The Lower Number of Eco-active Customers
According to a study conducted by Kantar, the number of environmentally conscious individuals is declining! In 2021, 22% of global consumers identified themselves as environmentally conscious; meanwhile, in 2022, the number decreased to 18%. Simultaneously, the percentage of individuals who disregard environmental concerns has increased by 7%—from 37% in 2021 to 44% in 2022. One thing is sure: businesses must adapt in order to withstand this phenomenon and continue to thrive.
THE BURDEN ON PEOPLE’S MONEY AND BELIEFS
The study attributes the shift in people’s attitudes to the worsening economy, concerning geopolitics development, and increased skepticism about corporate promises. In September, the inflation rate was 8.2%; this rising number reduced people's purchasing power. Apart from that, the cumulative effects of the pandemic’s fallout and the repercussions of recent conflicts and violence led people to believe that the environment was not the most pressing issue facing the world. Due to these factors, environmental consideration when purchasing has decreased. Moreover, 53% of consumers surveyed agreed that "companies only care about profits, and eco-claims are just another marketing tool." The reason for this is partly due to the rise of "Greenwashing"—doing environmentally beneficial action merely for the purpose of virtue signaling without taking any concrete action. As a result, many shoppers have a less positive perception of "eco-friendly products," which are also often seen as "goods with a premium price," so they purchase fewer of them.
BUSINESSES MUST TAKE ACTION
As inflation and geopolitics are macro-issues, businesses cannot do much in this regard. However, they have the opportunity to tackle the elephant in the room—the fact that many still don't trust their eco-friendly actions. As greenwashing runs rampant, brands must prove that they have risen above. Now is the time to integrate the Triple Bottom Line (Profit, People, and Planet) into strategy and operations. Rather than focusing on one or two "eco-friendly" product lines to capitalize on consumer trends, businesses must now refurbish their entire value chain, from suppliers to distributors, to cause the least amount of environmental damage possible. In terms of People, companies must uplift the quality of life of their employees and also support the development of their operation’s surrounding communities. By allowing consumers to see the sincerity in companies' actions as the economy improves, consumers are more likely to have a favorable opinion of the firms.
There is still a rainbow behind the cloud: Kantar also projects that in an “optimistic case,” consumers’ demand for eco-friendly products could rise to as high as 35% in 2027. This presents a glimmer of hope for any brands that are now bogged down in sales reductions. By making changes sincerely and thoroughly, businesses can persuade people to understand their true intention to make the world better. In the long run, this will result in more sales and GREATer trust between consumers and brands, and it all begins with the mindset.
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