Download Marketing Sustainability in Retail – Understanding Consumer

Marketing Sustainability
in Retail –
Understanding Consumer
Market Trends
Laurie Demeritt
1
Sustainability
from a Consumer Perspective
The Hartman Group, Inc.
The Hartman Group, Inc.
A full-service strategic consultancy and market insights provider.
– Founded: 1989
– Headquarters: Bellevue, WA
– Staff Composition: Anthropologists, sociologists and psychologists,
visual analysts and linguists, MBAs, marketers and innovators
– Tinderbox: Dedicated to culture, innovation and trends
Multi-Disciplinary Team of Experts
Michelle Barry, PhD Sociocultural and Medical Anthropology
James Richardson, PhD Anthropology
Shelley Balanko, PhD Applied Social Psychology
David Moore, PhD Sociology
Jarrett Paschel, PhD Sociology
Nasser Kamali, PhD Sociology
Kirk Cornell, PhD Business and Industrial Anthropology
Brent Baxter, PhD Sociology
Greg Prang, PhD Sociocultural Anthropology
Samantha Goodwin, MSc Visual Anthropology
Karen Stockert, MA Cultural Communications and Design
Arwen Kimmel, MA Linguistics
Lucy Norris, MA, Food Studies
Melissa Abbott, MS Food Nutrition
Sustainability Study Research Methods
Qualitative Consumer Immersion
– Over 150 hours of consumer interviews
» In-depth interviews in homes
» Social network parties
» Observation of sustainability activities
» Consumer photo journaling
– Field locations: Chicago, Raleigh,
Boston, Newark, Los Angeles, Seattle
Quantitative National Survey
– Custom online survey; sample size
1,600
– Nationally representative survey of the
US population
– Conducted January 2007
A Consumer Centric Approach to Sustainability
We designed our research methods to give
consumers great freedom to talk about specific
topics however they liked
We asked consumers to describe their
dealings with many of the things that sustain
and support human life (e.g.,food, water, air).
We asked general, open questions, such as:
– “Is this weather typical for this time of year?”
– “What comes to mind when I say the words
“tap water”?”
– “What do you consider safe food?”
We introduced the term sustainability only near
the end of our interviews to gauge consumer
familiarity and understandings of it
Sustainability has a History
“Report Says Global Warming Poses Threat to Public Health”
—The New York Times
"Most Consumers Say They Would Like More Green Products”
—The Financial Times
"More New Alternative Fuel Vehicles Continue to Roll Off US Automaker
Assembly Lines”
—The Oil & Gas Journal
"Tomorrow's Shade of Green: Environmentally Oriented Construction Materials
for the 21st Century”
—Home Improvement Market
"Can Retailers Turn Green This Year?”
—Marketing Magazine
These headlines all occurred between 1996 and 1997
Sustainability Seems to Be Everywhere These Days
Food & Beverages
Home
Sources
fresh, local, seasonal, organic,
biodynamic
sustainably harvested wood
solar panels
writings: Al Gore, Michael
Pollan, Marion Nestle
farmers markets, CSA
programmable thermostats
food movements: Slow Foods
wild salmon, grass fed beef,
free range chicken
natural/organic cleaners
blogs: Greentopia, Ideal Bite
Rainforest Alliance, Free
Trade
green waste recycling
faucet aerators
lifestyle retailers: Whole Foods
Market, Timberland, IKEA,
American Apparel
Goods
green/organic skin care
Garden
Pet Care
garden in every school, urban
gardening
raw foods
herbals, acupuncture
reusable shopping bags
grow-your-own veggies &
herbs
Prius, bus pass, biking
drip irrigation system
non-toxic pet grooming
products
Sigg water bottles
ladybugs
non-PVC toys
bamboo & hemp clothing &
bedding
native plants
organic food
“Sustainability” is NOT a Household Word
Though widely used in business circles, the term
“sustainability” is little used in consumer circles.
– Just over half (54%) of consumers claim any familiarity at all with
the term “sustainability” (and most of these consumers cannot
define it appropriately upon probing)
• Only 5% indicate they know which companies support sustainability values
(unaided)
• 12% indicate they know where to buy products from companies that support
sustainability values
– As a marketing term, “sustainability” has limited traction; it is not a
household word
Sustainability Awareness
Though the term “sustainability” is limited
in usage, most people operate with
varying degrees of “sustainability
consciousness.”
– Sustainability consciousness refers to the
way people link everyday life to “big”
problems (e.g., food, water and air quality)
– Sustainability consciousness is not just
about “eco-conscious consumers” and the
environment
• It’s everyday people and broadly distributed across
society
– Sustainability consciousness emerges as
consumers gain experience dealing with
risks in everyday life
Risk in Everyday Life
Most consumers believe that daily life
requires practical adaptations to risks if
potentially harmful outcomes are to be
avoided.
