Lauren DeVestern
Partner, L.E.K. Consulting
Mark Boyd-Boland
Partner, L.E.K. Consulting
Businesses need to adapt to the changing demands of consumers whose buying habits are increasingly influenced by sustainability issues.
Growing numbers of consumers are increasingly focused on the green credentials of brands they buy from and associate with.
Within this changing landscape, businesses, manufacturers and retailers must respond to keep pace with the shifting demands of increasingly savvy consumers.
Consumer attitudes
Global management consulting firm L.E.K. Consulting has been monitoring consumer attitudes towards sustainability, drawing them together in a landmark study, ‘Green Light for Sustainability – Shifting consumer perspectives across the globe’, from the organisation’s Sustainability Centre of Excellence.
Mark Boyd-Boland, an L.E.K. partner in London with a focus on retail and consumer brands, explains: “We were minded to conduct bespoke proprietary research to gain a critical understanding of what sustainability means to consumers in some of our core markets. Particularly, the journey consumers have been on and how sustainability is influencing their decision-making across a broad range of consumer activity.”
This involved establishing how important sustainability was to them and the extent to which they were prepared to change spending habits.
Key consumer types
The study focused on the US, the UK and Australia, speaking to a sample size of nearly 3,000 that included nearly 1,000 people in each region with a cross-section of gender, age and income wealth.
The company defined four consumer types: Advocates, who care about sustainability and see it as integral to their identity; Learners, or recent converts to sustainability issues; Talkers, who understand sustainability but have a disconnect between caring and acting; and Stragglers, who are generally not yet as concerned and not yet changing their behaviours.
Boyd-Boland says the main point of engagement across the demographics is environmental practice and reducing carbon footprint, whilst younger people were also concerned about the societal aspects of a business and its working practices.
Some companies have been forward thinking and sustainability is even integral to their brand identity.
Lifestyle changes and brand substitution
Lauren DeVestern, from L.E.K.’s Boston office, has led much of the organisation’s work on consumer macro trends. “The data suggests that all age groups increasingly care about sustainability, however, younger consumers are more likely to actively change their behaviours; both findings give us confidence that the shift towards a more sustainable future will continue as younger consumers age.” One aspect that surprised the researchers was the rate of consumers actively considering changing their shopping repertoire to be sustainable and the strength of conviction of people willing to allocate additional household spend to support this.
“Consumers are actively switching brands and products for sustainability reasons and they are doing so based on an increasing number of sources of information – in other words, they are becoming savvier,” she says. The degree to which consumer groups will actively switch away from a brand that has weaker sustainability credentials is also a risk for companies, according to the findings.
Business response
What is critical is how businesses are responding to these changes, and this will form ongoing research. At this stage, DeVestern says very few companies are emerging as “beacons of best practice.” “Some companies have been forward thinking and sustainability is even integral to their brand identity, but there are many brands that are not, and this really should be core to their strategy because of the consumers they serve,” she says.
“This requires an understanding of the consumers they serve and what they care about,” says DeVestern. Companies are even being “called out” when they do not fulfil sustainability pledges.
Brand implications
The research found that groups of consumers will switch brands and pay more based on sustainability credentials. This means that there needs to be some “bold consideration from retailers and brands” about where they want to be in 5-10 years’ time, says Boyd-Boland. L.E.K. will utilise the findings to inform businesses about the direction of travel in terms of sustainability from the consumer perspective.