Consumer Beliefs are Changing About Sustainable Products
10/14/2021 | Doug Gatlin
The question that often surfaces when people consider new green products is, “That’s great, but does it work?” While this has long been the case, new research shows that consumers, particularly younger generations, are beginning to see sustainable products as higher performing than conventional alternatives.
New research highlighted by the Kellogg School of Management at Northwestern University reveals that a growing generation of consumers view sustainability as a product characteristic that enhances, rather than detracts from, other product attributes. These buyers believe that responsible brands outperform their less sustainable counterparts — a drastic shift from the sustainability-liability mindset of the past. This change in the perceived value of environmentally preferable products is a testament to the quality of the sustainable brands available today and a beacon of hope for the future of responsible companies.
Identifying Sustainable Features
As those of us working with environmentally preferable products have long known, sustainable products can work as well as, or better than, conventional alternatives, but for consumers, understanding what to look for in sustainable products can be tricky. Nearly three out of four Americans responding to GreenPrint’s Business of Sustainability Index study did not know how to identify products that were environmentally conscious. Interestingly, 45 percent said they would trust a third-party source to validate if a company is, in fact, more sustainable. Ecolabels, including Green Seal, scientifically validate that products are safer for the planet, helping align manufacturers’ claims and consumers' perceptions of sustainability.
Manufacturers are amping up the focus on sustainability as consumer demand for these products increases. According to Forbes, more than 40 percent of manufacturing respondents in a recent study said sustainability is a priority at every stage of the manufacturing process. While it is a focal point for many manufacturers, conveying sustainability as an additional product benefit is easier said than done. When successful, brands are able to differentiate their product lines by highlighting environmentally preferable ingredients.
Despite confusion caused by greenwashing and unsubstantiated marketing claims, consumers and manufacturers increasingly see sustainability as an attribute worth paying for. Sixty-seven percent of American consumers said they were willing to pay extra for sustainable products in a 2018 survey, though there is often a disconnect between intent and action.
Sustainable products have historically been associated with higher price points due to research and development costs, paying living wages for labor, and making other sustainable investments. However, this is no longer clear-cut. “In many categories natural products have reached price and performance parity with conventional brands,” said Stuart Landesberg, CEO of Grove Collaborative, in an interview with San Franciso Business Times.
Even in cases where prices are higher, younger generations are more willing to make the switch to greener alternatives. One quarter of Millennials and 22 percent of Gen Zers said they were willing to pay 11 to 20 percent more for products that were certified as sustainable, with an additional 50 and 65 percent, respectively, willing to pay up to 10 percent more. These consumers are also more likely than any other generation to seek out information related to environmentally friendly lifestyles and to feel ashamed about their less sustainable choices. These two generations represent a substantial portion of the American market — 42 percent combined — and have spending power of approximately $3 trillion. So, this shift toward sustainability has the potential to change the marketplace permanently.
Behavior Changes and Social Signaling
In addition to seeking sustainable products, younger generations are continuing to shift their purchasing from brick-and-mortar stores to ecommerce, especially amid the pandemic. One 2020 study found that nearly 86 percent of Millennials made a purchase online in the past year and, with ecommerce sales predicted to bring in an annual revenue of $6.5 trillion globally in 2023, an opportunity exists for smaller, sustainability-focused online retailers.
However, sustainable spending may not be evenly distributed across every product category. Research indicates that social signaling may influence which sustainable products we choose. This theory suggests that people buy environmentally preferable products not only because they like them and want to make a difference, but also because they like the way others will perceive them for owning it. This could explain why some industries are ahead of the curve when it comes to the adoption of more sustainable options; our cars, furniture, and fashion choices, for example, are much more visible to others than the cleaning products or sanitary paper we use.
Yet, studies show that the pandemic and current health-focused trends are increasing the retail value of environmentally conscious laundry, dishwashing, and surface cleaners. The sustainable cleaning product industry is projected to grow twice as fast as the overall cleaning product market over the next five years, reaching $72.9 billion in retail value in 2021 alone. This indicates that consumers are now shifting the way they make purchases across product categories, opting for items that match their personal values rather than those that achieve external validation.