The Sustainability Imperative
Committing to sustainability might just pay off for consumer brands, according to the 2015 Nielsen Global Corporate Sustainability Report. In the past year alone, sales of consumer goods from brands with a demonstrated commitment to sustainability have grown more than 4 percent globally, while those without grew less than 1 percent.
And brand trust is important here. Almost half of U.S consumers (49 percent) list brand trust high on the list of sustainability factors that influence their purchasing decisions.
Willingness to pay a premium
Forty-four percent of U.S respondents say they are willing to pay more for sustainable goods. And it’s no longer just wealthy suburbanites in major markets who are willing to open their wallets for sustainable offerings. Consumers around the world, across income levels and categories, are willing to pay more if doing so ensures they remain loyal to their values.
Sustainability sentiment is particularly consistent across income levels. Those earning $20,000 or less annually, in fact, are actually 5 percent more willing than those with incomes greater than $50,000 to pay more for products and services that come from companies that are committed to positive social and environmental impact (68 percent versus 63 percent).
Age matters
Despite the fact that millennials are coming of age in one of the most difficult economic climates in the past 100 years, they continue to be most willing to pay extra for sustainable offerings — almost three out of four respondents (73 percent) in the latest study, up from approximately half in 2014. The rise in the percentage of respondents under 20, also known as Generation Z, who are willing to pay more was equally strong — from 55 percent of total respondents in 2014 to 72 percent in 2015.
Health and wellness benefits are drivers
Consumers are looking for products that are good for both them and society. A product’s health and wellness benefits are influential purchase decision drivers for more than one-third of U.S respondents (41 percent). Products made with fresh, natural and/or organic ingredients carry similar weight with consumers (38 percent). Finding opportunities to bridge the two is a powerful and impactful way to connect with consumers.
The environment
When it comes to sales intent, commitment to the environment has the power to sway product purchase for 27 percent of U.S consumers surveyed. Commitment to either social value or the consumer’s community is also important (influencing 25 percent and 27 percent of respondents, respectively). Retail data back up the importance of these influences. In 2014, 65 percent of total sales of consumer goods measured globally were generated by brands boasting marketing that conveyed commitment to social and/or environmental values.
TV ads
Speaking of marketing, TV ads highlighting a company’s commitment to positive social and/or environmental impact are influential in the path to purchase for 20 percent of U.S respondents. Brands that actively reinforce societal commitment must amplify and socialize their message using multiple sources and distribution channels.
In a world of choice, the reasons we purchase one product over another can be driven by a multitude of factors. As concerns about the environment and corporate sustainability continue to build momentum around the world, understanding the connection between sentiment and purchasing actions has never been more important.