Scaling up to mass markets: what next for sustainable brands?
Sustainable development is “transforming consumers, marketing, organizations, and communities dramatically,” explain Laurie Ann UNDERWOOD (IÉSEG) and Lydia PRICE (CEIBS) in a *chapter of a new ESG White Paper published by the China Europe International Business School (CEIBS). The authors find that sustainable consumption is growing significantly and believe that “mass-market scale” could eventually be reached, but warn that serious obstacles must first be overcome. These obstacles include: economic drivers that are leaving consumers financially strapped and greenwashing that is leaving consumers skeptical and jaded. To help brand managers meet such challenges, the experts outline the key trends to track and share proven strategies for strengthening consumer demand for sustainable brands.
12/08/2023
4 min
Share
The Changing Consumer
Professors UNDERWOOD and PRICE argue that there is plenty of recent evidence to highlight that consumer demand for sustainable products is rising. 78% of interviewees in a Kantar (2022) survey of 30,000 consumers in 32 countries said they want to buy environmentally sustainable products. One of the questions is whether consumers are willing and able to pay higher prices for such products and therefore, the gap between intention and purchase.
The authors point to some encouraging data which highlights a willingness to spend more on sustainable products particularly among the younger generations (notably the Gen Y and Z). However, they also highlight that it is crucial for brands to demonstrate authenticity and offer tangible evidence of progress in terms of sustainability because the Gen Z, notably, can be more skeptical of sustainability claims.
The experts also outline how certain types of research (psychology, sociology and behavioral) can serve marketers to better understand and develop effective sustainability-related messages for their products.
The Changing Role of Marketing – the move towards authentic conversations
Marketing communications have evolved from traditional sales “pushes” of old to common personalized sales “pull” to the even more recent “authentic conversations about themes of shared interest with consumers”.
“In an era in which individuals and social groups can appropriate brand images and symbols for their own intent, it is critical for managers to co-create meaning with their target audiences,” the authors note. “Brand purpose, brand values, and sustainability/social activities provide rich content for finding common ground and fueling interactive conversations.”
They discuss the concept of leveraging communities, a concept put forward by McKinsey as one of the big ideas of the decade, noting that the most credible and authentic campaigns avoid vacuous claims about improving the world, and instead deliberately spark discussions that showcase a brand’s personality, value proposition, or other distinguishing features.
The experts also highlight the importance of aligning sustainability and marketing – as only actions that demonstrate a fit with brand values, features and/or strategic priorities “merit marketing attention and effort”.
The Changing Organization
“We’ve heard it repeatedly from global leaders and institutions: this is the decade to take action on sustainability pledges and aspirations”, the authors note, adding that the “voice of the market is now added to that of thinktanks, regulators and activists”.
The two experts stress that citizens now expect companies and brands to take a stance on important social and environmental issues and that shoppers want transparent and credible updates about how their favorite brands are ‘walking the talk’.
They believe that, while a range of actions are possible, research has shown that companies successfully monetizing social/sustainability efforts tend to focus their time and resources on a few issues that matter to the brand and to the world (Gatzer and Magnin 2021).
The Changing Community – collective problem-solving and knowledge sharing
Not only are brands now engaging with communities of buyers, “they also are forging new industry alliances and support structures to share the pains and gains of mastering new market realities”. The experts note that two important trends for companies are: the building of system-level problem-solving ecosystems and the open-source sharing of tools, frameworks and playbooks.
Highlighting that no company or brand can solve today’s complex sustainability challenges alone, they explain that ‘multi-player collectives’ are starting to show progress. They cite the examples of the app Too Good To Go (https://toogoodtogo.ca). This platform links consumers to businesses producing food waste (restaurants, grocery stores) to “make sure good food gets eaten.”
The 2020s are witnessing a rise in rise in the level of collaboration and sharing of resources between organizations that are working in the same sector. “Faced with the reality that social and environmental gaps pose a threat to all players in major industries, and moreover, that the time to close these gaps is running dangerously short, pioneers and first-movers are openly sharing playbooks, toolkits, and wisdom through conference talks, webinars and publications.” They cite the example of the industry association Sustainable Brands in this respect.
* “Scaling Up to Sustainable Mass Markets” by Laurie Ann UNDERWOOD (IÉSEG) and Lydia PRICE (CEIBS) – a chapter in the CEIBS 2023 ESG (Environmental, Social and Governance) White Paper which is available here.