– Some adaptations to risk are firmly
established habits
• Avoiding unfiltered tap water whenever possible
• Wearing sunglasses and sunscreens to “block out
harmful UV rays”
• Avoiding outdoor exercise on high pollution days
– Some adaptations to risk are only now
emerging
• Using sanitary wipes to wipe down grocery carts
• Routinely using air filters in living rooms
• Questioning the purity of water in plastic bottles
Perception of Risks from the Environment
Percentage answering “Agree” rather than “Disagree” or “Neither agree nor disagree.”
Source: 2007 Sustainability Survey (n=1,489 consumers within the World of Sustainability).
Current Adoption is Incremental
Many consumers are making incremental
individual changes, but primarily in
activities that are low-sacrifice and low-risk,
require little to no monetary investment (with
the exception of food) and need no
significant change in behavior (e.g., turning
off the water faucet while brushing teeth).
Initial changes toward a sustainable lifestyle
are more about making conscious decisions
and choices and investments of time
rather than purchasing products.
Current or Future Participation in Sustainable Activities
*Examples provided to respondents were “church, school, human services, neighborhood advocacy
group, [and] arts organizations.”
Note: Remaining percentage—answering, “I’m not ever likely to do this”—is not shown.
Source: 2007 Sustainability Survey (n=1,489 consumers within the World of Sustainability).
Occasional Organic Usage is Consistently
Strong
Daily
Weekly
Monthly
Occasionally
Never
2000
8%
9%
5%
34%
45%
2006
9%
14%
6%
44%
27%
2008
7%
12%
8%
42%
31%
Sources: Healthy Living, August 2000 (n=4,942); Organic 2006 Survey, December 2005 (n=2,109); Organic 2008, March 2008 (n=2,161)
Note: Percentages may not sum up to 100% due to rounding.
The “Absence of” Leads the List of
Properties Suggested by Organic
From the following list, what properties do you think are implied or suggested by the term "ORGANIC"?
83%
Absence of pesticides
No artificial flavors/colors/ preservatives
78%
Absence of herbicides
78%
75%
Absence of growth hormones
69%
Absence of antibiotics
67%
Absence of genetically modified foods
64%
Safer for one's health
63%
Environment-friendly
58%
Better for one's health
57%
Absence of food irradiation
48%
Fresh
45%
Absence of Mad Cow Disease (BSE)
34%
Higher nutritional content
31%
Premium product
Better taste
27%
Better treatment of farm animals
27%
24%
Locally grown
Family (small-scale) farms
Sustainable production
22%
17%
Consumers Are Most Willing to Pay a
Premium for Fresh Organic Categories
For which organic foods/beverages are you willing to pay 30% more than their conventional versions?
Meat/poultry (including deli, fresh)
65%
Fresh fruit
64%
Soymilk
62%
Milk
62%
Fish/seafood
61%
Breads
61%
Fresh vegetables
60%
Eggs
60%
Cheese
Hot cereal
56%
54%
Coffee
52%
Juice
52%
Yoghurt
51%
Vitamin supplements
51%
Fresh prepared (e.g., sandwiches, salads)
49%
Bulk goods
47%
Other dairy (e.g. butter, sour cream)
47%
Organic category buyers (Primary HH shoppers who have purchased organic in particular product
category in past 3 months) (n = 87 to 877)
Sizing Sustainability
Consumers can be analyzed according
to their lifestyle orientation within a
given “world” of activity—here the
“World of Sustainability”
Segments vary according to the
intensity of involvement in that world.
– The Core: The Core is the most intensely
involved - early adopters, trendsetters and
evangelists
– The Mid-level: The majority of consumers
are in the Mid-Level, they are changing
their attitudes and behaviors
– The Periphery: Consumers begin their
journey at the Periphery of the World, and
are usually more attitudinally than
behaviorally inclined
Defining the World of Sustainability
A small percentage of consumers (7%) do not participate in
the World of Sustainability in any meaningful way.
Consumers who are not in the World of Sustainability are
those who:
“Rarely” base their purchasing decisions upon their
concerns for issues such as the environment and social
well-being and fail to do so because “I’m not really
concerned”.
AND
Chose the response “I don’t think there are
significant problems facing the world at this
time.”
Measuring Involvement in the World of Sustainability
The World of Sustainability can be segmented according to how
consumers make sense of risks. This is because they think about
sustainable products in terms of lowering risk to themselves, to a
community or to the world.
Who is the Periphery Consumer?
Meet Linda.
