Sustainability. What does it mean and how important is it to consumers and businesses? Sustainability is about living in a way that meets our needs without negatively affecting future generations’ ability to do likewise. Simply, it means reducing our impact on the environment; for businesses, it can mean an opportunity to grow sales and build the brand value in the community.
During the last half-century, demand for sustainable, or “green,” products and services has risen. A study by communications professional and writer Heidi Tolliver-Nigro found that, in 2009, the market for green products was estimated at $230 billion and projected to grow to $845 billion within five years.
Still, challenges must be overcome. People may want to make sustainable purchases, but multiple researchers have also found that a lack of knowledge about green products and their benefits to the environment, coupled with the (often false) perception that those products are more expensive and lower in quality, can act as barriers.
Despite these hurdles, research conducted at Yale University and George Mason University showed that 74% of Americans give at least some thought to the environmental impacts of a product they purchase, 20% said they refused to purchase products from companies that oppose taking steps to be more environmentally friendly, and 36% stated that they shared information about a company’s irresponsible environmental behaviors with others.
Interestingly, a 2015 RetailMeNot study also found that while 81% of American consumers believe green products are more expensive than alternatives, 89% stated that they would still be willing to purchase at least one product that helps the environment.
Why are consumers willing to pay more for green products? One Maryland business owner has been busy working to find an answer, and she seems to have come across a recurring theme: Making a connection.
Joji Barsa, the owner of Parcel and Office Solutions, a shipping store in Odenton — and the West Anne Arundel County Chamber of Commerce’s (WCC) 2016 Woman-Owned Business of the Year award recipients — recently participated in a Miami University graduate student’s study to explore what motivates consumers to purchase green products. The study analyzed whether people are more influenced by personal connections or by price.
While the U.S. Census Bureau’s 2014 report showed that the median household income in Anne Arundel County is 48.1% higher than the national median ($87,430 compared to $53,482), the overall cost of living also remains 23.9% higher. It would seem reasonable to assume that price is a leading factor in the purchasing behavior of Anne Arundel County consumers. However, the study found that this may not always be the case.
During the six-week study, sales of equal-sized bags of regular packing peanuts (made of Polystyrene/Styrofoam) and biodegradable packing peanuts made from 100% cornstarch were tracked. Different sales methods focusing on connections and price were used each week.
Methods used to connect with consumers were based on several “green” marketing strategies created by the American Marketing Association to help consumers understand that their purchases make a difference. These included sales representatives’ direct interaction (discussing the biodegradable option with consumers) and connection signage (featuring photos of Odenton landmarks and a resident, as well as a call to action asking consumers to buy green to protect the community).
The original price of both products was the same, so the connection methods were each tested against a 10% off sale offered on the regular packing peanuts. For the last week of the study, a 10% off sale was offered on both the regular and biodegradable packing peanuts.
When weekly and total sales were compared at the end of the study, results showed that Barsa had sold more bags of biodegradable packing peanuts than regular packing peanuts (17 bags to five bags), even when the price was higher.
“I was pleasantly surprised that many customers not only reacted positively to the connection methods, but even initiated conversations with me about green products,” said Barsa. “These connections had an impact on my customers as well as me, and I am exploring new ways to be environmentally friendly, from using natural soap products at my store to ordering other biodegradable shipping materials.”
Additionally, a survey distributed to the 1,200 county residents who subscribed to the WCC’s enewsletter included questions asking respondents how much they knew about environmental issues, how often they purchased green products and how they would rank factors that influenced their purchasing decisions.
A preliminary analysis of 100 returned surveys showed that, on average, participants ranked each of the factors involving a “connection” (children’s influence, a desire to protect the environment, personal recommendations and product marketing) more highly than they ranked price as a factor in making a purchase. These results remained true for both men and women.
“Relationships drive business decisions. People like to do business with people they know and trust, and that’s the environment a chamber of commerce creates. This study reinforces that message and applies it to sustainability,” said Claire Louder, president and CEO of the WCC.
“Every action, no matter how small, contributes to the betterment of our community and the environment. As business owners, we’re in the unique position of being able to engage our customers in helping to make a difference,” said Barsa.
Sustainability is a complex topic. However, by keeping in mind that consumers often make purchasing decisions based on emotional connections rather than price — even in a community where the cost of living is high — business owners have new opportunities to tailor efforts to increase sales, grow community pride and protect the environment.
That’s a win-win solution everyone can get behind.
Jennifer Fields is communications coordinator for the Association of Zoos and Aquariums. She completed this project as a part of her graduate work with Project Dragonfly at Miami University in Oxford, Ohio. She can be reached at [email protected].