Despite rising cost pressures, an increasing amount of consumers are regarding sustainability as an important reason to buy a certain brand. We look at what this means for business.
With UK inflation still above 10%, most people are looking at cost as one of the main drivers of brand choice. As food staples such as milk (up by 26%), cheese (22%), and butter (a staggering 29%) rocket up in price, consumer attention is increasingly focused on price and sticking to a budget. But another factor in the weekly shop is gaining traction in the minds of consumers: sustainability.
NielsenIQ has just released their latest Sustainability Report, which shows that 42% of respondents consider the sustainability or environmentally friendly claims of a product to be “much more important” than two years ago, with a further 27% seeing them as “a little more important”.
The growing importance of sustainability in the purchase decision is largely due to consumers being a lot more informed about the environment and how their choices can affect a brand’s performance. However, many companies are still missing out on the business potential of strong environmental values and action.
“Consumers want help to live and consume sustainably,” said Nicole Corbett, Vice President of Thought Leadership at NielsenIQ. “However, not all corporations have sustainable practices. Over the past decade, consumers have been calling for a green revolution that has not materialised, and greenwashing and inaction from brands and retailers has left consumers with varying levels of trust in these parties to deliver.”
The young lead the way
It’s perhaps no surprise to discover that young people show more concern for the climate and sustainability than other age groups. In a survey by market research company Savanta, climate change ranked as a top three concern among 18-24 year olds, behind cost-of-living and mental health. Younger consumers are also the most likely (22%) to have participated in a boycott of a brand or product because of sustainability issues.
“What we’ve seen in the last couple of years is a lot less brand loyalty, particularly among the younger generation,” said Nikki Lavoie, EVP of Global Experience Strategy at Savanta. “Let’s see what Generation Alpha does when they’ve got their spending power. If you are not playing the sustainability game, pretty soon you’re not even going to be in the running.”
Future-proof your business
It’s clear that while inflation, energy and other costs are the current areas of concern for companies and brands, in the long term, sustainability must become a key pillar of their core business strategies. Many economists refer to sustainable products as luxury goods – for example, electric vehicles – but setting in place strong eco-friendly practices and halting any greenwashing will go a long way to future-proofing your company.
“The changing climate of sustainability has reached a critical moment, and the next five years will bring dramatic change as companies transform to meet new demands, guidelines, and realities of doing business,” states the NielsenIQ Sustainability Report. “Authentic action from proactive and genuine companies will have a strategic advantage as industries scramble to meet requirements and mandate sustainable efforts.”
To view the 2023 NielsenIQ Sustainability Report, go to https://nielseniq.com/global/en/insights/analysis/2022/the-changing-climate-of-sustainability-has-reached-a-critical-moment/