– If gas prices rise even higher she feels she has a
“good reason” to trade-in her SUV
– Drinks water from the tap unless it smells and/or
tastes “bad”
– Does not believe “the hype” about organic food
– Believes climate change might be happening but
defers to the experts
– Travels with a waterless hand sanitizer because she
wants to avoid germs in public places
– Just bought an energy efficient dishwasher because of
a rebate
– Curbside recycles because it lowers the cost of her
trash bill
Who is the Mid-Level Consumer?
Meet John.
– Lacks deep knowledge of organic farming, but buys
organic occasionally because it makes him feel “safer”
– Wears sunscreen because the “hole in the ozone layer
makes it more dangerous to be in the sun”
– Uses a water filter on the kitchen tap but not in the
shower
– Recycles out of an ambiguous sense of moral duty
– Ponders the possibility of buying a hybrid vehicle
someday
– Enjoys buying brands that symbolically align with his
identity and values
Who is the Core Consumer?
Meet Kim.
– Pays premium prices for items produced by
companies who treat their workers fairly
– Avoids plastic packaging and containers due to
concerns about “leeching”
– Strategically plans errand trips so that she can
minimize her gas consumption
– Recently purchased sustainable cotton bed sheets for
her home
– “Follows” some of the products she buys throughout
their lifecycle
– Buys only cruelty-free personal care products
– Believes her purchase decisions are a form of direct
democracy
Dimensions of Sustainable Lifestyles
Core, Mid-level and Periphery Sustainability Consumers are drawn to
different attributes of products, settings and services.
Key Purchase Criteria: Periphery
Convenience
– Availability in stores; ease and efficacy of use
– “If it’s hard to find or I can’t figure out how to
use it, forget it.”
Price
– Consumer perception vs. actual price; how
added value is conveyed
– “Why would I pay 10 bucks for a light bulb?”
Personal Benefits
– Health is typically the primary benefit
– “I’m trying to do the right thing for myself and
my family”
Key Purchase Criteria: Mid-Level
Expert Opinion
– Weighing options; seeking direction; reinforcing
choices
– Ambivalent reliance on science (subject to change and
too complex)
– Derived from friends, family and colleagues: “My sister
knows all about this, she’s hard core.”
Experience
– Meaningful interactions with products and companies
– Relevant product design and use
– Opportunities to connect through stories about people,
places and processes
Knowledge
– About benefits (for self and others), company values,
resonance to way of living and goals
Key Purchase Criteria: Core
Greater Good
– Expanded consciousness; holistic thinking about how we
live and interact with each other and the world
– “The decisions I make and the things I do impact more
than just myself”
Partnership
– Striving for similar goals and ideals; like-minded; equal
participation and effort
– “We’re in this together”
Transparency
– Access to company values, policies, and practices; open
communications
– “Nothing to hide”
Authenticity
– True and consistent; values driven
– The “real deal,” “grassroots,” “the way things should be”
The Mid-level Represents the Largest Opportunity
The Mid-level is changing their attitudes and behavior regarding sustainable
products
– The Periphery isn’t putting their money were their mouth is and the Core is going
entirely outside of mainstream distribution channels to buy sustainable products
Periphery
Knowledge
Behavior
Values
Attitude
Mid-level
Core
just getting started
growing
gurus, experts
not consistent
fairly consistent
way of life
price + convenience
price + convenience
personal benefit
experience + knowledge
greater good + partnership
transparency +
authenticity
Doing something
Believes in improving own
quality of life when
possible
Makes changes to
lifestyle when it becomes
widespread and
convenient
Doing what you can
Has to balance
participation in products
with feasibility
Makes changes to lifestyle
when new information on
sustainability is available
Doing the right thing
Believes actions now
directly affect future
generations
Regularly makes changes
to lifestyle when new
information is available
The Mid-level Thinks About Sustainability Realistically
“Doing the right thing has to be balanced by my family
budget and by how our life runs.”
Food that’s healthier for my family and the planet | fresh, all natural, local, few
ingredients, little packaging, pesticide-free
Trade-offs occur in finding the balance between the right thing to do and what’s
reasonably priced, well known and trusted brands, “what my family will eat,” “picking
and choosing my battles”
Food producers need to show “value added” through sustainable practices,
attention to detail, extra care, passion about what you do
Sustainability means… “doing the right thing,” but also “doing what you can”
because there is “no silver bullet”
“Doing what you can” includes living more simply, giving back,
recycling, reducing waste, education, being connected
Key Triggers to Participating in Sustainability
Why Environmental and Social Well-Being Concerns
Have No Influence on Some Purchasing Decisions
65%
It takes too much
money.
57%
40%
29%
There are too
many other things
I have to worry
about.
33%
51%
23%
Acting alone, I
can't have much
impact.
21%
32%
14%
It is too
complicated.
23%
29%
12%
It takes too much
time.
