Sunday, February 15, 2009

Helping American Consumers and Companies Go Green in Tough Times

by Tom Hinton

Despite the harsh economic climate that ushered in 2009, American consumers remain resolute in their commitment to Sustainability and Going Green. This is good news not only for American businesses but also for our struggling global economy. How so? Over the past few years, Americans have realized that despite the bad economic news, the one area where they can have a positive impact is in doing business with companies that embrace eco-friendly products, services, and Green practices. Stuart Larkins, a senior vice president of search operations at DoubleClick Performics and a contributor to Chief Marketer, wrote “The budding green movement has environmentally conscious consumers buying everything from energy-saving light bulbs to fuel efficient cars, to eco-tourism vacations.”

Surveys by the American Consumer Council reveal that one possible reason for the uptick in sales is that consumers are willing to pay a few extra dollars to support those companies that are viewed as champions of Green practices, Sustainability, and Corporate Social Responsibility (CSR). Advertising Age reported on the second-annual Edelman Good Purpose study, which found “more than half of the 6,000 consumers surveyed would be prepared to pay more for a brand if it supported a good cause even in the throes of a recession. And, more than two-thirds said they would be willing to pay more for eco-friendly products.”

Perhaps this explains the modest jump in reservations at environmentally-friendly hotels and stronger sales for hybrid automobiles. While 2008-2009 business has dropped severely in the hospitality and automotive industries, reports are showing gains in these two niche areas. Industry leaders like Starwood Hotels & Resorts Worldwide and Radisson Hotels as well as Honda Motors are reporting modest growth among certain eco-friendly brands.

Green initiatives by business and government are having a positive impact on consumers. A recent Yahoo-commissioned study reveals that three-in-four consumers define themselves as “Green.” According to the survey, the Green market has grown far beyond its roots as a niche, with 77 percent of consumers identifying themselves as "Green." Over half (57 percent) said they made a Green purchase decision in the past six months. Green consumers are most likely to take sustainability into account when buying cleaning and personal care products. About 23 percent of consumers responded as "deeply committed." A larger segment, about 24 percent, defined Green as "trendy." Not surprisingly, this was true particularly among young consumers, ages 18-34.

Another fast growing eco-friendly arena for business growth is E-Commerce. According to the American Consumer Council, E-Commerce offers three benefits to consumers. First, it provides consumers fast and easy access to Green products and information. Secondly, E-Commerce allows consumers to contribute to environmental wellness by reducing their carbon footprint. When consumers purchase online they are not leaving their houses, driving their cars, or polluting the environment. And, thirdly, online buying allows consumers to research a company’s website to determine whether or not it is socially responsible and genuinely committed to Green practices.

According to DoubleClick Performics' 2008 Green Marketing Study, 60% of respondents who make online purchases say it is important that a company is environmentally conscious. The study surveyed 1,087 adults to better understand consumer behavior and attitudes regarding green marketing.

Despite the rush of so many companies to climb aboard to Green bandwagon, there are some concerns that have been raised by consumer organizations. One such concern raised by the American Consumer Council is the deluge of website information and how consumers decipher it. Jean Greer, who administers the American Consumer Council’s Green C Certification program says, “When a company provides too much green information it can be confusing and overwhelming for consumers.”
Another concern is green washing. The American Consumer Council is waging a battle against unscrupulous companies that misstate their commitment to Green or provide misinformation in order to capitalize on environmentally-conscious consumers and exploit them. When the American Consumer Council identifies a company engaged in green washing practices it demands the company cleanse its website or face a national boycott by ACC’s 85,000 members. So far, the consumer pressure by ACC appears to be working.

Another area where the American Consumer Council is trying to help companies think Green and act social responsibly is during the Christmas holiday season. It’s reported that every year more than 100 million trees are destroyed, three million cars' worth of energy is consumed and significant amounts of greenhouse gases are emitted into the atmosphere in order to produce, distribute and dispose of holiday catalogs and direct mail pieces. With the advances in technology and customer data management more companies are recognizing the benefits of posting their catalogs on their websites and reducing their marketing waste. ACC has encouraged companies to post their catalogs on their websites and reduce the number of copies printed and mailed.

Yet, despite the impressive commitment of so many companies to “Go Green,” consumers remain skeptical of big businesses’ green promises. According to a February 2008 survey of 1,080 adults from corporate strategy firm Cone and the Boston College Center for Corporate Citizenship, only 47% trust companies to tell them the truth in environmental marketing. Given that low figure, companies are going to have to work hard to demonstrate their commitment to consumers and, in turn, engage in environmentally-friendly practices and causes that result in consumer loyalty to their brands. The challenge is this. Much of the hard work must be done outside the traditional marketing and advertising channels that companies are used to. Media ads are not the answer. Instead, consumers are looking for the personal touch -- that is, actionable programs by companies that demonstrate their commitment to Corporate Social Responsibility as well as eco-friendly programs that support local non-profit organizations and their Green programs. When companies can find ways to personally touch consumers they will win customers for life.

About the Author. Thomas Hinton is the president and chief executive officer of the American Consumer Council, a non-profit consumer education organization that administers the Green C Certification program. ACC was established in 1986 and has over 85,000 members in 38 states. ACC is headquartered in La Jolla, CA. For more information, call 1-800-544-0414 or visit: www.americanconsumercouncil.org

2 comments:

Anonymous said...

good one... thanks for sharing....


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VishaL said...

Hi I m vishal21,this article is really helpfull to understand american consumer's trend..