Green May Be Ho-Hum for the Holidays, But It's Here to Stay

So far, this holiday season has seen a rather muted push on green by retailers, both in terms of the products they sell and the messages they communicate to consumers. Marshal Cohen, Chief Industry Analyst at NPD Group, recently suggested that such lack of enthusiasm by retailers reflects waning interest in green. Cohen stated: "It's basically a card that a lot of people played while it was hot and trend...and it got overplayed."

Indeed, early signs suggest that retailers left their Birkenstocks home for the holidays. While most retailers are taking steps to green their operations and supply chains, few have taken steps to green the shopping experience. Reuters recently reported that retailers such as Target, Wal-Mart and J.C. Penney recognized green as a trend but does not have plans to promote green merchandise this holiday season (Barneys is apparently a notable exception). A spokesman for J.C Penney added:

"It's something that is growing in importance with the customer...[but it's in] its early days."

But, could it be the case that after so much hype early in the year, the green trend has faded just as it was getting off the ground?

Marketing Green believes just the opposite: as a trend, green is just getting started. Quite simply, the apparent lack of enthusiasm shown by retailers this holiday season reflects the fact that we are still early on the adoption curve. Here's why:

Green products popular today are not necessary gift ready. Green products that have been adopted by the mass market - including compact florescent light bulbs and hybrid cars - may not make the best stocking stuffers. Moreover, unlike organic foods, clothes made from organic cotton have not been adopted by the mass market yet. As such, it is not surprising that we do not see a sudden surge in demand for these items this season.

Consumers may not equate green with spreading holiday cheer. When it comes to giving a gift that is overtly green, consumers may worry that they may be perceived by friends and family as the Grinch. While social norms are changing, being green today is still in many regards a personal virtue rather than societal expectation. As such, gift-givers may fear that giving a green gift may be perceived by recipients as politicizing the holidays.

Retailers fear being accused of greenwashing. Today, few standards are in place to determine how green is green. Without them, retailers are left to their own devices to determine what is eco-friendly - and, as a result, are left exposed to criticism by outsiders who may think otherwise. As such, many retailers today are focused more on greening their internal initiatives than greening specific products.

While interest in green may wax and wane, marketers must remember that we are still in an early adoption cycle for green. Regardless of how successful this season is for green, as a trend, green is here to stay. In fact, there are five global influencers that will ensure that as a trend it grows, spreads and matures.

Changing physical environment. While the melting of the ice caps may still be an abstract concept for most, consumers are beginning to experience erratic weather patterns that are likely - though not certainly - being caused and/or exacerbated by global warming. Indeed, Oxfam recently reported that weather-related natural disasters have increased four-fold over the past two decades while geologic-related ones (eg, earthquakes, volcanoes, etc) have remained steady. Such visible signs will likely increase and intensify with time, providing a constant reminder that something in our world is not in balance.

Increasingly concerned consumers: In the US today, consumers have a high awareness of climate change as an environmental concern, but arguably relatively low awareness of the severity of its impact - especially on the poor who are least responsible for its cause but most vulnerable to its adverse affects. As Hans Verolme, Director of Global Climate Change Programmes for World Wildlife Fund stated, "There's no escaping the facts: global warming will bring hunger, floods and water shortages."

Marketers should be prepared that such a realization may cause a sea change in how American consumers view the brands that they purchase. Americans may be voracious consumers, but they do not like to do so at other people's expense. As a consumer issue, therefore, climate change mitigation may be similar to enforcing fair labor laws or worker safety practices - it is just what you do or risk a backlash from consumers.

Leadership by business: Some may find it surprising that many global corporations are strong proponents of action on climate change. Indeed, 150 leading companies - including US multinationals Coca-Cola, GE, Nike, Johnson & Johnson and Sun Microsystems - have already signed a communique on climate change and presented at the UN conference this month in Bali that calls for legally binding targets for carbon emissions.

So why would global companies lead the charge? Corporations know that mandates on carbon emissions are inevitable. The sooner government acts to set acceptable carbon emission levels, the faster business can respond and plan for the future - by modifying capital investment decisions or commercializing new products, for example.

Moreover, once global emission caps are put into place, standards will be developed within each product category that determine how green is green. Without standards today, companies decide for themselves to what level they should green their products. In this situation, the burden is on the consumer to decide how competitive products stack up while leaving well-intentioned companies vulnerable to greenwashing accusations by critics that disagree with their claims.

Where standards have emerged though, green products have taken off. One great example is the creation of the Leadership in Energy and Environmental Design (LEED) certification that set standards for green buildings. The result: 20% growth in green buildings in 2005, followed by 30% growth in 2006.

Watchdog role of Non-Governmental Organizations (NGOs): In many ways, NGOs serve as watchdogs for industry on environmental issues. Today, such organizations enjoy increasing clout, fueled by increased membership and financial backing over the past few years. More than ever, NGOs are flexing their muscle by challenging corporate activities that they deem as destructive to the environment or deceptive to consumers.

Interestingly, even companies that are viewed as leaders on green do not get a pass by NGOs when activities are deemed inconsistent with their competitive positioning on green. For example, despite (or as a result of) earmarking a combined $70 billion toward green investments and loans, both Bank of America and Citigroup were recently the target of a grassroots campaign by Rainforest Action Network to the fact that these banks also fund coal-fired plants, a primary contributor to global warming.

Today, consumers can also serve as watchdogs as well by rating corporate green activities through sites such as Greenwashing Index, Do the Right Thing and Climate Counts.

Involvement by governments: Today, there is growing global support for action on global warming. Signs of this momentum are perhaps nowhere more prevalent than in the US and Australia - two countries that have long been holdouts for global action. Over the past couple of weeks, there has been a sea change in Australia, as Kevin Rudd, the newly-elected Prime Minister, signed the Kyoto accord as one of his first acts of government. Moreover, the US Senate Committee on Environment and Public Worksvoted last week for an ambitious 70% reduction in carbon emissions by 2050.

So, marketers should take note. Early signs are that green may not bring holiday cheer to retailers. Nonetheless, green marketers should remain steadfast. Though consumer focus on green may fluctuate, green as a trend is here to stay. Five key influencers will not only ensure that is the case but accelerate its growth over time.