Core
16%
22%
Mid-level
Periphery
2007 Sustainability Survey (n=1,489 consumers within the World of Sustainability).
Feeling that the Quality of Life Will Change for
the Worse
Percentage answering “much worse” or “somewhat worse” to the
question: “When you think about the direction things are headed, how you
think the quality of life will change in each of the following areas?”
Source: 2007 Sustainability Survey (n=1,489 consumers within the World of Sustainability).
Sustainability Perceptions are Evolving to be
More Proactive and Local
Personal, not political
Optimistic and hopeful
Focus on social elements
of sustainability
Small, easy, positive=
Mass participation
Sustainability Awareness Works from the Inside Out
The home is the place that is most stable and safe. The farther one ventures
outside a familiar environment (into the outside world) the more uncertainty
and risk one expects to encounter.
Products that clearly have a direct personal benefit to health and well-being
are the gateway to purchasing sustainable products. Therefore, food and
beverage products are top of mind when it comes to purchasing products with
sustainable values.
Sustainable Product Adoption
Systems Thinking and Interconnectedness
The ability and tendency to look “beyond the personal” is a marker of systems
thinking which believes that everything is interconnected. Examples of
systems thinking that motivate increased interest in sustainability include:
– Having children tends to dramatically increase mental and practical
investments in issues of sustainability
– Participating in outdoor recreation that centers on or around wilderness
areas brings face-to-face confrontation with balancing conflicting needs
– When a cherished “way of life” shared by many people comes under siege
of broader changes (when a future life that was assumed as a given by
the group becomes threatened) questions of sustainability are likely to
arise (e.g., “Will I have access to clean water?”, “Will I still be able to buy
local produce?”)
Sustainability and Food Quality
Shows respondents who “agree”. Source: 2007 Sustainability Survey (n=1600).
Sustainable Food Cues by Product Category
CATEGORY
SUSTAINABILITY CUES
Produce
local, organic
Chocolate
organic, fair trade, donation to charity
Coffee
local, organic, fair trade, shade grown
Salad dressing
organic, donation to charity
Seafood
wild
Cereal
organic
Juice
organic, indigenous support (e.g., Goji and Acai)
Eggs
local, free-range
Bottled water
natural sources, donation to charity
Grains
local, organic, environment cues
Meat and poultry
local, free-range, growth hormone-free, antibiotic-free
Wine
local, biodynamic
Bread
local, organic, artisanal
Tea
organic, fair trade
Cheese
local, organic, artisanal
Consumers Believe Businesses Should Provide Leadership
in Environmental AND Social Aspects of Sustainability
Most companies are only talking about environmental initiatives
when it comes to sustainability. These companies talk about
“green” as though it is the only element that consumers consider to
be part of sustainability.
Equally if not more important than environmentally responsible
business practices are human ethics and social responsibility.
Consumers expect and want to know that businesses treat
employees and other stakeholders well in terms of safety and
fairness.
Important Business Practices Influencing a
Consumer to Buy a Product
Shows agreement with “very important” and “somewhat important”.
Source: 2007 Sustainability Study (n= 1,600)
Strategic Guidelines Around Sustainability
Orient company innovation, communication and
experiences toward consumer definitions, not
industry definitions, of sustainability.
Health and wellness involvement is the
most significant connection point consumers
have as they enter the World of Sustainability.
Link personal health and/or wellness benefits to
sustainable products and services wherever
possible.
Stay cognizant of where products and
services fall on the sustainability adoption
pathway to determine which dimensions of
consumption to address and what key benefits,
language and visual cues to leverage.
Sustainability Language
The most relevant linguistic themes and imagery around sustainability are:
Hope
Reliability
Authenticity
Connection
Care/Nurturing
Simplicity
Responsibility
Control
Efficiency
Similar Values
Health
Simple Living
The most relevant linguistic themes and imagery for food specifically are:
Local
Fresh
Organic
Artisanal
Unpackaged
Seasonal
Strategic Guidelines Around Sustainability
Address key barriers to regular
participation: price, convenience and
availability.
Allow participation in products, services
and retail experiences to be flexible and
occur in the course of a consumer’s
everyday behavior (i.e., shopping at the
grocery store, dining out, at a social event).
Follow Core consumers to identify
possible future trends in sustainability.
Strategic Guidelines Around Sustainability
Open up” the business for direct
consumer input as well as transparency
about company processes, values, etc.
Communicate brand and company
narratives that connect consumers to the
people, places and processes that epitomize
your company. Show them how the company
is part of a community, and stay inclusive.
Create opportunities for consumers to
connect and share their experiences and
opinions with one another.
1621 114th Avenue SE | Suite 105
Bellevue, WA 98004
tel: 425.452.0818
fax: 425.452.9092
www.hartman-group.com
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