Sustainable Brands Outperform Others
While a variety of factors influence consumer buying habits, one key metric is proving to be increasingly more important to shoppers – sustainability. Brands that marketed their sustainable efforts in 2014 saw increased sales at higher rates than others according to the 2015 Nielsen Global Corporate Sustainability Report. Sales from brands with a demonstrated commitment to sustainability saw growth of more than 4%, while others grew less than 1%.
Specific products and offerings do not necessarily have to be sustainable in nature for brands themselves to be viewed as sustainable in the public eye. A corporate commitment to environmental and/or community values plays an important role in consumer perception.
Two-thirds of consumers are willing to pay more for sustainable brands
Among the 66% of global respondents willing to pay more, over 50% of them are influenced by key sustainability factors, such as a product being made from fresh, natural and/or organic ingredients (69%), a company being environmentally friendly (58%), and company being known for its commitment to social value (56%). Sales, and coupons didn’t even make the top five. For this group, personal values are more important than personal benefits, such as cost or convenience. – 2015 Nielsen Global Corporate Sustainability Report.
Age plays a role in the willingness to pay more for sustainable products as well. Of consumers under the age of 20, know as Generation Z, 72% are willing to pay extra for sustainable offerings. This number has increased from 55% in 2014. Comparably, almost three-out-of-four Millennials are willing to pay more. More than half (51%) of Baby Boomers are also willing to spend more for sustainable brands.
“Consumer brands that haven’t embraced sustainability are at risk on many fronts,” says Carol Gstalder, SVP, Reputation & Public Relations Solutions for Nielsen. “Social responsibility is a critical part of proactive reputation management. And companies with strong reputations outperform others when it comes to attracting top talent, investors, community partners, and most of all consumers.”
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