Green Marketing Gets Even Murkier: The State of Green Business 2010
Editor's Note: To celebrate the launch of the third annual State of Green Business report, we will be highlighting over the next two weeks the 10 big trends that are shaping the future of the greening of mainstream business. You can download the report for free here, and read all 10 trends on GreenBiz.com.
It stands to reason that during a recession -- with high unemployment, job insecurity and a dramatic upswing in foreclosures and bankruptcies -- shoppers would stick to basics: tried-and-true, affordable products. If so, that would be bad news for most green products, with their unfamiliar brands and often premium prices.
But you wouldn't know that from reading the polls. A succession of market research surveys during 2009 seemed gushingly optimistic about consumers' willingness to embrace green shopping. Example: Four out of five people said they were still buying green products and services, even in the midst of the recession, according to a study by Opinion Research Corp. Another found that shoppers from São Paolo to Shanghai were ready to shell out more cash for eco-friendly products, even as the recession ate into their buying power. Indeed, a handful of surveys even claimed that consumers were willing to pay more for green products.
What in the name of Al Gore is going on?
It's a complicated question, to be sure. Consumers, say the experts, are continuing to make green choices, but they're being pickier than ever about doing so. As a result, green marketing, always a challenging proposition, has become all the more challenging.
One thing seems clear: Premium pricing for green is a non-starter for most shoppers. That's expected when people are pinching pennies, euros and yen. And consumers' willingness to make green choices seems more likely when there's a personal benefit in addition to a planetary one. As such, there's a growing appetite for products that can cut utility bills, like energy-efficient appliances and light bulbs.
Even still, there remains a great chasm of ignorance -- "radical transparency" notwithstanding -- that's keeping consumers dazed and confused when they shop, and more than likely is tamping down interest in green purchases.
For example, one study found that while most consumers view "energy efficiency," "smart energy" and "energy conservation" as positive concepts, few fully understand what those and other energy-related terms actually mean. Another survey found more Americans buying energy-efficient light bulbs, but the majority remain in the dark about the federally mandated phaseout of incandescent bulbs that starts in two years.
And then there's the Snackwells Effect, named after the Nabisco cookies that are marketed as diet foods, being lower in fat or sugar than regular cookies. Studies found that people offset those low-cal benefits simply by eating more of the cookies -- after all, they're "healthier," right? Similarly, studies have found that people lose 5 percent to 12 percent of the expected energy savings from efficient light bulbs because they leave them on longer, and 10 percent to 30 percent of the savings of efficient furnaces because they raise the thermostat. After all, they're more efficient, right?
All of this has made green marketing far more perplexing than most marketers bargained for, requiring more complex and nuanced messages and value propositions. In reality, the proposition is probably rather simple: Consumers want products that aren't just greener, but better -- that offer some kind of personal benefit, whether they're cheaper to buy or own, have enhanced features or higher performance, are more convenient, less wasteful, healthier for their families, or simply cool.
That message was driven home by analysts at GfK Roper, which for years has conducted regular "Green Gauge" consumer surveys. "What's interesting is that when you look at and compare some of the attitudes and behaviors in the U.S. to other developed markets, the U.S. is actually more like a developing market in terms of the way they think and behave green," Tim Kenyon, GfK Roper senior market analyst, told GreenBiz.com. "In a developing economy, there's much more of a personal self-interest involved in making green purchasing choices, and less emphasis on the greater good," similar to what Roper was seeing in the U.S.
American consumers, it seems, may have more in common with their counterparts in Chad, Chile and China than one might ever have imagined.
Tomorrow: Green Innovation Becomes a Great Idea