In a post I wrote last week, I proposed that in the future, people in developed markets will come to value brands that satisfy their self-actualization needs. As this shift takes place, people will have a greater tendency to choose brands that help them develop their personal capabilities and perhaps express their larger concerns for humanity and the planet at large.
I think it is interesting to consider this idea at this particular point in time, when many commentators are suggesting that people’s values are changing. According to these pundits, the recession has triggered long-lasting changes in consumer values, not just in terms of willingness to spend on luxuries but also in a greater selectivity about everyday purchases. Excess is out; ethical purchasing is in. If that is the case, then some brands that survived the bleak times of the recession could face an even bleaker future unless they mend their ways in a hurry. But is there evidence that people’s values really are changing?
In a MediaPost article titled “Meeting Consumers’ Emerging Values,” Claire Ratushny suggests that a new trend of “pre-thinking recycling” is taking hold. According to Claire:
People are paring down and simplifying their lives. Consumers are increasingly selective about the products they purchase. “Excess” is causing revulsion, prompting consumers to purchase fewer products and more in bulk; then to repurpose as much as they can. Even trendsetters are reorienting their lifestyles to eliminate unnecessary waste. Good news for the environment and overflowing landfills.
Good news indeed, and some would argue it is long overdue. Claire’s viewpoint is confirmed by consumer research. According to the 2008 Going Green study by Yankelovich, 62 percent of Americans agree that “People today consume far more of everything than they really need,” up from 49 percent in 2007. If this trend continues, and consumers really do start to make deliberate choices between brands based on the environmental impact of production and consumption, it could have dramatic consequences for many brands.
But for me, the key question is, regardless of what people say they believe, will a significant proportion of consumers really be willing to reduce, recycle, and reuse? Though I do believe that attitudes are changing, I have trouble believing that we are going to see an overnight shift in purchasing behavior. Besides, even if they wanted to, concerned consumers can’t effect much change on their own. Consumers want and need help from businesses. Yankelovich again provides an interesting data point. The 2009 MONITOR study finds that 71 percent of Americans agree that “companies should make it easier for me to do the right thing, like being environmentally friendly, eating right, etc.” The proportion is unchanged from 2008.
Most people, it seems, are not willing to take responsibility for their own consumption. They want someone else to do it for them. So perhaps there is not such an immediate threat to brands by the so-called change in consumer values—but there may be an opportunity. If people believe that they are consuming too much of the wrong things, but aren’t willing to expend the effort to remedy the situation, brands may be able to capitalize on this by doing the right thing on consumers’ behalf. It might cost money, but the potential upside could well be big enough to offset any loss of short-term revenues. After all, some of the best known and most valuable brands owe their current status to correctly addressing acute contradictions in society. (Click here to read my post on iconic brands.)
P&G is placing company values and a sense of purpose at the heart of their new stategy, as described in this article. I wonder how far this change will really go. Will the new strategy simply result in more effective products and marketing, or will it go further than that to help the planet at large?
I guess we will have to wait and see how P&G’s initiative plays out. But what do you think? Can companies benefit from helping their customers do the right thing?
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October 5th, 2009 at 5:28 am
Nigel
how this plays out in a lasting transformational sence will depend on the success or failure of the various cap and trade programs being proposed.
Inside the marketing box we can talk about innovation diffusion and green consumerism - but those are small isolated ripples compared to the wave of change that comes about when businesses are asked to pay for their use of previously free economic goods. Once that happens, the self preservation instinct of businesses will have them seeking out ways of becoming efficient/competitive under the new paramaters giving rise to efficient (greener) practices. Some of it will make its way through to the consumer in substantial ‘green’ products but most of the changes will be unnoticeable.
If for some reason businesses are able to push off cap and trade (and its ilk) then this will be nothing more than a jaded marketing exercise.
October 6th, 2009 at 8:54 am
Hi Nigel,
Thank you for citing my recent article in Media Post. I was a marketer in the natural products industry for years. Not too long ago, the industry and its concepts were hardly mainstream. Preservation, stewardship of our natural resources, organic farming and the natural goodness of whole (unrefined) foods appealed to a small percentage of the population. As the consumer at large became educated about these principles, they have caught fire and become quite mainstream. This is slowly but surely changing attitudes. Marketing research bears this out. In my own interactions with people, I am struck by the level of smarter purchasing, recycling and the repurposing. Many in our suburban CT area are gardening again and raising produce without chemical fertilizers and pesticides. Awareness is the first step in changing behaviors, isn’t it?
Add to this our current economy in which people are rethinking their purchasing patterns. Economic constraints are currently dictating that consumers buy fewer products, buy more products in bulk and not purchase more than they truly need. Will this last? One of the largest demographic groups, the baby boomer generation, has lost so much of its net worth due to the crash on Wall Street, retirement is being put off and extraneous purchases are being cut. I believe purchasing patterns will be affected by this well past the current recession, also. Local, state and Federal tax increases looming on the horizon will also have a dramatic impact on discretionary income for every group, including younger workers, forcing people to continue to do more with less.
All of these factors combined are coming together as people reassess what is truly important to them. It is no coincidence that retailers and consumer brands continue to struggle. I just read that retailers are cutting down on inventories as well as the number of SKUs they offer; cutting assortments will force manufacturers to cut back. The impact on brands will be dramatic unless they realign themselves with the new realities in the marketplace. The culture of excess is over for now and into the forseeable future.
October 6th, 2009 at 9:54 am
Thanks Miro and Claire, I will address your comments later. Meanwhile here is a comment sent in by an e-mail contributor:
“Personally, I will believe the phenomenon to to be real and values to have shifted when young couples with children either stay or move into my neighborhood of “modest” 2400 sq.ft homes (4 br, 2.5 baths) that were large when they were built in the late 60s, but now are seen as “too small to raise a family in.” At least, that’s what my neighbors have all said as they have their second child and move out to the exurbs for 4000 sq.ft. houses. The recession has slowed this movement, but I think it will be back with a vengeance once the housing market starts moving again.”
October 6th, 2009 at 5:18 pm
Thanks again for the comments.
Miro, one of the things that I plan to address is whether government or big business is more likely to make a difference in future. As you suggest legislation can have an impact but the timeframe from idea to implementation is likely to be lengthy. Big business actually owns the problem and has the capabilities to make a difference given the right incentive. Consumer demand, the ability to gain competitive advantage and mitigation of risk may all prove to be compelling reasons for businesses to clean up their act.
Claire, welcome to the blog and thanks for the comment. Believe me I would love it if the mass-market in the U.S. and elsewhere did embrace sustainability and made their purchase decisions on that basis. However, the evidence suggests that those willing to act on their beliefs are a small minority. Yankelovich’s 2009 Monitor data does suggest that people are more likely to believe that it is important to buy organic and locally grown food and environmentally friendly products than they were three years ago. However, only a minority are willing to pay at least a little more for these benefits. That minority is heavily skewed to upper income households (just the sort of folks who live in the suburban CT area). Particularly given the current economic conditions I fear that the majority of people will forgoe sustainability in favor of lower prices. More on this in a future post.