Retailers and consumers are not on the same page when it comes to sustainable shopping. This is the overall claim from our recent study with the Baker Retailing Center at the University of Pennsylvania's Wharton School.
Consumers and top retail executives were polled concurrently to examine views and preferences for shopping formats, sustainable products, and the factors influencing sustainable purchase decisions. The results from this study revealed that businesses can no longer ignore their sustainability initiatives.
There is a substantial divide between top retail leaders and customers when it comes to sustainability.
Retailers and customers are at odds on a variety of issues, ranging from consumers' willingness to pay extra for eco-friendly products to their resale preferences.
Consumer-driven sustainability initiatives are all the rage. It has enabled a few well-known brands to take the lead in solving this divide and demonstrate to other retailers that they can help create a greener future, both environmentally and financially. Retailers struggling to close this gap can achieve proven, actionable results with the implementation of First Insight’s Next-Gen XM platform powered by retail predictive analytics.
Our research has concluded that 58% of consumers within all generations are now willing to spend more on sustainable products.
The preference of Generation X consumers for sustainable companies has grown by approximately 25%, and their willingness to pay higher for sustainable commodities increased by 42%. In comparison to just over 34% two years ago, 90% of Generation X customers stated they would be prepared to spend an additional 10% or more for sustainable items. Generation Z's role in sustainability is strengthening as its members’ transition from youth to adulthood, guiding all to take a sustainable approach.
58% of consumers will pay up to 10% more for sustainable products.
Top retailing executives appear to have little awareness of consumer preferences when it comes to sustainable products.
According to one clear data point from our recent study, two-thirds of customers are prepared to pay more for sustainable items, but two-thirds of retailers feel consumers are not willing to pay more. This highlights that there is a strong disconnect present. First Insight’s sustainability initiatives can close this disconnect by helping retailers reduce waste through digital product testing and predictive analytics by eliminating poor performers before retailers invest. Having the right data helps businesses achieve a 10% price increase, an increase in sales by 6%, a reduction of inventory by 40%, and the ability to eliminate 10-30% of low-value products.
Check out these Customer Success Stories to learn more.
Closing the gap with First Insight.
As consumers become more environmentally sensitive, retailers must find methods to match their expectations while also strengthening brand positioning. By working with First Insight, businesses will be able to accurately gauge the demands in the market, and position themselves in a way that successfully meets consumer needs and expectations. Through the implementation of First Insight’s Next-Gen XM platform, businesses can operate more sustainably and drive profitability through better listening.
Request a demo today to learn more about how First Insight can help you reach your ESG goals.