Green products increasingly fill store shelves, promising health benefits, energy savings and environmental advantages ranging from more natural ingredients to reduced packaging.
But it all comes at a cost that Canadians are often reluctant to pay. The question for marketers is how to change minds – and open wallets – at the checkout.
Recent studies have shown that while we support eco-products in principle, we’re reluctant to pay a premium for them, as household budgets have tightened, skepticism and confusion over green claims and product performance have grown and worries over global warming have eased.
“When it comes to the environment, consumers say the right things, and may want to do the right things – but aren’t always willing to pay for it,” says Carman Allison, the director of shopper and industry insights for the Nielsen in Canada. “Their priority is the sustainability of their wallet.”
Nielsen’s 2011 Global Online Environment & Sustainability Survey found that just 12 per cent of Canadians (compared with 22 per cent globally) are willing to pay more for eco-friendly products, while four times that many opt for whatever saves them money.
The Nielsen Global Survey of Corporate Citizenship, to be released next week, shows that while 67 per cent of Canadian consumers prefer to buy products from companies with programs that give back to society, only 33 per cent are willing to pay extra, compared with 46 per cent of respondents internationally.
“Consumers are very much motivated by price,” Mr. Allison says, while immediate concerns over global warming are trumped by their worries over increasing fuel, food and utility prices as well as the economy, debt and job security. “The priorities have just shifted,” he says, and eco-consciousness has “taken a back seat.”
Given such findings, marketers say the best way to sell green products is to deliver a message primarily about the products’ personal benefits and advantages that consumers understand and care more about.
“Being green is not how you’re going to a marketplace,” says Libby Bernick, vice-president of consulting for UL Environment, a consulting practice that helps companies sell green products and owns TerraChoice, an Ottawa marketing firm that administers EcoLogo, a certification program for green products.
Ms. Bernick tells green marketers to “tailor your message to what consumers want to hear about.” This means talking about a product’s primary purpose, like the fact that a laundry detergent will effectively clean their clothes or shampoo will leave their hair bouncy. The fact that it’s eco-friendly is an “Oh, by the way factor,” she says. And messaging related to green benefits should be aligned with target customers’ precise motivations and interests, be it saving money on energy, avoiding extra packaging or using products that don’t contain harsh chemicals.
“We say, ‘It’s better for you and it’s also good for the environment,’” explains Gina Conte, president of Frank T. Ross & Sons Ltd., a Toronto company that has been making green cleaning and personal care products, like the Nature Clean brand, since 1963.
Ms. Conte says her company is facing competition from others that have recently jumped on the green bandwagon “without the full chemistry to support it.” Given the recession, some consumers have been reluctant to pay the 10 per cent to 20 per cent premium for green products, but those whose health is compromised don’t compromise, she says, and “they do their homework,” carefully reading labels and looking for how a product will affect them and their families.
“People care about their own environment, themselves,” Ms. Conte says of her customers’ motivations. “It’s me, my environment, then the environment.”
Ms. Bernick says that some companies chastened by claims of “greenwashing” and consumer confusion over what “green” means are selling “stealth green products,” thus not trumpeting their environmental merits at all. Others are becoming more open about their product ingredients, where they come from and how they’re made, and are educating consumers, for example, through in-store kiosks and videos.
Mr. Allison says that Canadians are increasingly shopping for deals, with 33 per cent of all transactions involving sales, up from 27 per cent in 2007-2008. He says that an ever-increasing number of grocery sales, currently 38 per cent, happen in discount retailers, which usually don’t feature green sections.
Where green products are sold, the best sales strategy to adapt at the shelf is “line pricing,” meaning that they are priced at similar levels to conventional products, although they often come in smaller containers or amounts. Another option is to put green items in larger, economy sizes, which brings down their cost per ounce or per use.
Products selling at a premium must “show tangible benefits to consumers,” Mr. Allison adds, with an emotional appeal and unique advantages for individuals. “In today’s environment, just standing on green alone is not enough.”
Special to The Globe and Mail
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