Customers are not paying a premium for "sustainable" products yet. The figure is as low as 1% in some countries, and only marginally better at 7% in others, according to a report released this morning by the Boston Consulting Group (BCG).
The numbers: The report, which is based on a survey of 19,000 consumers across the US, Japan, Germany, France, Italy, China, India and Brazil, has found that while up to 80% of consumers said they are concerned about sustainability, only 1% to 7% have paid a premium for sustainable purchases.
- However, focusing only on these two extremes—consumers who are paying a premium for sustainable products and services and those who merely express concern about sustainability—conveys an incomplete picture of consumers' actual behaviour, the report commented.
- Consumers care about climate and sustainability and want to do their part—yet only 20% said they believe they can personally have an impact.
- About 70% admitted to feeling wary of corporate sustainability claims and commitments.
- The report, titled Consumers Are the Key to Taking Green Mainstream, considers how to accelerate consumer uptake of sustainable products, services, and behaviour.
- The greatest concern about sustainability comes from consumers in China (93%) for categories such as home care, cars, grocery retail, apparel, and skin care products and Brazil (89%) for select categories including home care, cars, and PCs and tablets. Among developed markets, Italy shows the highest level of concern (87%), particularly in electricity providers, home care, luxury, and PCs and tablets.
- Only 7% to 16% of consumers cited sustainability as one of their top three reasons to purchase.
- However, 20% to 43% could be persuaded to make sustainable choices if the products or services deliver on other related needs.
What they remarked:
It's easy to interpret these signals as a lack of consumer readiness, but companies will never maximize the potential of sustainable products and services if they focus only on consumers who are willing to pay a premium," said Aparna Bharadwaj, a BCG managing director and partner and global head of BCG's Center for Customer Insight, who coauthored the report. "There's a significant number of 'in between' consumers who are just on the threshold of embracing sustainable products and services. The key question is, 'How do we encourage these consumers to act?'"
— Aparna Bharadwaj
Managing Director & Partner / Global Head
BCG / BCG's Center for Customer Insight
By understanding consumers' core needs, and by removing real or perceived barriers through innovation and communication, companies can significantly increase sustainable outcomes. Making the attribute of sustainability an 'and,' not an 'or,' will be a win-win for everyone.
— Lauren Taylor
Managing Director & Partner
BCG
