Decline in Consumer Confidence in “Green Products and Services”?

On the general topic of consumer choices relating to "Sustainable Lifestyle" – the findings of a recent survey are very interesting.

According to the survey: http://www.corporateresponsibility.net/2008/07/07/consumers-will-pay-for-green-products-but-are-more-sceptical/

QUOTE:
According to a green survey from Rackspace Hosting (PDF), 44 percent of respondents are willing to pay more for green products and services this year; down significantly from the 59 percent of respondents that were willing to pay more last year.
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“It’s interesting to see that customers still think green is very important, but today they may be less willing to pay more or trade performance for lower carbon emissions.

So, assuming that the results of the survey are valid, the question remains as to the significance of the trend: consumer willingness-to-pay higher prices for “green products and services” dropping from 59% (last year) to 44% (this year).

Does this represent a lessening of consumer concern for the major issues of environmental uncertainty (weather / climate), food prices, energy crisis, etc.? Or could the cause be related to an increased cynicism or skepticism related to other developments like all the mega-corporations that are suddenly “going green” for profit?

Those corporate eco/green self-labellers are, of course, in direct contrast to organizations that sell these products and services to support environmental initiatives/activities. If the on-going proliferation companies that have made the transition from {major polluters} to {green washers} to {green profiteers} are a main contributing factor to a loss of consumer confidence that would be unfortunate, since many smaller companies with genuine motives have been actively involved in promoting and expanding the market space for green/ethical/organic products and services for many years...

Report of Full Survey (PDF): http://www.rackspace.com/downloads/surveys/GreenSurvey2008.pdf

Some recent discussions related to this post:

http://www.theenvironmentsite.org/forum/environmental-news-discussion-forum/12769-decline-consumer-confidence-eco-products-services.html

http://www.sustainabilityforum.com/forum/sustainable-lifestyle/2734-decline-consumer-confidence-green-products-services.html

https://www.xing.com/app/forum?op=showarticles;id=10900411

http://discuss.greenoptions.com/viewtopic.php?f=38&t=583

http://www.environmenthub.com/posts/3377/default.aspx

Some further discussion related to this topic: http://www.corporateresponsibility.net/2008/07/18/csr-skepticism-high-because-of-greenwashing/

QUOTE
“…It is therefore not only important for companies to make their CSR values known and aligned to the consumer; it must be done authentically to promote trust in the brand, NMI says. While many consumers remain unsure of the details, the corporate world does, as a whole, appear to be making some progress…”

Full Article: http://www.environmentalleader.com/2008/07/17/corporate-csr-skepticism-fueled-by-greenwashing-washout/

"Green" products face test as economy worsens

Greenwire, 13 October 2008 -

While a new study says shoppers are increasingly factoring the environmental friendliness of products into buying decisions, "green" products face a tough road to broader acceptability as the United States slides toward recession. The price premium demanded for many green products remains the biggest obstacle to their mass-market appeal. But a deeper look into consumer habits and mindsets provides clues for companies looking to survive the economic downturn. Most Americans, especially young adults, now identify green products as "desirable," according to an online consumer survey by the Yale School of Management and McKinsey & Co. Green goods are also generally seen as being of higher quality than other products, and most U.S. consumers expect them to be more expensive.

Companies are also still facing difficulty gaining recognition for brands associated with the green products they market. When asked what comes to mind when they hear "green products," 42% of respondents named categories of products, like hybrid vehicles or fluorescent light bulbs, rather than a specific product or company brand. That finding echoes results of other studies that suggest most consumers do not recognize company efforts to go green to the extent that marketers would prefer. An earlier study by Lippincott and the Climate Group, for instance, showed that most consumers are blind to corporate climate change initiatives.

In the Yale and McKinsey study, 24% of respondents could name a company brand or product that came to mind when thinking of green products. Fully 27% of respondents could not name a company brand, product name or even a category of goods when asked to identify green products. But a deeper analysis of those 24% of respondents who did name a company product provides clues to where green product markets should focus sales efforts. While many may assume that the Toyota Prius would be the most commonly identified green product in the United States, most respondents named the Clorox Green Works lineup of concentrated laundry detergents and household cleaning agents. The reason, the study's authors say, has to do with what people look for in green products in their value chain analysis -- primarily at the level of consumer use and disposal, rather than the volume of raw materials that go into production. "Consumer use and disposal is where people want to see improvement," said Tamara Charm, a consumer insights expert at McKinsey & Co., at the launch of the survey results Friday.
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But the evolving economic landscape threatens to completely change the rules of the game. Lisa Klauser, vice president of customer solutions at Unilever, warned executives at the survey release that studies conducted by her firm show that a recession will have a "profound impact" on shopping patterns. While green products may have an advantage over others thanks to their emotional appeal, they will likely still have to win consumers over on pricing considerations as the drumbeat of glum economic reports encourages shoppers to retrench even further.

Judy Hu, executive director of advertising and brand at General Electric Co., said that the key to a successful sale could lie in marketing products in ways that address the whole range of shopping considerations. Those products that offer consumers ways to lessen their harm to the environment, feel good about their shopping choices and save money, whether at the immediate point of purchase or over the long term, could survive and even thrive in the wake of the financial crisis that is eroding the shopping power of Americans. "For most of our consumer products, there's definitely an emotional call," said Hu in an interview. But issues like rising energy prices and raw material inflation are not likely to go away anytime soon, so cost considerations are still very much in play, she said. Hu, originator of GE's "ecomagination" campaign, also emphasized product diversity and global reach as important factors determining how well companies can weather the financial crisis.

Selling almost anything in an economic recession will prove very tough. But the trend toward higher energy costs, burgeoning consumption in the developing world and greater social awareness of environmental degradation means companies would be wise not to abandon efforts to green their operations. Studies by Goldman Sachs, the Carbon Trust and the Carbon Disclosure Project all suggest that companies that emphasize green stewardship are better managed overall and face better business prospects in the future.

Read Full Article: http://www.wbcsd.org/plugins/DocSearch/details.asp?type=DocDet&ObjectId=MzE5Nzc
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