As businesses navigate the troughs presented by 2nd and 3rd waves of Covid pandemic, there are some significant changes in consumer behaviour that have to be considered to rework their game plan. I wish to draw upon the outcome of a study conducted by PWC – Global Consumer Insights Survey 2020.
|Customers’ buying habits will become more volatile; price and value will become paramount|
|Customers will need an experience that reinforces safety; they will want experiences that can be great anywhere|
|Businesses are expected to get the balance right between digitisation and the traditional store format|
|Consumers will experiment with and accelerate new channels, such as mobile and online grocery|
|Customers expect to be shown consideration for their well-being in the products and services you offer|
|They’ll expect businesses to make sustainable, ethical choices that recognise stakeholders as much as shareholders|
Across countries surveyed consumers have uniformly expressed their desire for transparency, sustainability, cleanliness, community living, and social consciousness. Before the pandemic, 43% of our global respondents also said they expected businesses to be accountable for their environmental impact. And consumers’ focus on sustainable business practices has surged during the COVID-19 crisis.
The survey also found an increase in the number of people making sustainability-conscious decisions year over year. The percentage of survey respondents who avoid plastics when possible rose from 41 percent to 45 percent, and the percentage of those who consciously choose sustainable ways to travel rose from 28 percent to 32 percent.
Faced with declining economic conditions, loss of incomes, consumers have clearly tightened their purse strings, and even prioritised their purchases to essentials. Many consumer product companies are reworking their product mix, adjusting their prices or doing whatever it takes to simply stay afloat. Companies, even those with sustainability in their DNA, might put some or all environmental, social, and governance (ESG) initiatives on hold to stem revenue losses.
In addition to data from research on consumer preferences, a long term guidance can be sought from the better performance of big ESG-focused funds were compared to S&P 500 for the year. Also there are many examples of ‘sustainability-focussed’ companies that have recovered faster from this downturn.
How should businesses respond?
This dichotomy in consumer motivation — between caring about a cause but also about functional features and price — makes pursuing a sustainability agenda complicated. Yet doing so can help to differentiate a brand, delight customers, and ultimately create brand and financial value. Companies will need to be creative and more focused than ever, though, to make their sustainability strategies financially viable, considering reduced corporate income and consumers’ renewed frugality.
Those looking to market sustainable offerings should consider the following suggestions.
Offer Something More Than Just Sustainability
Companies need to innovate on product attributes, packaging or delivery models to offer something superior than unsustainable alternatives. For instance, recycling company TerraCycle offers a circular packaging and delivery system called Loop that sends customers products in well-designed containers that can be returned for cleaning and reuse. Two-thirds of Loop shoppers indicate that the higher-end aesthetics and functionality of the containers are also important factors for choosing LOOP other than the program’s sustainability benefits. The design & aesthetics of the bags and accessories made by ReCharka [https://www.ourbetterplanet.com/Store/recharkha] is a big appeal factor for customers in addition to knowing that they are made of recycling plastic wrappers of packaged food.
Minimize the Sustainability Price Premium
Price can deter people from buying sustainable offerings, if they are priced significantly higher than non-sustainable alternatives. And in this time of pandemic-induced crisis, with many consumers suffering financial losses, price might be more important than ever. So achieving cost efficiency is critical to keeping prices low. Companies can do this through product innovation and restructuring their supply chain. Magan Khadi is one such brand [https://www.ourbetterplanet.com/Store/magan-khadi] that provides sustainable livelihood to many farmers growing cotton, employees weavers with artisanal backgrounds to produce fabrics that are naturally dyed and most importantly at affordable prices for customers.
Educate Consumers About Sustainability Features and Build Trust
Many consumers find it time-consuming to gather information about a brand’s sustainability features — additionally, they don’t trust claims, or they find them confusing. This lack of understanding is a key barrier to consumers buying sustainable brands, especially when it comes to traceability of input materials, production processes, fair wages & labour condition. So, brands need to clearly communicate with their customers in concrete terms, disclosing information such as the amount of packaging saved or amount of waste prevented from adding to the landfill or how they’ve enhanced certain working conditions. One such brand on OBP platform is Rimagined [https://www.ourbetterplanet.com/Store/rimagined] upcycles old sarees, denims, wool waste, automotive tyres into beautiful articles of home décor. The customer is informed about the nature & quantity of waste that has been sustainably used to create the new product.
Give Sustainable Consumption Social Currency
Sustainable products often involve hand-crafted, limited quantity production, storytelling, and significant intangible value. The decision to buy a sustainable product (as against a non-sustainable alternative) is an outcome conscious shopping driven by certain beliefs. Sustainability features also seem to grant emotional benefits, including the satisfaction of consuming more consciously and subtly signaling status.
Sustainable companies lead many social or ecological initiatives that offer customers opportunity to continuously engage with the brand and reinforcing this status.
Eco Femme [https://www.ourbetterplanet.com/Store/eco-femme] is one such women-led social enterprise that produce washable cloth pads, provide menstrual health education and promote menstrual practices that are healthy, environmentally sustainable and empowering. The company runs programs like:
- Pad for Pad: menstrual health education and free pad gifting programmes to adolescent girls
- Pads for Sisters: menstrual health education and process for introducing cloth pads to marginalised women; cloth pads are discounted so as to be affordable
The pandemic has only reinforced it, but has also posed the biggest test to meet the goals. Consequently it could also inspire a new level of corporate creativity and innovation along the sustainability value chain.