Retail’s Sustainable Shopper: Gen Z’s Sustainability Pledge, Waste Reduction and The New Values Shopper

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Sustainability has been a retail trend for years, but COVID-19 truly accelerated and shaped the sustainability revolution. As a society we learned to do less, spend less, and waste less. As more Gen Z’ers reach adulthood, they are leading the pack towards sustainability in retail and saving the planet. The retail industry is courting this young generation that commands $143 billion in buying power, which is almost 40 percent of all consumer shopping.

According to our First Insight study, The State of Consumer Spending: Gen Z Shoppers Demand Sustainable Retail, the vast majority of Generation Z shoppers prefer to buy sustainable brands, and they are more willing than other generations to spend 10 percent more for sustainable products. The report also found that Generation Z is most likely to make purchase decisions based on values and principles (personal, social and environmental).

Social responsibility and authenticity are high on the priority list for Generation Z. According to a survey by DoSomething, 75 percent of Gen Z respondents want to see brands ensuring employee and consumer safety. The survey found that “if [brands] are not authentic, Gen Z will be the first to raise a red flag.”

It’s safe to say that every player in the retail industry has jumped on the sustainability bandwagon. But can everyone agree on what sustainability actually means? A 2020 survey of 2,000 U.S. and UK individuals by CGS found that half or more rated sustainability as an important factor in their purchase decisions and they are willing to pay more for sustainable options. But when asked to define sustainability, one in four Americans said it was waste reduction and eco-friendliness, while another 22 percent defined it as ethical practices.

Do sustainable retail companies and products actually exist? The retail industry is known to be environmentally unfriendly, with few industries producing as much cardboard waste as the retail sector. Five billion pounds of returned goods end up in U.S. landfills each year and between 25-30 percent of the materials picked up by a recycling truck are too contaminated to go anywhere but a landfill or incinerator. The real sustainability goal within retail is to generate less waste at every stage of the design, production, transportation, and sales process. Retailers and brands need to be truly sustainable.

But the truth is, it’s about more than just the future of sustainability in retail. A new class of customer is emerging called the “conscious consumer.” Consumers want brands that align with their social values. Jill Standish, Head of Accenture’s Global Retail Industry Group stated that “people’s values are increasingly becoming infused in their shopping habits. This calls for retailers to be authentic and pay attention to what each community they serve really cares about.”

A recent IBM study of over 14,000 consumers in nine countries found that many people “are increasingly willing to change how they shop, travel, choose an employer,” taking sustainability factors into account. IBM said 55 percent of consumers said sustainability is very or extremely important to them when choosing a brand, 22 percent higher than consumers surveyed pre-COVID-19.

Understanding the value that consumers place on attributes is key. Technology and solutions like First Insight’s Digital Line Review capabilities allow retailers and brands to choose products with confidence by understanding what your customers will buy and what they will pay – in a sustainable way - even before designs are finalized.

The new conscious consumer is guided by a set of core values. Wouldn’t it make more sense to call them “values shoppers?” This highlights the critical need for customer research to better understand this new class of shoppers and encourages retailers and brands to provide winning products and services that consumers truly value.

retail  voice of the customer  value  Gen Z  Generation Z  sustainability  reduce waste  values shopper