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Sustainability Is No Longer Just a Niche Market

Concerns for the health of our environment and people have been an important issue for decades. The once unofficial corporate response to these concerns has grown from a pestilent “They’re just a bunch of tree huggers”, some time ago, to general acceptance in the business world. The realization that sustainable products and services were experiencing a growing consumer base prompted new ventures to emerge and develop a loyal following for products that were healthy alternatives for consumers and the overall environment. Today, even the most well-established companies are realizing the need to develop a new strategic approach to sustainability.

The projected sales value of sustainable products in the United States is on the rise and is expected to top $150 million by the end of 2021. Sustainability has shifted from a niche consumer interest to a mainstream value over the past few years as consumers favorably embrace organizations that recognize and deliver on the message. Initially finding its footing in the food and apparel marketplace, sustainability has expanded across all industries. The arrival of two younger generations is the reason for the powerful new trends.

A recent survey by First Insight indicates that 73% of surveyed shoppers 22 years old and under would pay more for sustainable items. While Gen Z’ers were most willing to pay more, the study showed that sustainability is becoming more important in cross-generational buying decisions as well. In 2020 consumers overwhelmingly indicated they wanted to reduce the impact they have on the environment, a response that revealed a formidable shift in buying behaviors across all generations of consumers. Today, the majority of consumers are seeking brands whose actions and values are aligned with personal values as 57% of consumers, across generations, report that they are willing to pay more for brands whose products are sustainable and environmentally responsible.

While successful niche players are mastering the message, many brands are struggling to adjust to the trends. Unsupported platitudes, claims, and buzzwords are common among those brands who fail to understand this emerging market. Consumers are increasingly tech-savvy and educated thanks to the internet and social media. Stunts, pranks, and unsubstantiated claims are leading many consumers to distrust brands that tout “green” intentions but fail to deliver on the message. The Forrester report highlights brands that are successfully making the transition but also points to those whose efforts are missing the mark when it comes to understanding the profitability and functionality differences to a sustainable business effort.

Successful brands are innovating and taking a holistic approach to connecting with consumers. Thomas Husson, Vice President and Principal Analyst, Forrester says, “They truly understand their customers’ emotions, demonstrate empathy, innovate with new product experiences, and authentically engage their communities. They can justify premium prices by rethinking value chains to stay competitive and by embracing new distribution channels and concepts. When brands are both sustainable and profitable, they often have a holistic sustainability approach and think of sustainability as driver of their business transformation.”

With consumers’ changing purchase preferences based on products’ social or environmental impact, sustainability-linked consumer products are growing nearly six times faster than others. It is vital that marketing professionals get the content right by building the message based on proof-supported facts and avoid taking liberties with the truth and exaggerated claims. Sarah Shilling, CMO at UNLIMITED Group, recently said, “Sustainability communications are no longer a hygiene factor, but a priority factor. Many customers now look for sustainability as one of the priority filters to purchase, often over price.” She went onto say, “Sustainability is unforgiving. More so than price, delivery and quality. If you get your sustainability messages wrong or your promises are lies, then it’s a long road to try and claw that back.”

While last year’s pandemic resulted in consumers being distracted by acts of self-preservation, interest in environmental issues and sustainability remained high on the lists of things consumers valued, an indication the emerging trend to sustainable marketing is no passing fancy for brands looking to be successful in the future.