Consumers Love Sustainability, but Balk at Paying for It

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One of the hot topics among retail execs these days is how frustrating it is to effectively take advantage of the intense consumer interest in sustainable practices and products.

One of the major problems is that sustainability has become a branding quagmire.

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Instead of building credibility, Buyers surveyed by First Insight Fast forward to telling us that the shouting match of marketing brags — about sourcing, ingredients, recycling, and more — is confusing.

When it comes to clothing, 40% of shoppers have recently bought a . surveyed by Fidelity International He said he felt “poorly informed” about the stability. They also pointed out that they are “highly interested” in learning more about a brand’s labor and environmental practices before buying.

This is the serious new world of retailing.

It’s not enough to market the sex appeal of that flashy new line of footwear. The brand must be able to tell a solid story:

Where do their goods come from?

· How do they get here?

Who made them?

· How were they made?

What materials were used?

What happens when they go bad?

Most importantly – why are they better or more valuable than competing brands?

This was easier said than done in March when consumers were still feeling financially fit. The majority said they were prepared to pay more for durable goods. Three months later, hit by inflation, we are all having second thoughts…

A global phenomenon that has been dubbed the “say-do” difference.

Yes, consumers want highly durable goods. But when they are being reminded daily about record-setting prices for gas, food and housing, they won’t pay extra for them. There are a growing number of experts in the news feed who say the economy is headed for a recession.

In any event, consumers these days are spending their disposable dollars on travel, food, and other experiences they were denied for two years. That new sofa can wait.

At industry meetings I attended recently in London and New York, top managers were anticipating all these challenges, and asking each other, Now what?

No return from there. At the corporate level, sustainability has a seat in every meeting and a row in every budget. This is the law. This is the foundation upon which trillions of dollars are invested. Fortunes are being spent on ambitious, enterprise-wide sustainability and governance programs (esg), and baked in a longer-term budget.

a recent estimate Consulting giant McKinsey & Company estimates that, over the next five years, there will be at least 10 percent sustainability-driven growth in retailers’ annual capital budgets. In select categories, the authors predict an increase in cost of goods sold by 8 percent. Staggering numbers for a business accustomed to narrow margins.

Who is going to pay the bill?

The McKinsey report points out that while “some investors may accept lower returns on equities in the short to medium term … others may penalize stocks” when those expenses begin to hit the bottom lines. It could be years before investors would assign a so-called “green-asset premium” to the shares of retailers.

For now, stablecoins are opaque and expensive, somewhat like cryptocurrencies.

You cannot see or touch it. Most people struggle to define it. Yet in surveys, almost everyone thinks we should “do more” about it.

As a former retailer, I would ask customers What “more” looks and sounds like, and then figuring out how to deliver it.

Credit: www.forbes.com /

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