1. Driving Sustainable Consumption
Consumer Engagement
Overview Briefing
Introduction
This briefing document outlines the opportunities and challenges associated with encouraging consumer
engagement as related to sustainability and as a key dimension of the value proposition of companies
along the value-chain. The document was originally prepared as a briefing for the participants joining the
Consumer Engagement Working Group roundtable workshop in October 2009.
The document is structured in six parts: 1) an overview of the concept of consumer engagement based
around the sustainability agenda; 2) a summary of the current trends; 3) a vision for the future about where
we need to be to operate successfully towards a sustainable world; 4) examples of leading practices; 5) the
key challenges facing companies in looking to improve their consumer engagement around sustainability;
and 6) the business case for consumer engagement.
1. Overview of consumer engagement
One of the biggest challenges for consumer-facing companies is how to keep up with changing demand
patterns and the emerging communities of consumers that have aspirations not be met by current business
models and resource supplies. However, with sustainability, consumer businesses have the opportunity to
be market-makers rather than market-takers and thereby lead consumers, both old and new, on a journey
towards more sustainable lifestyles. This will involve more than just selling green products. It will require
encouraging a major shift in consumer attitudes away from wanting more resource intensive “stuff” towards
a different value set that is reflected in more considered consumption habits.
Companies will need to rethink the way they engage with consumers and explore the difficult boundaries
between collaborating to create a widespread sustainable consumption movement and competing in the
race to the top. The Consumer Engagement Working Group focused on the specific enterprise innovations
and collaborations which need to happen beyond current innovation and marketing practices to effect
fundamental shifts in consumer behaviour towards sustainable consumption.
2. Where are we today? Key facts and figures
Growing racks of green products in Figure 1: Opportunity to fulfil latent demand for green products1
supermarkets, more energy efficient TVs,
and board room strategies built around the
health and well-being of customers all point
to the increasing importance of sustainability
for consumers, companies, and
governments. Thirty per cent of consumers
now look for eco-friendly products and
packaging in their brand selection, and nearly
40% search specifically for organic products,
according to Information Resources. The
Consumer Electronics Association found 53%
would be willing to pay a premium for a TV
with “green attributes”, while a Deloitte
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survey found 95% of consumers willing to
“buy green” (Figure 1).
Yet the same survey revealed one in four
consumers do not know what a green product
is, and only 22% of the 6,500 shoppers
interviewed purchased a green product in
their surveyed shopping experience. This
suggests “an unfulfilled, latent demand for
green products that could be realized through
the right product development, in-store
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communication, and product availability” .
Consumers are still on a learning curve – with clearer, more effective in-store communication particularly
key to green purchases. Up to 30% are willing to pay a 10% premium for green products, but they also
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2. Driving Sustainable Consumption
Consumer Engagement
Overview Briefing
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expect better quality (e.g., fresh produce, energy efficient electronic goods) for their money . It is also
estimated that companies lose, on average, nearly 20% of potential purchasers when consumers are not
adequately informed about green product offerings. There is, therefore, a need to educate consumers –
particularly at the point of purchase – but also to improve the choice, quality, and supply of sustainable
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products .
The above sources of research focus primarily on how consumers purchase green products. It is not
surprising that most research is conducted in this area for several reasons. First, most research that is
publicly available tends to be focused around transactions where there is immediate money to be made, i.e.
purchasing decisions. Secondly, the situations in which purchases are made are finite and often quite
clustered, making data easier to gather, i.e. in retail shops of various types.
For many products, the greatest environmental impact actually occurs as the consumer uses a product over
its life. Think, for example, of electronics, which may consumer more than 60% of their total lifecycle
energy during product use. Many household and personal care products such as detergents or shampoos
use up to five times the energy and water during use in the home than they do during all other life cycle
phases combined.
However, when looking at how consumers behave when using a product, there are fewer incentives from
manufacturers and retailers to drive research -- and a much more fragmented base for exploration:
individual households. Even if consumers are empowered to make the right choices when purchasing a
product, there is still much progress to be made to get them to use it in the most efficient way for which it
has been designed.
3. Where we need to move towards for a sustainable world
How the collective consumption of the world creates value for business and prosperity and a better quality
of life for all citizens will be one of the greatest challenges to society over the next 20 years. The riddle of
prosperity and growth will be inextricably linked to the consumer, how they choose products, how they use
them, and ultimately, how they perceive and receive more value with less social and environmental impact.
