a critical factor in purchasing a product.

Marketing building blocks

Marketing exercises that showcase a product’s sustainability and eco-friendly aspects are vital to attracting new buyers. “Selling these environmentally friendly products successfully requires more than just promoting the product,” said Cue For Good, a consultancy, “It also requires a thorough comprehension of … the needs of ethical customers.”

That is not easy. It “involves a unique set of challenges and opportunities,” Cue for Good said. “Customers seek authentic proof of a company’s dedication to sustainability, all while expecting the brand to meet the rising expectations of an evermore environmentally conscious consumer base.”

The cornerstone of a successful green marketing campaign is to “ensure [that the] message runs through [all of the company’s] marketing campaigns” and online presence, Givz, a consultancy, said.

“Marketers must fully understand the company’s perspective on such topics and how to address them in their products and services,” said Galactic Fed. That allows campaign developers to determine “the key messages to use in promotional advertisements and content, [which should be] one or two … and stick with them.” Otherwise, “customers may not be as likely to believe your branding.”

The next step is for those marketers to formulate “long-term goals,” Galactic Fed said. “Embedding environmentally friendly and socially conscious policies involves much more than a 30-second commercial or an email sent to subscribers.”

Those long-term goals would shape the company’s “short-term marketing campaigns to achieve overal goals,” said Galactic Fed. Those campaigns need to be via channels “that don’t harm the environment … The company may take a digital-only approach rather than … paper ads to reach clients.”

Ultimately, NoGood stressed that when developing short-term campaigns, marketers must “think like [their] target consumer, [as] sustainable marketing is highly dependent on consumer empathy and understanding. Aligning … efforts with the customer’s desires, values and aspirations [means] businesses can meet consumer demands effectively, all while tackling critical, ethical, and environmental challenges.”

Eco marketing

Companies with certified green products or operations need to communicate those achievements to their target markets. “Brands selling eco-friendly products [have to] talk about their certifications … or mention where they get their materials from, especially if they’re recycled or sourced in a way that doesn’t harm nature,” said Cue for Good. “By doing this, they win the trust of people who care about the planet and want to buy from responsible brands.”

Another sustainable marketing tactic is to educate the company’s audience via “social media, blogs, or informative content,” explained Cue for Good. “This education … helps bring a better understanding of sustainability and motivates [customers] to make more environmentally responsible decisions.”

Aside from using minimal packaging and recycled and eco-friendly materials, “the design and presentation of sustainable packaging also contributes to brand perception,” Cue for Good said. “Innovative, visually appealing and informative eco-packaging can attract consumers’ attention, communicate brand values and differentiate products in a competitive market.”

Pricing also is vital, as sustainable and eco-friendly products are generally more expensive. “Companies [should not] pass these costs on to their customer base,” Galactic Fed said. If they do, “they’ll need to share why. Otherwise, clients may believe the price increase was arbitrary.”

Another dimension in marketing expensive sustainable products is “emphasizing” their value, noted Galactic Fed. “Along with benefiting the environment, [companies need to] make the consumer effectively feel good about their choice.”

Cue for Good said insufficient communication about price increases and the added value of sustainable products can be hugely detrimental. It could push customers to less expensive alternatives, competitors that share their sustainable products’ pricing strategy, or those who talk more about the added value of buying their sustainable products.

Meanwhile, companies selling sustainable products that are unaffordable to their target market need to develop lower-priced alternatives while retaining the quality of their products and services, said Galactic Fed. “They must stay focused and ahead of the game to encourage their consumers and competitors to join their sustainability efforts.”

Public awareness

Cue for Good recommends “using customer testimonials and reviews.” They are a “powerful way to demonstrate the real impact and benefits of sustainable products,” the paper said. They “provide social proof of your product’s effectiveness and how it positively influences their lives.”

An alternative way to show the company is environmentally or socially conscious is to “offer shoppers the chance to donate to … charity when they make a purchase,” the Givz paper said. The company could “plant trees, [organize] weekly litter picking events [or] collaborate with other eco-friendly brands and sustainability initiatives to further [the company’s] impact on the planet.”

Givz stressed the importance of being “green from the inside, too … To really make a difference [a company] has to incorporate environmentally focused practices throughout [the] business, from the coffee staff uses… to the materials used to make the chairs … and the carbon footprint of [the company’s] waste.”

To convey such efforts to the public, Givz stressed the importance of “showing customers [the company] is actively working toward [the promised environmental] goals and letting them hold [the firm] accountable. This increases authenticity and trust, leading to better brand perception and a loyal customer.”

Beware greenwashing

Consultancy NoGood stressed that the most significant risk facing marketers of sustainable and eco-friendly products is others that fake credentials (greenwashing) to increase prices and avoid losing environmentally conscious consumers.

“Avoiding greenwashing is crucial to marketing sustainable goods,” stressed Consultancy Cue for Good. That will come from “providing concrete evidence and data supporting their eco-friendly initiatives, [allowing] companies to build credibility and trust with their audiences.”

Even if companies are not meeting the expectations of environmentally-conscious customers, they need to be transparent about it. “[It is] a cornerstone in marketing sustainable products,” said Cue for Good. Voluntarily and openly sharing such data will “foster trust… about a brand’s practices.”

That transparency should cover communicating a company’s ethical practices, the environmental impact of products, certifications (or lack thereof), the brand’s journey, opening two-way communication channels, and acting on feedback.

Failure to be transparent, or worse, dishonest about green credentials, would be disastrous. “Greenwashing is [telling] a lie,” NoGood said. Getting caught means “consumers can easily denounce the brand [on] social media,” the paper said. “Anyone, anywhere, will listen to [those] opinions.”