RILA Conference

Consumers

Consumers increasingly want to be engaged in a discussion about how the products they purchase affect themselves, their families, and the planet. They are curious about the material makeup of products, how these products are manufactured, where the ingredients originate, and who is affected throughout the supply chain. In turn, retailers are using the tools available to them—both old and new—to educate and engage consumers about the impacts of the products they buy.

ENGAGING CONSUMERS IN THE JOURNEY

Retailers can educate consumers about product impacts through traditional channels like marketing catalogs, in-store displays, product labels, and advertisements—wherever there are opportunities to highlight environmental and social product information. But the industry recognizes that, from the consumer’s perspective, a barrage of green messages and the proliferation of “green” seals and certifications can be confusing and may appear inauthentic.

In order to rise above the mass of messages, some retailers are working to educate consumers about healthy and sustainable choices without overwhelming them with data. Whole Foods’ Premium Body Care symbol allows customers to identify personal care products that meet meticulous research standards.

Exposing consumers to products that enable eco-friendly lifestyles and healthier choices are other ways that retailers can involve consumers in sustainability. More and more consumers are demanding products that reduce their energy and water usage, such as ENERGY STAR and WaterSense-certified appliances, as well as nontoxic household products. The Home Depot’s Eco Options products have resulted in $740 million in utility bill savings and cut more than 1.8 billion gallons of water consumption in 2009. These products and product lines can build brand loyalty while providing more eco-friendly and healthy lifestyles.

Recognizing the green consumerism trend, retailers are introducing private label brand lines that meet consumers’ growing interest in sustainable products. Private brands like CVS’s Earth Essentials, Petco’s Planet Petco, and Giant Eagle’s Nature’s Basket are easy to recognize on retail shelves and are becoming more popular.

Product and supply chain transparency is another important approach to authentically communicate to consumers. Through the web, social media, and smartphone applications, consumers can engage with information about sustainable products at the level they’re comfortable with. Walmart’s Love, Earth jewelry line, for example, is a pilot project that allows consumers to trace their purchases from “mine to market,” connecting them to the people and places that mine and process their jewelry.

The web and social media also enable healthy dialogue between consumers and retailers, allowing consumers to influence company operations and product offerings. Best Buy has an entire website dedicated to soliciting consumer (and employee) feedback—its Idea Exchange. Customers can provide feedback on a range of issues, including the sustainability performance of Best Buy’s operations and product assortment.

Though the importance of sustainability messaging continues to grow, actions still speak louder than words. To fully engage consumers, retailers must do more than simply communicate about sustainability; they need to help customers see and feel it through the shopping experience. Approaches include:

Retail spaces with educational signage. IKEA uses stand-alone signs as well as banners and posters to educate consumers about the production of materials used in its products, such as sustainable cotton.
On-site recycling stations. Depending on the retailer, recycling stations can accept anything from paper and plastic bags to old batteries and cell phones. The Home Depot collected 667,000 pounds of rechargeable batteries from customers in 2009 as part of their Rechargeable Battery Recycling Corporation program.
Buy-back programs or trade-in options help consumers dispose of unwanted products and also attract customers back to the store.

A LOOK INTO THE FUTURE

Retailers will take an authentic and unobtrusive 360-degree approach to engage customers via marketing and promotions, as well as through the in-store shopping experience. This approach will include consumer facing messages, educational materials and signage, in-store sustainability efforts, recycling and buy-back programs, and more, all of which enhance the shopping experience while educating consumers about the importance of sustainability.

With regard to product marketing, creating a common language to ease consumer understanding will be a top priority for the industry. Retailers recognize that phrases such as “green,” “sustainable,” “nontoxic,” and “recyclable” have different meanings for different people. While some “conscious” consumers perform significant research before purchasing, others consumers have only a passing interest in or no interest at all in this information. A consistent language will help foster interest, minimize uncertainty, and maintain trust between retailers and their customers. The soon-to-be-updated FTC Green Guidelines will offer significant clarity on these terms, and retailers are already aligning their messaging to the draft guidelines. In addition, third-party verification and certifications like the Forest Stewardship Council, Marine Stewardship Council, and ENERGY STAR, if well-known and trusted, will further clarify the mix of product messages. However, given the current diversity in consumer messages around sustainability, the key challenge for retail will be to integrate sustainability into the customer experience in an understandable and authentic way.

Through collaborative efforts, the next five to ten years will bring consistent and easy-to-understand product sustainability information to consumers. This information will be available in many forms, including product labels, smartphone applications, websites, in-store displays, and more. This information will empower consumers to make more informed choices that are consistent with their needs and values. While price will always be a major factor in consumers’ choices, other factors—like where the product came from, how it was made, and how it impacts the planet—will increasingly influence their buying decisions.

Do you have questions or comments? We welcome your feedback.

STUDY: HOW IKEA EDUCATES CONSUMERS ABOUT SUSTAINABLE CHOICES

IKEA infuses educational and engagement opportunities into the full consumer shopping experience. Beginning in customers’ homes, IKEA promotes its sustainability activities via its website, Facebook, and other social media. Sustainability is prominently featured on IKEA’s home page with a rotating message box that includes information about planting trees, inefficient lightbulb phaseouts, and more. The site also suggests alternative modes of transportation to stores when those options are available.

While shopping at a store, customers learn about IKEA’s efforts through a variety of touch points:

Wall signs highlight the store’s eco-friendly attributes and the company’s sustainability programs.
Signs hanging over products educate customers about sustainable product choices.
Product labels, where possible, describe a sustainable product’s attributes by tracing materials to their origins, listing recycled contents, etc.
Some room settings are designed with sustainability in mind, highlighting sustainable options.
Sales associates are trained to help consumers make eco-conscious choices.

Beyond messaging, customers are actively engaged in the sustainable shopping experience.

IKEA helps customers safely dispose of their compact fluorescent lightbulbs with in-store recycling. Their plastic bag elimination program proved to be a huge success; in 2007, IKEA notified customers about the upcoming ban and eliminated 92 percent of their bags. A year later they announced that they would only provide reusable blue bags. As expected, there was some resistance, but IKEA reports that this effort proved to be a conversation starter between the company, its employees, and the customers. Finally, customers have the option to plant a tree as they use a self-service checkout.