In the future, consumers will be critical partners of companies in pursuing sustainable lifestyles
characterized by sustainable consumption of goods and services. Consumers will in many cases consume
less per person by volume, but will inevitably consume more by value as companies continue to improve in
meeting consumers’ evolving needs. Thus, business models will need to focus on defining the true value,
not volume, of goods and services sold. That is, it will be about consuming right, and consuming efficiently.
In this process, companies and consumers will be partners; companies won’t wait for consumers to direct
them down the path to sustainability but will instead use their marketing capability, understanding of
consumer behaviour, and connections with both the business and natural environment to offer attractive,
high-quality options that improve the natural environment while preserving resources and meeting
consumer needs.
Cognitive psychology in purchasing and using products and services is another frontier that builds on a long
tradition of science applied to retail spaces and store layouts. While many companies indicate that
consumers are difficult to follow, the future may lie in better engagement so that a company and consumer
can lead together on the journey towards sustainability. By better understanding the brain and how the
consumer makes decisions based on logical and social contexts, it will be possible to explore the social
contexts to overcome the challenges of collective action. According to Robert Putnam, Malkin Professor of
Public Policy at Harvard University, USA, social networks have a high return on investment when it comes
to predicting sustainable behaviours such as recycling.
However, this can open a certain side discussion that approaches some very taboo territory. If eco-
efficiency will not enable 9 billion people to live well, we will need to redefine what we mean by
consumption, as we shift from stuff to value, from quantity to quality, and from products to services. If we
include the necessary increases in prosperity and development for the other 80% of the world’s population,
we have an even greater challenge (Figure 2). The concept of a dematerialised economy is one that is
difficult to imagine blossoming out of our current system, but it is clear that a new capitalism is on its way.
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3. Driving Sustainable Consumption
Consumer Engagement
Overview Briefing
Figure 2: Human Development Index versus Ecological Footprint3
4. From the frontier – examples of current leading practices
Lifecycle Unilever and Procter & Gamble, among others, have been engaging consumers to
awareness change their washing habits in keeping with advances in technologies and detergents.
through Aided by enzyme suppliers such as Novozymes, manufacturers have developed
eco- detergents that allow washing at a reduced temperature, which reduces energy use
efficiency during the consumer use phase of the lifecycle. This new level of consumer engagement
has enormous potential in terms of avoided energy and water use, not to mention the
savings brought to the consumer. Critical to the widespread success of such programs is
their integration within strategic brands and flagship products, rather than aiming at a
green niche of consumer.
Reducing Customers at Tesco stores in the United Kingdom were happy to purchase reusable
use of shopping bags when the company began offering at least one Green Club card point for
disposable each bag used, depending on its size. Since the program was launched in August 2006,
shopping customers have used 2 billion fewer disposable bags. Tesco also introduced a line of
bags attractive and affordable shopping bags made from recycled plastic bottles. Reusable
bags are available at all Tesco stores in the United Kingdom, and the chain is expanding
the program to its stores throughout Europe.
Consumer After taking the number-one spot on Newsweek’s green ranking, HP pledged to further
awareness reduce product emissions and energy usage 40% from 2005 levels by 2011. Meanwhile,
of almost 24,000 people have downloaded Power to Change, HP’s nifty widget targeted to
electronics business users that reminds them to turn off their computers at night and tracks actions to
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energy use calculate energy and carbon impact on an individual and collective basis.
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4. Driving Sustainable Consumption
Consumer Engagement
Overview Briefing
Engagement In April 2009, Nestlé announced it was expanding the Healthy Kids Global Program
on health (HKGP) -- a global nutrition education program that reaches more than 10 million school-
issues age children -- from its current 30 programs to all countries where it operates by 2011.
The program is tailored to developing countries, where malnutrition is the main concern,
and to developed countries, where it is obesity. Nestlé is an example of a company that
has sought to change from strictly a “food and beverage company” to refocus on nutrition,
health, and wellness – and through this, grow its consumer engagement.
Responsible Interest in compact fluorescent lamp (CFL) bulbs has been building as consumers
retailing of become more aware of environmental issues. Traditional incandescent bulbs consume
CFL bulbs 70% more energy than CFLs and have a far shorter lifespan. Companies, including GE
and Wal-Mart, are trying to be more environmentally responsible by launching CFL
promotions. This has resulted in a transformation of consumer attitudes toward CFLs,
which have been slow to gain popularity since their introduction in the 1980s.
