How Sustainability is Driving Consumer Purchasing Decisions and Manufacturer Success
Sustainable and eco-friendly products, which may have been just a marketing strategy or half-hearted effort in the early 21st century for companies, are quickly turning into a trend they must address to stay competitive.
Today’s consumers, led by millennials and Gen Z, are driving the demand for sustainability and are willing to look past potential savings to support environmentally conscious products and companies. According to Nielsen’s 2015 Global Corporate Sustainability Report, of consumers say they’re willing to pay a premium for goods produced and sold by sustainable brands, including 73 percent of millennials. That’s more than enough to make corporations, manufacturers and retailers take notice of the sustainability trend and address it seriously. So, how are they adapting?
Walking the Walk
Becoming a sustainable brand is no longer just about having a "green product." Sustainability has evolved and broadened to include environmental, economic and social aspects. Corporate initiatives are being implemented to improve efficiency from top to bottom, including ensuring an ethical and eco-efficient supply chain, enterprisewide recycling programs, releasing corporate sustainability reports, and creating organizational positions to manage these efforts, such as a chief sustainability officer. Consumers are holding organizations accountable, spending their dollars with those that are genuinely adopting green policies.
Benefits of Being Green
Sustainability doesn’t just have to be about winning a customer’s business though. There are additional financial benefits for organizations that are willing to commit to going green. This can include tax incentives, improved employee morale, and reduced operations costs thanks to decreases in raw material waste and logistical inefficiency. Additionally, offering extended service contracts is another excellent way to prolong product lifespans and reduce the quantity that gets dumped into landfills.
Achieving sustainability will develop lasting brand loyalty among your customers, who will then go on to spend 67 percent more than new customers. Second only to product quality, sustainability and ethical business practices are the biggest reason consumers conduct repeat business with a brand.
Sustainable Consumer Product Solutions
Talking about sustainability in practice is one thing, but there are many industries and organizations that are already making great strides. The consumer electronics industry has been steering towards sustainability for a while now just by nature of product improvement and industry trends. Smaller, more compact product designs require fewer materials in manufacturing and make delivery transport more efficient. Furthermore, major tech companies have been striving to develop more environmentally friendly components as the electronics boom has evolved over the last two decades.
The packaging industry has also made enormous progress alongside the expansion of e-commerce. with smaller, efficient sizes and reduced material manufacturing needs are now commonplace. Fashion, apparel, cosmetics, furniture, and many other consumer products industries are all taking significant steps to reduce material waste and phase out harmful substances used in production. Efforts that may have just been lip service in the past are now the predominant business strategy of the day.
All of this innovation is being driven by cost savings and customer demand, as in the U.S. and the United Kingdom want brands to help them be eco-friendlier in their daily lives. If your products can do just that, and your organization can reflect the values of sustainability that the modern society holds dear, you'll succeed in increasing your market share and solidifying your customer loyalty long term.
Steve Davidson is vice president of Fortegra’s Warranty Product Group, where he spearheads business development and client support for the company’s consumer and commercial product service contracts, helping deliver customized risk management, regulatory compliance, and administrative solutions. A graduate of Eastern Illinois University with more than 25 years of industry experience, Steve has played a critical role in growing Fortegra’s warranty business, advancing the company’s service offerings through retail and commercial distribution channels.