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Despite demand, retailers appear in the dark on consumers’ sustainability sentiment

by | Jan 24, 2022 | Public Relations

Consumers have been very outspoken about their expectations that brands and retailers make their products and operations more sustainable, but new research from next-gen experience management firm First Insight reveals that retailers need to listen more closely to their customers about their sustainable shopping preferences.

The research, in partnership with the Baker Retailing Center at the Wharton School of the University of Pennsylvania, discovered that a profound sustainability knowledge gap exists between these two groups—which presents opportunities for retailers not only to bolster their reputations and enhance consumer loyalty but also to increase profits.

Retailers were surprised to learn that consumers are willing to spend more for sustainable brands

While two-thirds of consumers say that they would pay more for sustainable products, two-thirds of retailers believe that consumers would not be willing to spend more for sustainable brands.

Equally revealing was the discovery that nearly three-quarters of the consumer respondents value product sustainability over brand name; nearly all (94 percent) of the retailers believe the opposite, saying that brand name would be more important to consumers than sustainability.

Despite demand, retailers appear in the dark on consumers’ sustainability sentiment

Moreover, retail executives rank brand-operated resale/recommerce programs lowest when asked what type of sustainable shopping formats consumers would utilize the most. However, 41 percent of consumers say they already shop at brand resale/recommerce programs, such as those offered by Patagonia, Lululemon, or Levi’s.

“This report clearly demonstrates that retailers are leaving money on the table. Brands and retailers must listen to the voice of the customer on issues as critical as sustainability,” said Greg Petro, CEO of First Insight, in a news release. “Consumers want more than performative measures from retailers and brands when it comes to ESG priorities, which will only become more important as Gen Z grows in influence.”

Despite demand, retailers appear in the dark on consumers’ sustainability sentiment

“It’s imperative for retailers to understand their customers’ values so that they can adapt for the future,” said Professor Thomas Robertson, Academic Director of Wharton’s Baker Retailing Center, in the release. “For example, half of retail executives believe that price is the primary reason consumers shop across recommerce formats. In fact, only 27 percent of consumers agree that price is their motivation, while a combined 54 percent say that they shop resale because they care for the environment and prefer sustainable or circular shopping. Brands such as Vestiaire Collective and Farfetch Second Life know that there is a big future in resale, even at luxury price points.”

Despite demand, retailers appear in the dark on consumers’ sustainability sentiment

An earlier First Insight Wharton Baker Retailing Center report demonstrated that Gen Z leads the way in sustainability and has outsize impact on older generations, especially their Generation X parents. Gen Z’s influence extends to shopping behaviors, including in resale, with sustainable-first purchase decisions becoming more prevalent among all generations.

Other key findings include disparities on how consumers wish to be compensated for resale items, how much and how often consumers actually use recommerce, and price targets for resale items.

Ironically, all of the executives in the data set—fully 100 percent—assume that consumers would rate retailers low on transparency around their sustainability efforts. Yet consumers give retailers more credit, with 59 percent indicating that they feel retailers are being sufficiently transparent.

Despite demand, retailers appear in the dark on consumers’ sustainability sentiment

Download the full report here.

First Insight partnered on this report with the Baker Retailing Center at the Wharton School of the University of Pennsylvania as part of the company’s ongoing commitment to providing actionable consumer insights to the retail industry. Since 2007, First Insight has been helping retailers and brands to operate more sustainably and make better decisions by using the Voice of the Customer and predictive analytics to refine buys and eliminate poor performing offerings before costly development and inventory investments are made.

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Richard Carufel
Richard Carufel is editor of Bulldog Reporter and the Daily ’Dog, one of the web’s leading sources of PR and marketing communications news and opinions. He has been reporting on the PR and communications industry for over 12 years, and has interviewed hundreds of journalists and PR industry leaders. Reach him at richardc@bulldogreporter.com; @BulldogReporter

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