5. Key challenges – internal and external barriers to achieving sustainability
Consumer engagement with green products is growing: 34% of consumers systematically sought to buy
green products in 2008, up from 32% the previous year. The percentage who said higher prices would be
acceptable for green purchases rose from 20% to 24% over the same period2. But efforts to grow consumer
engagement with sustainable products face a number of hurdles (see Figure 3). Only when information,
choice, and product supply are in place will the market for sustainable products convert latent demand into
common buying behaviours.
The challenge, however, to “inform choice” should not be underestimated: consumers are bombarded with
information and ignore most of it most of the time. Recent Deloitte research involving more than 7,000
shoppers in Europe and the United States has highlighted the need to align messaging outside and inside
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the store if it is to be effective in influencing product choice . What’s clear is that even when choice and
product supply are in place, it will still require close collaboration between retailers, manufacturers, and
other influencers of consumer values to break current behaviour patterns that are often more about short-
term price and promotion than long-term value.
According to a recent survey of businesses from the Massachusetts Institute of Technology's Sloan School
of Management6, respondents view insufficient customer demand as the most significant roadblock in a list
of challenges impacting their organization’s ability to address sustainability issues. Among reasons
expressed were unclear benefits to consumers and lack of information for markets to compare sustainability
efforts. This also highlights internal barriers to consumer engagement, in that surveyed businesses see a
price on sustainability, both to their organization and the consumer.
6. Business case – why consumer engagement is critical
There are not only ethical and environmental benefits to reducing the impact of the consumer use phase of
products and services, but also significant opportunities for business, including:
• Brand: sustainability is increasingly influencing the brand image and consumer perceptions of
consumer industry companies themselves.
• Consumer choice: as companies educate consumers on the implicit and explicit value of
sustainable or conscious consumption, consumers become more informed, which can be good for
business:
o There is evidence that motivated consumers are willing to shift their brand loyalties to
“green” companies. And with green product availability and environmental awareness
increasing, sustainability is already becoming a key consideration factor in choosing a
brand, in addition to price and performance.
o Consumers may be willing to pay more for green/sustainable products; for example, for
food and consumer electronics, 20% to 30% of consumers are willing to pay up to 10%
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more for sustainable products . However, they expect higher quality products, cost savings,
or other benefits from their expenditure.
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5. Driving Sustainable Consumption
Consumer Engagement
Overview Briefing
• Employee engagement: consumers are also citizens as well as employees of large organizations.
The opportunity for consumer industry organizations to educate and inform their employees (e.g.,
by making sustainability part of a employee’s core competencies) will have an impact beyond just a
company’s boundary.
• New consumers: As the global middle class increases -- expected to triple by 2030, according to
Goldman Sachs -- there will be increased market opportunities. This increase not only means that
sustainable products can be further mainstreamed in developed countries, but also represents
purchasing power opportunities within previously small markets in developing countries.
• New Markets: Companies that put sustainability at the heart of innovation and develop leadership
opportunities within the industry as well as provide new and improved products and services will
help create further market opportunities not even predicted today.
Figure 3: Barriers to consumer engagement
Location Description
Limitations on data capture
Regulation
Data security / privacy
Insight driving innovation
among rivals o n green
p roducts
Competitive
External pressures
Volume of messaging
barriers
creating more “noise” –
h ard er to differentiate
Lack of awareness,
understanding or
engagement
Percep tion of green
Consumer
p roducts as more
behaviour expen sive
Barriers to
consumer
engagement Lack of engagement with
reuse and recycling
Data capture and
Technology management
Lack of support from key
internal stakeholders
Management
support
Internal Co mpeting priorities for
barriers investment
Business Lack of clear business case
models for some companies
Financial Lack of financial resources
resources to implement sustainability
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6. Driving Sustainable Consumption
Consumer Engagement
Overview Briefing
Endnotes
1
Finding the green in today’s shoppers: sustainability trends and new shopper insights, Deloitte, 2009
2
Capturing the Green Advantage for Consumer Companies, Boston Consulting Group, 2009
3
Global Footprint Network and UNDP via Gapminder
4
Strategy for Sustainability, October 09 Newsletter, Saatchi & Saatchi S
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Study conducted by Deloitte for the Coca Cola Retailing Research Council, Europe
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The Business of Sustainability, Massachusetts Institute of Technology, Sloan School of Management, 2009
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