full_43064.jpg

Consumers less willing to pay more for sustainable products during cost-of-living crisis

Consumers less willing to pay more for sustainable products during cost-of-living crisis

41% of consumers are currently willing to pay more for a product they believe to be sustainable, compared to 57% in 2020

Capgemini Research Institute’s annual consumer trends report, What Matters to Today’s Consumer, analysed the shopping habits of 11,300 consumers in 11 countries. It found that 73% of consumers are making fewer impulse purchases, while 69% are cutting back on non-essential expenses such as electronics, toys, and dining out.

The cutbacks in spending are related to stretched finances, with 61% of consumers concerned about the current cost-of-living crisis. In total, 44% of consumers have claimed they are reducing spending levels, compared to 33% in November 2020.

This has a direct impact on brands trying to sell sustainable products. Sustainability remains an important shopping criterion for many, but only 41% of consumers are currently willing to pay more for a product they believe to be sustainable, compared to 57% in 2020.

As such, the report suggests that brands will need to re-evaluate pricing strategies to provide affordable and sustainable options to consumers. Loyalty programmes, including servitisation and incentivised take-back schemes, can help build customer trust in the long term. The report suggests that businesses look to innovate operations and supply chains to reduce manufacturing and production costs to pass savings onto the consumer.

”There’s an opportunity for retail businesses to dramatically reimagine their operational strategy in order to weather this storm and pass on price benefits to consumers,” Capgemini’s global retail lead Lindsey Mazza said. “By identifying new revenue streams, creating new markets, transforming operations, and optimizing costs, businesses can succeed without compromising on sustainability or overall customer experience.

“Harnessing technology for intelligent demand planning, inventory management and automated operations can not only help reduce costs and maintain margins, but also yield sustainability benefits for organisations.”

The survey also highlights that consumers are looking elsewhere for discounts and lower costs. Two-thirds of respondents said brands need to lower prices, while 64% are now buying from hypermarkets, discount stores, or looking for cheaper label or low-cost brands.

Sustainability slipping

Last summer, B Corp-certified recipe box service Gousto polled 250 businesspeople in the UK. It found that one-third of British business owners were de-prioritising sustainability amid rising energy and commodity costs. But this same research found that consumer demand for sustainable business is not wavering.

Of the business owners, one-third stated that environmental sustainability is not currently a priority for them. Less than one-fifth (17%) stated that a priority focus for the near term will be maintaining their environmental credentials.

Gousto found that most of the general public wants businesses to continue prioritising environmental action – pointing to an opportunity to couple affordability and profitability with sustainability. Almost eight in ten (78%) people polled by Gousto are concerned about the impact the cost crisis will have environmentally, given the potential for policymakers and businesses to backtrack.

Six in ten of the people surveyed said they would prefer businesses to do more to offer sustainable options at this moment in time. Half said they are keen to make “significant” changes to their lifestyle in a bid to cut their environmental impact – particularly if this results in cost savings.


© Faversham House Ltd 2023 edie news articles may be copied or forwarded for individual use only. No other reproduction or distribution is permitted without prior written consent.


Source link

Tags: No tags

Add a Comment

Your email address will not be published. Required fields are marked *