Capturing the Green Advantage for Consumer Companies

Capturing the Green Advantage for Consumer Companies

          
Title image

Capturing the Green Advantage for Consumer Companies

  • Add To Interests
  • SAVE CONTENT
  • PRINT
  • PDF

  • Related Articles
    Green Expectations

    Consumers around the world are very worried about the environment. In fact, about two-thirds of our survey participants—especially those in France and Italy—said they believed that the environment is in bad shape. More than 80 percent of the Japanese consumers we surveyed claimed that environmental problems are a primary threat to society, while U.K. and U.S. consumers ranked concerns about the environment just below concerns about the current economic downturn. On average, only about 12 percent of consumers said they were skeptical about threats to the environment.

    When asked who should address environmental issues, consumers said that they should shoulder some of the responsibility. Nearly half (46 percent) of survey participants strongly agreed that the actions of individuals can help protect the environment. But many seem to hold companies to a higher standard. Fully 73 percent of consumers consider it important or very important that companies have a good environmental track record. (See Exhibit 3.)

    exhibit

    We found that the term green is recognized the world over as shorthand for environmental consciousness. Yet when we asked consumers precisely how they define green, their answers varied depending on where they live and the type of product. Of course, survey participants everywhere believe that being green entails activities that have a direct and positive impact on the environment, but many also include activities that could be considered a part of social responsibility, such as compliance with fair-trade requirements. Among Italians, for example, excluding animal testing is considered an important component of being green, whereas that factor matters much less to Japanese consumers. Some consumers even believe that handmade or locally grown products qualify as green. The importance of recyclable materials also varies greatly across markets; for example, they are highly relevant in the United States but carry much less weight in Germany. 

    exhibit

    Although some countries are trying to define green products and businesses more precisely, no clear global standard has emerged yet. Therefore it is critical that companies understand what green means to the consumers in their targeted markets and in specific product categories.

    Meeting this goal may be harder than it appears, since consumers are notoriously poor at understanding or communicating the complex motives that drive their behavior. For instance, consumers in our survey who make a point of purchasing green products claimed that they do so primarily for altruistic or health-related reasons—because they care about the environment and want their families to live in a better, healthier, and safer world. Only a few consumers claimed that they purchase green products for other reasons, such as to save money. This finding held true across all the countries surveyed.

    Interestingly, when we asked consumers what they are doing for the environment, the most popular of the actions cited save money as well. (See Exhibit 5.) These include turning off home electronics when not in use, recycling or reusing products, using less water, and using energy-efficient appliances and light bulbs. Even more consumers plan to take these steps in the future. In contrast, consumers are not nearly as likely to take less convenient or more costly actions, such as buying a hybrid car. Not surprisingly, many companies have found that the most successful programs to protect the environment are those that also help consumers save money. (See “Tesco’s Fashionable Bags.”)

    exhibit

    Tesco’s Fashionable Bags

    Customers at Tesco grocery stores in the United Kingdom were happy to purchase reusable shopping bags when the company began offering at least one Green Clubcard point for each bag used, depending on its size. (Green Clubcard points have the same value as regular Clubcard points but are awarded for actions that benefit the environment.) And customers don’t have to use Tesco’s bags to rack up points: they get credit for using bags from other retailers, too.

    Since the program was launched, in August 2006, customers have used 2 billion fewer disposable bags. Preferring carrots to sticks, Tesco doesn’t charge its customers for disposable bags when they forget their own reusable ones (as many other retailers do), because, as one Tesco official explained, “even the most committed greenies occasionally forget to bring their shopping bags with them.” But to reduce those lapses, Tesco sent its Clubcard customers a key fob that carries a reminder to bring their own bags.

    Last year, Tesco introduced a line of attractive and affordable reusable shopping bags made from recycled plastic bottles and designed by Cath Kidston—one of Britain’s best-loved designers. The company originally commissioned six designs, but the bags were so popular that it added two more, including one for Christmas. Each bag costs £3.50, of which Tesco donated 50 pence in 2008 to Marie Curie Cancer Care, its charity of the year.

    Reusable bags are available at all Tesco stores in the United Kingdom, and the chain is expanding the program to its stores throughout Europe. In Poland, for instance, where customers use 400 million disposable bags each year, it has extended its line of reusable bags to include a jute bag that sells at a rate of 30,000 per month. Tesco also offers smaller carrier bags at stores where customers tend to buy less, such as Tesco Express convenience stores.