Will consumers ever get over the price hurdle for sustainable goods?
Despite heightened awareness over climate change threats in recent years, surveys continue to battle it out over how much of a premium consumers are willing to pay for sustainable goods.
A recent survey of 3,000 U.K. consumers from Asda, for instance, found 55 percent prepared to make significant lifestyle changes to reduce their carbon footprint, including recycling (89 percent), turning off lights or devices when not using them (84 percent) and driving less (52 percent).
Fifty percent, however, say they are not prepared to pay more for greener everyday items such as milk and bread. Seventy-six percent said lower prices would help them shop more sustainably.
Asda said the findings suggest that greater collaboration is needed between suppliers, manufacturers and retailers to remove the price barrier.
A survey of about 10,000 consumers across 17 countries from consultancy Simon-Kucher & Partners taken in July found 60 percent rating sustainability as an important purchase criterion. Only 34 percent, however, were willing to pay a premium for sustainable products. Gen Z (39 percent) and Millennials (42 percent) were more willing to pay up compared to Gen X (31 percent) and Boomers (26 percent).
Simon-Kucher said the findings showed “there is a market for ‘mission-driven green’ companies.”
More encouragingly, a survey of 1,200 U.S. consumers from October from B2B software comparison website Capterra found 75-to-80 percent willing to pay higher prices for sustainable items across food and drink, apparel and household products categories. About 60 percent would pay “a little more” or “moderately more” across categories.
A July survey from First Insight and Wharton’s Baker Retailing Center of more than 1,000 U.S. consumers found 68 percent willing to pay more for sustainable products, up from 58 percent from a survey taken in 2019. The improvement was attributed to heightened eco-consciousness from older generations.
“The global pandemic caused many to rethink their consumption and its impact on the health of the planet, yet Gen Z have been consistent in remaining true to their sustainability values while also educating and influencing the generations that came before them,” said Greg Petro, CEO of First Insight, in a statement.
- Lower prices are key for consumers to shop sustainably – Asda
- Recent Study Reveals More Than a Third of Global Consumers Are Willing to Pay More for Sustainability as Demand Grows for Environmentally-Friendly Alternatives – Simon-Kucher & Partners/Business Wire
- Capterra research finds 53% of consumers are influenced by a company’s sustainability actions when purchasing products – Capterra/Business Wire
- The State of Consumer Spending: Gen Z Influencing All Generations to Make Sustainability-First Purchase Decisions – First Insight/ Baker Retailing Center/Business Wire
- Acosta Research Shows 65 percent of Shoppers Want Retailers to Invest More in Sustainability – Acosta/PRNewswire
- Global Report: Who Cares Who Does 2021 – Kantar
- Global: Consumer willingness to pay for environmentally friendly products – YouGov
DISCUSSION QUESTIONS: Do you think most consumers are willing to pay a little more, a lot more or no more for sustainable products? Will that change much in the years ahead or does pricing and/or messaging around sustainable goods have to be reassessed?