New research from Wharton Baker Retailing Center, First Insights finds spending elasticity.
Pittsburgh – Retail executives’ perceptions about consumers and sustainability are off the mark, according to a new report from the Baker Retailing Center at the Wharton School of the University of Pennsylvania.
The study, conducted in partnership with First Insight, found a misalignment between what’s important to consumers and what retailers believe they value.
Among the key takeaways:
- While 68% of consumers say that they would pay more for sustainable products, 66% of retailers believe that consumers would not.
- Almost three-quarters of consumers (72%) said that sustainability is a very or somewhat important a purchase consideration, with only 51% of retailers believing the same.
- Nearly 75% of consumers value product sustainability over brand name. But 94% of retail execs said brand name is more important to consumers than sustainability.
- The majority of consumers (76%) agreed that retailers should be more sustainable; 98% of retailers said consumers hold those expectations.
- Retailers disproportionately believe consumers are shopping sustainable products because they want to be “good citizens,” a behavior characterized as social signaling. In fact, consumers are shopping sustainable products because they want to help the environment.
- Among consumers, the most important attributes for sustainable products include improving the environment (29%), reducing production waste (23%) and reducing carbon footprint (22%).
“This report clearly demonstrates that retailers are leaving money on the table,” said Greg petro, CEO of First Insight. “Consumers want more than performative measures from retailers and brands when it comes to ESG priorities, which will only become more important as Gen Z grows in influence.”